What is digital culture?

At the beginning of this article, it is better to define culture. Among the various sources, the most important metaphor used for culture is “culture as glue”.
Organizational culture is a set of values ​​and rituals that bind and integrate the members of an organization like glue.
Leaders consider digital transformation as a fundamental change paradigm and believe that, like other transformations, digital transformation also requires a culture to support the dominant strategy of the organization while supporting the changes. However, culture has been identified as one of the barriers to digital transformation.
In a 2014 survey, Altimeter identified changing organizational culture as the most important challenge in digital transformation.
Culture is one of the most important sources of competition.
Without a solid foundation for culture and employee alignment with the digital vision, it will be difficult to do anything meaningful about digital transformation.

Chart comparing the level of trust in different industries in the years 2006-2016

As the trusted provider of tools for thousands of buildings and data centers, Hearing Electric leaders are changing the culture to play a critical role in the rapid development of the Internet of Things.
For many legacy companies, culture change is the biggest challenge. The researchers in this report have developed a guidance framework for traditional organizations in any industry. This process starts with recognizing and understanding the four key values ​​of digital culture (impact, speed, openness and independence). It is then developed by adopting or refining digital readiness practices based on the expressed values ​​that shape employee actions and organizational performance.
Culture, sometimes described as a “way of doing things,” is a set of values ​​and norms that guide human interactions. Also, culture lies in the accepted values ​​of management, the unspoken assumptions of employees, and the usual accepted behaviors that help the organization succeed in the chosen environment. The good thing about culture is that it provides clarity and coherence. The negative thing about it is that it can make the old ways so entrenched in a company that it cannot adapt to a changing world.
Changing culture is harder than strategy because much of it is hidden and in the subconscious mind.
It is also very important that the leaders of traditional organizations know exactly which digital practices and values ​​they want to achieve. At first glance, it seems like there are many values ​​to choose from. For example, Netflix has released more than 100 slides to describe its culture. However, few core values ​​such as high performance, freedom and accountability lead to practices that bring innovation and organizational growth.
Company leaders are seeking to shift from offering individual rewards for individual contributions to recognizing the importance of utilizing the work of others. Courageous curiosity, active search and adoption of a single and integrated approach are other important changes.
Culture is the biggest barrier to digital transformation, according to 2017 MIT-Kapchminai joint research. Organizational employees generally resist new behavioral standards; Because they consider old behaviors to be the cause of their success and consider new standards as risky, and in most cases, the leadership of the organization also ignores the importance of the culture factor.

Instead of focusing on changing the way people think, organizations should focus on changing the way they work. When employees switch to new ways of working and see its positive effects, they gradually come to terms with the new ways of working, and over time, their mentality also changes. One of the effective ways to change organizational culture is to break organizational bureaucratic standards and empower people at all organizational levels. In fact, the main goal is to create an entrepreneurial culture at the lower levels of the organization.

According to the joint research of Capchminai and MIT, the dimensions of digital culture are:

1. Innovation
The predominance of behaviors that support risk-taking, transformative and deconstructive thinking, and the search for new ideas

2. Data-driven decision making
Using data and analyzing it to make better business decisions

3. Partnership efforts
Creating cross-functional (inter-departmental) teams to optimize the skills of the organization’s employees

4. open culture
Extent of partnerships with networks outside the organization, such as third-party suppliers, start-ups, or customers

5. Digital mindset
A mentality based on which digital solutions are considered as default solutions to solve the organization’s problems.

6. Agility and flexibility
Speed ​​and dynamism in decision-making and the organization’s ability to adapt to new technologies and changing customer demands

7. Customer Orientation
Using digital solutions to expand the customer base, create transformation in customer experience and co-create new products

The results of this research in the field of digital culture and its dimensions show:

• There is clearly disagreement in all dimensions between the views of employees and leaders in relation to the existence and extent of development of digital culture dimensions in the organization.

• The largest gap between the views of employees and leaders in relation to the existence and development of digital culture dimensions in the organization has been observed in the two dimensions of innovation and collaboration.

• The most and least important dimensions of digital culture in organizations are customer orientation and innovation, which are considered in 59 and 20 percent of organizations, respectively.

