Digitalization is changing traditional organizations in many ways, putting new demands on individuals and teams. People are working at an ever-increasing pace and must accept that today’s tasks and requirements are constantly evolving. It is clear to everyone that the business environment is becoming hyper-connected and many companies are facing increased competition from not just long-standing rivals but also new and disruptive players. Inside the organization, younger employees joining the workforce seem very different to prior generations – these newcomers have distinctive aspirations, needs, and dispositions.
Together, these changes are deeply significant and they necessitate a new type of organizational culture for the digital age.
This articles first explain the five most important requirements digitalization poses on the organization. Then I will outline how to foster an organizational culture that caters to these requirements.
5 Requirements Digitalization Defines for the Organizational Culture
1 | Fast pace requires agility
Digital technologies enable rapid processing and communication. A payroll administration task that would take several manual hours, for example, can now be undertaken in a few minutes using a robotic process automation (RPA) system. To maximize value from the fast pace of digitalization, companies must ensure organizational agility – the ability to respond effectively to technological changes by more rapidly altering the internal status quo of processes, employee roles, and much more.
2 | Hyper-connected business environment requires collaboration
People-people, machine-machine, and people-machine communication barriers are fading in the digital age. With the Internet of Things (IoT), for example, personnel can receive maintenance alerts directly from devices. An organizational culture that is open to collaboration not just between people but also between and with machines is crucial to corporate progress, breaking down information silos and overcoming mental blocks.
3 | Increased competition requires customer centricity
Digitalization unlocks potential for disruptive business models, and traditional companies are facing increased competition from current rivals and new market entrants. In these conditions, organizations that have a strong customer focus are likely to survive and thrive because they are most likely to keep up to date with market trends and secure their position as the preferred provider in their target market.
5 | Constant evolution requires drive
There is no time for complacency as technologies rapidly evolve in the digital age. Companies need to keep up with every new development – for example, today’s logistics network optimization technologies rely on data, analytics, and human judgment, but tomorrow’s technologies, especially artificial intelligence (AI), could render human decision making redundant. The organization must be driven to deal effectively with constant change.
BUILDING A BETTER ORGANIZATIONAL CULTURE
To build a better organizational culture for the digital age requires companies to address both visible cultural elements (language, dress code, etc.) and invisible cultural elements (perceptions, behavioral norms, etc.). Only then can an effective cultural shift be achieved.
Companies can start small and grow from there. This matches our own experience of encouraging a cultural and mindset change – all that may be needed to spark a shift is something as simple as a reduction in approval requirements. This was one of the suggestions received during the Deutsche Post DHL inaugural ‘Start-up Lab’, an initiative to encourage entrepreneurial spirit which is very well supported by employees across the entire organization.
Ideally every individual in the organization should take responsibility for cultivating desired behaviors. The most important requirement to build a better organizational culture is the “skill to upskill” – in other words, the ability to proactively learn and adapt. This is fundamental to technical and non-technical skill acquisition because of the rapid pace of evolution in the digital age.
It is also crucial for the company’s leaders to champion the new organizational culture, becoming role models for others to follow. By recognizing the value of developing appropriate attributes themselves, these leaders can better facilitate and guide employees and teams throughout their organizations. Once everyone is on board, the required cultural shift can be achieved, assuring success in the digital age.