We discussed earlier WHY businesses should consider digital business transformation to remain relevant in an accelerated innovation environment. And WHAT businesses should do that bring customer centricity at the heart of its business agenda to grow. This is the 3rd, and last in the series, focusing on the key aspect — HOW businesses are re-wiring and transforming their organization that continually adapt for achieving everlasting success in an environment where quantum change is the norm.

Most businesses fail in achieving their digital business objective — primarily due to the lack of cultural transformation in the company. Ask anyone who has led a digital transformation and they will cite how the cultural transformation was their #1 miss that resulted in failed customer outcome. HOW a successful business operates in today’s digital environment is significantly different. It is table stake to cultivate a culture of the continuous mindset that embraces pace of change and thrives on ambiguity.

Successful businesses gain differentiating clock speed when they can instill cultural values — usually by focusing on the following:

Cultural Transformation starts at the top — Be the leader who role model core values particularly when things are not favorable

Living and breathing — Vision, Mission, and Values

Have you seen any business who doesn’t tout its Cultural Values around embracing change, innovate, take care of customers, growing people, etc.? But ask yourself — do people in your organization live and breathe Values that it so prominently advertise? How do leaders and people behave in your company when they are under duress or when it experiences a setback? Do most people in a business operate with Founder’s mindset and act like owners of the business? Do people embrace and thrive in tackling ambiguous initiatives? Do people speak up freely and contribute willingly generating new ideas? You will soon learn whether Values in a business are only worth a fancy wall poster — or a business living and breathing those Values.

Creating an environment where cultural value thrives should be the primary goal of its Leaders. It is probably the only everlasting differentiation a business can create as strategy, technology, product, business model, customer preference, etc. change over time. And cultural values are shaped by our everyday actions and behaviors of our people. A leader action has far reaching consequences as it creates a ripple effect that cut across the ranks. Hence leaders of an organization are expected to be deliberate through their daily actions and behaviors in shaping an organization culture. And focus on instilling organization core — its sense of purpose, its commitment to values and empowerment of people that scale trust — as an organization takes the cue from how leaders operate.

Generally, leaders do a good job when things are going great. However, the test of a leadership is how we react when things don’t go as expected. A leader behavior and action under duress get amplified that often result into unintended outcome shaping organizational behavior. Hence it is vital for a strong culture to take root where its leaders exhibit their best — role model values and behaviors — when things are at its worst. Those are the moments of truth when culture cultivate and people in an organization follow the suit — instead of a periodic discussion that happens at the time of training or annual ethics compliance assessment.

This is relatively easily accomplished when businesses are small and in the startup mode. However, over time as businesses grow — internal politics, power plays, structures, and traditional practices — make people in a business risk averse and resist the change slowing down the business agility. The good news here is that we have numerous successful transformation examples across our industries where even large, complex, and traditional businesses have accomplished a strong culture of business agility — that is driven from the top — delivering on strong economic performance and becoming high performing organization. #CultureTransformation

Software business is people business — focus on organization design and attract, retain talent that foster Agile values

Hire and coach people who adapt, embrace change, thrive when things are ambiguous, and have a grit to see things through

Repeatedly we have seen how a small team of motivated and talented individuals can disrupt an industry or a large business that has no lack of people and investment. Innovation and strong customer connected execution are no longer just driven from the top. This requires cultivating modern talent development practices by strengthening middle and front line management — that exemplify behaviors needed to attract, retain and coach top talent in the organization. Modern talent development practices that are based on effective communication, value-based decision making, establishing compelling goals and high expectations of conduct, performing regular (monthly) coaching and feedback creates an environment of transparency and trust in how a business deal with its most important asset — it’s people. Management function grows to regularly seek and engage people by becoming a player-coach who creates an environment where individuals and a team can be high performing. #PeopleBusiness

Small cross-functional teams having shared goals around customer outcomes

In the new operating model, functional silos of the past are gone. Today it is about building small cross-functional empowered teams that jointly tackle and have shared goals across customer journey maps. Successful businesses operate in a team of teams concept following Agile approaches as the new engagement model to scale. This has changed technology organizations such as IT that are now becoming integral to the other business functions — co-creating solution, delivering innovation and servicing customers. #AgileTeams

Promote adapting and the use of Best Practices over rigorous adopting of Common Practices

Co-authoring with Customers

In the new operating DNA — where the pace of technology innovation is fast — businesses work towards creating conditions and culture to be in the ready state of being continuously adapting and proactively driving change to meet customer/business evolving need. High performing businesses consistently seek new ways to reorient their internal processes and business practices where customers become an integral part of co-creating solutions. Customers feedback are now included across every step of the solution delivery — from conceptualizing ideas to developing solutions to delivering and maintaining solutions — that delight end user use and become a promoter of the business. #CustomerConnectedInnovation

Grow a culture of Business Agility that allows business to sense and respond to unmet need of customers quickly

Over the last decade, businesses have embraced improving Operational Agility by adopting Lean/Agile/DevOps/DesignThinking based practices. These approaches are based on an objective/measured approach to execution that empower teams and develop and deliver solutions at customer speed. These processes are no longer nice-to-have operational approaches and have gained mainstream adoption. #OperationalAgility

However, many businesses though have yet to grow their Strategic Agility that allows them to sense changes in the market proactively and arrive at a business game plan necessary to address unmet need, allocate budgets priorities rapidly and dynamically manage their portfolio for maximum opportunity. Most traditional businesses still rely on lengthy upfront planning and traditional budgeting cycles that are full of various gates, approvals, and hand-offs slowing down the business ability to adapt quickly. Executive level leadership at successful businesses commit themselves to confront and tackle existing largely top-down, political, risk averse, the wait-and-see attitude around business strategy, portfolio management, and budget allocation that enable them to achieve strategic agility in their business. #BusinessAgility

Foster an environment of experimentation and continuous improvement

We all have heard the adage that perfect is the enemy of good enough. However great teams figure out how something good enough can become perfect when operating in a continuous improvement environment. Quick cycles of experimentation based on sufficient information at hand, learning and adjusting from the rapid cycles of customer feedback, and repeating is the new mantra when operating in fast pace environment. High performing businesses today have made the culture of continuous improvement — across Product, Process, and People — as part of the core DNA of the business. #ContinuousImprovement

Essential point: We are amid what is touted as the fourth industrial revolution where technology has blurred the distinction between Physical and Digital. Quantum change is the new norm — and pace, scale, and economics around innovation just keep getting faster. So, if you are not a digital-born business that has new cultural and operational DNA to start with — leaders at traditional businesses need to make cultural transformation front and center as it undergoes its transformation journey.

Author: Alok Tyagi

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