Mastering the art of digital transformation.
CHALLENGE 4: CULTURAL RESISTANCE
Following our last insight on mastering the art of digital transformation (challenge 3: lack of expertise), we continue our series with challenge 4: cultural resistance.
Whilst digital transformation requires deep technological thinking and a structured approach towards such, focusing too much on technology can become a dangerous trap. As with most transformational approaches, digital transformation at the end always depends on those who deal with it daily – the employees. Untransparent and un-collaborative procedures can lead to fear and resistance, slowing down the digital shift and making digital transformation more expensive while reducing its overall effects.
In this article we point out specific solutions to this challenge.
25.03.2024 - 5 min. reading time
AUTHOR
Dr. Lorenz Lucaj
CHALLENGE 4: CULTURAL RESISTANCE
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Cultural resistance in the context of digital transformation refers to the pushback, reluctance, or opposition that arises within an organization's workforce against the changes brought about by the adoption of new digital technologies. This resistance is not about the digital tools themselves but stems from the impact these tools have on established norms, routines, roles, and the overall culture of the organization. People are used to certain procedures, tools, standards.
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SOLUTION: DRIVE CHANGE AND COMMUNICATION MEASURES COMPANY-WIDE
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At the end it doesn’t matter if something changes for the better or for the worse, it just matters that it’s different. In that sense, digital transformation does not fundamentally differ from any other cultural change. The difference compared to other transformational changes is the speed and the broad area of impact at which it occurs. This makes it even more important to be prepared for significant changes and related resistance within the organization. This applies to short-term measures to flatten the change curve as well as to mid- to long-term measures that push the organization to real beneficial cultural change.
It is important to note that change measures are not limited to communication measures in general, but consider a rather hard facts driven approach, considering also organizational and procedural change to embed the shift in mindset in daily routines and behaviors.
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IDENTIFY PAINS AND TOPICS OF RESISTANCE AND DEFINE ADEQUAT MEASURES​
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In most cases the digital transformation will be in full swing, either in a structured or in a very unstructured and simple way. Either way, employees are already faced with the impact it brings. In a first step it is important to understand what the main drivers of resistance are or could be.
Some examples: Many employees may fear change because it can lead to uncertainty about their roles, job security, and the need to acquire new skills. Also, organizations often have long-standing processes and systems that employees are familiar with. In many cases the issue is simply the lack of clear understanding of the benefits and strategic value of the digital transformation that leads to skepticism and resistance. And in very bad cases resistance can also come from leadership and management if they are not fully committed to the digital transformation.
Companies need to understand where the pain points are to solve them sustainably. This transparency can be reached by conducting specific employee surveys (or amending existing ones) as well as through management specific polls. Alternatively, or in addition to this, specific KPIs (e.g., adoption rates) can indicate the success of digitalization initiatives.
Once understood, adequate measures can be defined in both, short and mid-/long-term. These measures can range from precise communication measures all up to engagement sessions, specific management involvement as well as adaptations in compensation & benefits, process, and organizational redesign.
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ESTABLISH A CULTURAL CHANGE INITIATIVE AND FOSTER PEOPLE ENGAGEMENT
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Cultural change in companies and change (management) per se are usually quickly dismissed as less important factors and deprioritized accordingly. However, studies show that cultural resistance are amongst the most relevant reasons for digital transformation to fail. [1]
Thus, it is of utmost importance to set up relevant structures and establish an initiative that drives cultural change company wide. This can be done in a specific project setup with a dedicated group of people
The initiatives target is to establish measures in a structured approach, to lead and monitor those measures, ensure adequate behavioral change, and foster strong people engagement. The latter being one of the most important mechanisms for change as people who feel involved and engage are more likely to change. At the end digital cultural change can only succeed if the initiative also has the corresponding relevance and is in the spotlight of the digital transformation. In very large corporate structures digital cultural change might be steered within its own organizational setup and with very high attention across the organization.
CREATE A CULTURAL CHANGE ROADMAP AND EXECUTE ON YOUR CULTURAL JOURNEY
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One major success factor is to develop real hands-on solutions for the issues and resistance occurring. To make it as tangible and manageable as possible, corporates should establish an overarching change roadmap that pinpoints all relevant measures across a defined timeline and with dedicated resources in charge.
For corporates it is important to consider that cultural change takes time. While measures can be conducted very frequently and on short-term, their effect will come further down the road. So, executing on these measures stringently is key.
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REORGANIZE ACCORDING TO NEEDS​
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Next to communicational measures and people engagement, a further and major part of cultural change is organization and processes. Processes in general foster certain behavior per definition. Thus, corporates need to understand where processes and organizational structures have a negative impact on digital cultural mindset and where changes are needed (see also part 3 of our series (lack of expertise) where we point out the specific need for organizational change to ensure capabilities are met by existing and future workforce; this plays a crucial role also in cultural digital behavior). This applies not only to organizational and process-related change but also to compensation & benefits as well as to sanctioning mechanisms in place.
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LEAD BY EXAMPLE AND REWARD ADOPTION AND SUCCESS​
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Having true role models inspires to change. A digital culture cannot be claimed by management and lived by their employees only. Instead, management needs to take over and lead by example. This can be done not just by giving clear statements and guidance, but rather showing that people who lead are also people who use technology (e.g., certain tools and infrastructure). Management needs to be at the forefront of any initiative, implementation and tool utilization, always showing a hands-on mentality and a minimum set of technological skill.
Leading by example does not only apply to management. Role models can be everywhere and at any hierarchy level. Taking the lead and supporting the digital transformation can and should be rewarded in every company. Some examples on how to promote such behavior would be by setting up digital ambassadors who spread the word and support others, by introducing digitalization-rewards and other benefits (e.g., using gamification) or by simply encouraging people to drive innovation and try new things.
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SUMMARY
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In general resistance arises not from digital tools but their impact on organizational culture. Solutions involve identifying resistance points through surveys, establishing cultural change initiatives, developing a roadmap for tangible solutions, and reorganizing processes to support digital culture. Also, leadership plays a key role, with management expected to lead by example and reward digital adoption. In this article we underline that addressing cultural resistance is essential for the success of digital transformation, necessitating clear communication, structured change, and active engagement from all levels of the organization.
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Part 4 of 4 – Mastering the art of digital transformation: 4 challenges and the solution