Whitepaper: How culture makes a difference in digital transformation

Joris Merks-Benjaminsen / November 2018

Every day, we work with thousands of customers on their digital transformation journeys, helping organisations from all backgrounds achieve their goals. And for two years now, we’ve been learning from that experience to develop our Executive Digital Transformation Lab, a programme to help leaders develop their visions and turn them into action. We’ve been working hard to pinpoint the truly essential elements necessary for a successful digital transformation, which is why we can say with certainty that having a culture of innovation is not optional, it’s vital.

But because every organisation has its own unique culture, there can never be a one-size-fits-all solution. Each journey starts in a different place and takes its own path. So when we saw the work Temporall is doing to make organisational culture measurable, we recognised its value immediately. Measuring culture gives teams a map to guide them on their journey: a way to know where they are, where they’re going, and what they need to do to reach their destination.

That makes culture the new secret weapon organisations can use to align teams and implement change. This exciting new development is explored in a new paper The Strategic Secret: How culture makes the difference in digital transformation, and we caught up with Thomas Davies, founder and CEO at Temporall, and Elen Davies, the company’s Director of Programmes, to find out more.

Temporall inline

Why should people care about culture?

Elen Davies: Most companies today are trying to transform themselves into fully digital businesses, but less than a third of them succeed. A staggering 70% fail. And one of the biggest reasons for that is that if you're going to do any kind of change management initiative, you need to inspire people and take them on a journey from where they are now to where they need to be.

If you have a culture throughout your organisation in which people share a vision and are adaptive, flexible and willing to embrace change, that transition is easier. It’s still not easy, but it is achievable, because people are pushing in the same direction towards a common goal. Change is almost impossible without your people having the right mindset. How do you create that mindset? You do it through your organisational culture.

What’s the most common misunderstanding people have about culture?

ED: I often talk to senior business people and discover that they don't really know what organisational culture is. They tend to say things like “we’ve got great energy” or “we’re hard-working” or “we have a good culture around here, everyone says it’s a fun place to work.” Culture is such a serious subject, but there isn’t the serious-minded discussion around it that there needs to be. It's all a bit fluffy.

Thomas Davies: Exactly, although the word I hear most often about culture is “fuzzy.” It’s incredible. There are decades of great research on organisational culture – there’s all this evidence of how much it matters – and most people have yet to get to grips with it in a meaningful way. The other day, I asked 30 CEOs if any of them measured culture as part of their strategy, and they all said no. But that’s exactly what they should be doing. They need to make culture part of their core KPIs.

Academics have done great work investigating organisational culture since the 1980s. Now we’re trying to build on that to make culture accessible and understandable, stripping away the ambiguity and simplifying things. It’s about making the practical elements of what they’ve discovered really easy to understand and implement, in steps that anybody can follow.  

ED: People catch on immediately when we break down culture into our four-part framework of values, behaviours, processes and systems. What are the values of your organisation? How are those values expressed in the way you behave? And how are those behaviours made repeatable and systemic? You can really bring it down to basics.

So what does an effective culture look like?

TD: As a team, we started looking at the attributes shared between high-performing companies that are fit for the future. We found four key areas. An effective culture has to be highly adaptive. It has to generate change, rather than just absorbing it. It's emotionally intelligent, and it has a massive degree of external orientation. Organisations that perform well excel in all four of those categories.

ED: We came to this subject from a lot of personal experience, too. People on the Temporall advisory team have worked at places like Google, Facebook, Bain & Company, and Microsoft. We brought together the best bits from the cultures we'd experienced at companies we'd worked with or for, when we put together a gold standard. And we know that we don't have all the answers. We’re constantly amazed by clients coming to us with great ideas about new parameters that we then try to fit in.

What difference can it make to measure culture?

TD: Culture is a central part of company strategy, so executives need to engage with it. And for executives to engage with it, they need to see it measured. People think culture is about investing in a ping-pong table, but it’s not. It's about investing in a feedback loop. And where that gets really interesting is when you use information from the feedback loop to align culture towards meeting your strategic goals.

Mergers and acquisitions are a good example. You have two existing cultures, and you're trying to work out how to combine them. You need to know what the values are of each company, and you’re likely to try to take the very best from both. Which values are really important? Which are the most effective? Only when a company has figured out its existing values and decided which it wants to adopt can it begin to address how it wants people to behave. We can map out those values, so companies can assess what works and what doesn’t. There might be 50 options for what you can do, but which are the five or six best things you can do?

ED: Whether you’re a new startup or an established multinational bank, if you have values that you really, truly believe are going to drive your company forward and make it successful in the future, then those values need to be in behaviours that are seen in every single part of your organisation: the way that you manage people, the way that you recruit, the way you conduct yourselves, the way you make decisions. They need to be your guiding stars. How do you know this is happening if you don’t measure it?

So how do you measure culture effectively?

TD: Our Culture Workbench gives companies the tools to do that where it counts. Take recruitment, for example. If we want to have an organisational culture that includes the qualities of being agile, adaptive and curious, then those qualities need to be included in the hiring and the job description. Those values need to be part of that process, and that process needs to be embedded in a system, such as the recruiting technology used by HR. Our software measures all of that.

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