Does your company have a digital culture?

group_of_peopleMuch of the discussion about being a digital business centres on technology. In Boards need to get up to speed with digital I talked about the need for executives to understand what technology can do; what customers want and expect from their digital interactions with organisations; how employees and customers are using technology and how IT is being used by their competitors and by companies in other industries. Board understanding of IT is an important first step but there is a lot more to being a digital business than technology. Organisations also need to have the right type of culture to be a successful digital business.

Any new system, tool or process, no matter how well designed, will be undermined if the organisation has a culture that is not aligned with the initiative that is driving the change. For example, a business that implements new tools and processes to provide customer service via social media will experience problems if it does not have a customer-centric culture. Customers that use Twitter to contact a company do so because they want and expect a quick response in keeping with the immediacy of the platform. If the organisation does not understand or see the need for this immediacy it could damage its relationship with that customer and, because the contact is being played out in public, it could also damage its brand and reputation. All it takes is one person or department to fail to respond quickly to a request for information from the customer service team to create a delay, which in turn, could quickly escalate into a public failure.

Crowdsourcing is a term used to describe a process of obtaining services, ideas, content or funding from a ‘crowd’ and is usually done online. Crowdsourcing platforms such as Kickstarter have been used successfully by entrepreneurs, inventors and start-ups to raise funding for new products and services that would otherwise have proved difficult to ‘sell’ to the more traditional providers of finance.

A number of companies are now using the crowdsourcing principle internally to encourage collaboration, facilitate innovation and to increase levels of employee engagement. For example, IBM have trialled crowdsourcing to publicise and fund ideas for new projects. Participants in the trials are each allocated $100 that they can ‘invest’ in projects proposed by other members of the organisation via a dedicated website. At the end of the funding round those projects that received the requested level of funding were allowed to proceed. Any funds not pledged to a project or allocated to a project that did not achieve its funding target are returned to the relevant Vice President’s budget. The VP still has to get the relevant approvals and go through the normal IBM purchasing processes, if required, to get the funded projects up and running. The approach doesn’t therefore bypass the standard company procurement and approval processes but it does require the VP to actively sponsor and support the funded projects. IBM have run successful trials across groups of 500 up to 5,500.

IT company HCL is successfully using crowdsourcing to open up its annual business planning process to all employees. In the new process, the company’s 300 managers publish their business plans and a supporting commentary online so that its 8,000 employees can review, comment and provide feedback. And they do – in large numbers. Not only does this approach generate a lot of feedback it also brings transparency to what was previously a restricted and closed process. Communicating the final plans and getting employee support for them is no doubt made a lot easier for HCL executives as a result. A spin-off benefit has also been a significant improvement in the quality of the plans submitted by managers knowing that they would be open to scrutiny by the whole company.

In both of these examples the introduction of crowdsourcing would not have even happened without senior management’s willingness to open up previously closed processes. Digital initiatives such as these need a culture of trust and openness. The Board need to be open to changing their own ways of working and engaging, and they need to trust the organisation’s people. This needs to be reciprocated by the employees with appropriate and responsible contributions. Being open and involving a much wider group of people in key processes requires managers to ‘let-go’; they cannot control the outcomes but they do need to act on the results. And this may make them feel very uncomfortable.

Crowdsourcing may not be appropriate for every company but if your organisation could not even consider the openness, engagement and trust that these types of initiative require to be successful then it is very likely that you do not have the right type of culture to be a successful digital business. Technology provides the tools you need for the digital age but having the right culture is essential to becoming a digital business.

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