A digital corporate culture creates higher profits and more satisfied employees, according to the study "Culture First! Learning from the digital change pioneers" by Capgemini Consulting, which focuses on the transformation to digital business.
Technology "is a necessary prerequisite" for this process, but "not enough" on its own. To successfully drive digitization forward, say the study's authors, digital strategy must be strongly rooted in the corporate culture and rely on effective approaches "to eliminate employees' fears."
Implementing this possibly major goal clearly isn't always successful at first attempt. Often, the study reveals, existing conditions are "vehemently defended" even though 72 percent of German survey participants (internationally: 62 percent) view the established corporate culture as "one of the biggest barriers on the path to a digital organization."
This means, the study's authors conclude, that if digitization is to result in measurable added value for the company, then technology only creates the necessary preconditions. The corporate culture also needs to be changed so that management skills as well as employee attitudes and conduct are also dedicated to digital.
Not every company is successful in this regard, the qualitative section of the study shows. A large proportion of the more progressive companies, namely 80 percent, assign digitization and the digital culture to executive management, whereas 90 percent of the others leave these tasks to technical departments.
However, a top-down approach where executive management takes the lead brings better results. “Many companies still don't accord enough importance to the human factor. Firms that take this factor into account just as strongly as the technology itself are particularly successful on the path to a digital company. They adapt their management style and create a culture of trust that accepts mistakes and involves employees in change processes at an early stage,” says Claudia Crummenerl, Head of Executive Leadership and Change at Capgemini.
Insufficient communication with employees and inadequate attention to their fears slows down change and creates uncertainty. "Only when the advantages of digitization are presented believably to all employees, is fear of change eliminated and replaced with the view that the innovations will help everyone," Crummenerl adds.
The study also indicates that digitally advanced companies invest in their teams and make resources available for the necessary coaching and training, as well as knowledge management.
Businesses also promote their digital character by hiring more talents with a strong digital understanding. New approaches that make progress measurable also help to demonstrate success and provide motivation for next steps.
The perhaps good news for lagging companies: Not all digital competencies can and must be present in the firm already, the study's authors say. Around a third of large companies in Germany work with startups.
For small firms as well, acquisitions or a network could be ways to achieve innovations faster and gain key experiences with a digital culture, according to the study. Newly founded digital business units that bundle some or all of the digital business also help smooth the way to the culture change.
One in every two companies, or 50 percent, with a well-developed digital culture has created such a business unit and adapted their processes. In contrast, none of the companies surveyed with a less developed digital culture had created a digital business unit.
In principle, the right organizational structure can help in trying out new approaches. When everything eventually goes as planned, the learnings can then be rolled out to the organization as a whole, suggest the authors.