• Innovation and collaborative creation is a significant problem for all organizations; Only 7% of organizations can test new ideas and implement them quickly.

• The use of data for decision-making has not yet been fully considered in organizations.

• Organizations lack agility and flexibility and cannot lead them in new directions by empowering the workforce.

• Many organizations do not have a digital mindset and do not consider digitalization as a normal business strategy or approach.

• In general, organizations have made the most progress in the dimensions of collaboration and customer orientation, and they still have a long way to progress in other dimensions.

• 69% of senior executives believe that innovation culture exists as one of the most important aspects of digital culture in their organization; While only 37% of employees have this belief. It was also found that the behaviors, processes and systems that grow in the culture of innovation do not exist in many organizations.

• 85% of senior executives believe that their organization has a collaborative culture, while only 41% of employees believe this.

From the perspective of digital culture leadership, organizations fall into three categories: leading, trailing, and lagging. Leading organizations in digital culture, which include 34% of organizations, have the following two main characteristics:
• There is continuity and continuity in their attention to the dimensions of digital culture.
• The leaders of these organizations have been successful in aligning the macro goals of the organization with the digital culture.

Other characteristics of leading organizations are as follows:

• Leading organizations align key performance indicators and incentive systems with digital transformation strategies.

• Leading organizations seek to improve current strategies. For example, when hiring employees, they consciously look for behaviors such as creativity and independence of action in applicants.

• These organizations monitor and measure the evolution of culture. Since the effort to change the culture, especially in traditional and large organizations, is concentrated and costly, therefore its effective measurement is necessary and vital.

• Leading organizations drive digital culture change with committed leadership.

Elements of a long-term program to create a digital culture (coding DNA)

Forrester has also provided a model for cultivating digital culture. According to Forrester 2016, in order to create a sustainable digital culture, business leaders must institutionalize digital skills, knowledge, processes and technologies in their organization and adapt and strengthen their culture with the change and evolution of the world around them.
In his report, Forrester points out the following points:

• Being agile and working inter-unitally
• Emphasizing the value of digital technologies
• Institutionalizing customer focus in the decision making process
• Light governance structure

Forrester emphasizes the two values ​​of risk-taking and flexibility in the business digitalization journey and adds that there is no definitive plan for digital transformation; Goals are fluid and evolution is a continuous process. Forrester 2016 defines three key steps for managing change in the digital age:

1. Creating a space for change including the following actions:
• Creating a customer-centric perspective
• Identify support structure and cooperation among key stakeholders for digital actions
• Provision of resources for technology and people
• Selection of the digital change management team

2. Accompanying the organization
• Evaluating readiness to understand and accept new digital values
• Employing digital heroes
• Design appropriate digital communications

3. Develop and maintain change
• Recognition of successes in the path of digitalization
• Supporting continuous learning in the digital domain
• Continuous monitoring of digital adoption in the organization

In its 2017 report, Microsoft assumes seven key dimensions for an agile digital culture. Each of these seven dimensions returns to one side of the balance (picture below). One side of the balance relates to organizational structures (people, policy, ethics, etc.) and the other side represents what the organization does (for example, tools and technology).

Seven dimensions of agile digital culture from Microsoft’s point of view

• People: Empowerment of people supports digital transformation.
• Leadership: The ability to manage effectively in a digital world improves the organization’s performance.
• Technology: Technology defines the data problem in the organization; So that employees can manage risk and take advantage of opportunities.
• Tasks: The mix of tasks should be optimized to enable digital transformation.
Structure: Network structures support digital transformation.
• Strategy: Different competitive strategies are a response to the needs of digital transformation.
• Policies: Internal and external environmental restrictions affect digital transformation.
• Ethics: Digital transformation requires specific policies regarding appropriate use of data.

According to Microsoft’s findings, the 5 challenges of digital transformation are rooted in the 7 mentioned dimensions, which are:

• Collaboration not competition: helping people realize the collaborative potential of digital tools
• Overcoming fear: supporting people to overcome the pressure and nervousness caused by change
• Demonstrating values: providing resources and frameworks for people to experience and use technology
• Respecting the ecosystem: understanding the organization’s operating environment
• Agile living: helping people move towards a flexible and forward-looking culture based on improvement and innovation