For more traditional businesses, taking the step to evolve a digital strategy to stay competitive may create an unexpected cultural divide between the ‘old’ and ‘new’ order unless thought is given to how this is managed. As Generation Y, or ‘Digital Natives’, grow up to become employees and customers themselves, so traditional businesses need to adapt to meet or exceed their expectations. However, existing employees and customers must also be brought along.
In adapting the old to meet the new, organisations can unwittingly drive a culture gap between ‘digital’ and ‘traditional’ creating friction where neither sees a common vision or fully understands where objectives are shared. Left unchecked, the gap could become a gulf, your workforce could begin to split into ‘us and them’, and your value proposition may be left floundering in the middle.
Culture the Digital Way – Innovation and Creativity
It takes time to change culture effectively and unlike companies that are ‘born digital’, traditional companies may struggle with the relentless rapid change that underpins the digital way. The growing use of social media and the expectation of response immediacy is becoming a feature of this cultural evolution. Cultural re-invention and the ability to adapt quickly to change relies on being creative and innovative; it must be made possible for the workforce to display these behaviours and for the business model and operational processes to support this.
When adopting more digital practices, organisations must carefully manage the evolution of legacy systems and legacy culture. It is not a case of simply grafting on a digital proposition and hoping it will take. Despite the ‘virtual’ nature of the digital business way, real customers and employees are drivers and recipients of the changes being made.
Succeeding in the digital world depends upon understanding the end user customer and being innovative in quickly reacting to changing patterns or predicting what a customer need might be. This is often without 100% of tangible facts so some decisions (underpinned by technology) may seem like ambiguous leaps of faith.
In the retail space, the best of the digital companies have embraced this risk but used the facts they have in upselling and cross-selling to us, reminding us of ‘what other customers have bought’ or what ‘we might like’ before we head to the online check-out. Companies such as Amazon obsess about customer service. Products are despatched within hours, delivery occurs at the convenience of the customer and the whole experience feels seamless, effortless. They make it easy for the customer and they do it instantly. They provide value-added service, tailored to customer need – it’s that level of service (and often the immediacy of it) that many of us now expect from all companies we deal with.
Being (and staying) creative and innovative, then capitalising on customer, competitor and market research/analysis, are distinctive culture features of successful digital organisations. Unless digital players are continually researching customer needs, analysing their data and acting upon emerging patterns, they could quickly lose out to their nearest competitor in selling additional goods, providing a value-added service or bringing the next big thing to market. Building these aspects into the culture and hiring Generation Y employees who are strong in these areas help make the born digital companies successful.
Avoiding a Culture Clash
For a more traditional organisation, adapting to thrive in this digital world can prove challenging given the need for a significant cultural change. John Lewis is a good example of a traditional British high street organisation that has evolved a successful digital business operating in tandem with its physical retail stores. Rather than ignoring its reputation as a trusted customer service led organisation, it has made a feature of this cultural attribute within its online business in building a complete customer experience. As it has seen high sales growth from its online business, it is now extending its digital reach to a new global customer base which will buy with confidence assured by the traditional cultural reputation.
The cultural shift required to support a ‘bricks and clicks’ operation also has a significant influence on operational processes and how these support customer interactions. During the process of change, new and traditional cultures can rub up against each other. It is important to understand where the two cultures meet and define how best to smooth the interface between them. To avoid the workforce splitting into ‘us and them’, employees will need regular, consistent, communication in a variety of ways from their senior and more immediate leaders. This will help them understand in their own terms that adopting a new way forward will help secure them and the organisation a more competitive future.
How the leadership team and workforce engage with new cultural behaviours, practices and attitudes can fuel or diffuse the culture gap. For example, the significant growth in online sales at John Lewis has led to a revised, less hierarchical, retail organisation structure. Strong growth is being seen online but customer practice may still be to visit the store to see what the product is like prior to purchase. Hopefully, customers will also buy other goods whilst there so a different model may support this change and be more cost effective. To stay current and competitive, other organisations may need to reorganise to support a multi-channel model. It’s therefore important for all leaders to create and cascade a clear vision that employees and customers can understand and engage with so that emergent cultural practices aligned with external and internal changes can be supported.
Audit: Define the Gap
A culture audit can help identify the gap between the two cultures, as it can highlight where potential risks and opportunities are and provide assistance with risk mitigation and management. For example:
- The existing organisation may traditionally work functionally and see little need for collaboration. However, for the new digital business to survive, it may be essential that a highly collaborative way of working is developed.
- In the existing business, employees may commute to work every day, work 9-5 serving predominantly local customers and prefer a very structured working day. If the need for the new digital business is to be innovative, flexible, and have working hours to enable interaction with international customers 24 hours per day, this will significantly impact existing employees and ways of working.
- Customer support may need to happen in real-time using online chat to serve an international base rather than over the phone or face-to-face at a more local level. For some, this could pose a challenge.
Employees may be excited about doing something different and see career progression opportunities or feel daunted/threatened by radical changes. A hiring or development programme may be needed. Some employees may feel positive, some negative, which influences the views of others unless understanding and engagement is fostered early on and throughout the change process.
The table below offers a simplified illustration of how a traditional organisation may see itself culturally now and how it may need to change to be successful as a multi-channel business:
This scenario provides a good illustration of where cultural similarities and differences could be across four dimensions of leadership, workforce, operational and commercial:-
- If the requirement is for transformational rather transactional leadership, and a risk-taking rather than risk-averse approach, does the current leadership team have existing capability/desire to rise to the challenge?
- Both traditional and digital leadership cultures are ambitious so this may help to move things along
- What additional skills may be needed to make the new digital organisation successful?
- What will any new leadership talent look like and how should hiring decisions be made?
- New employees comfortable with higher levels of mobility may be sought and their expectation may be to work flexible hours remotely rather than coming into the office each day. This could be uncomfortable for existing employees if they do not understand why this is the case. However, the experience and skill of existing employees in managing current operational systems and processes may be essential to ensure continued success. Knowledge and understanding of this could help diffuse some uncertainty.
- To support a multi-channel model, a new organisational structure may be needed to manage a new process but existing experience could be re-deployed elsewhere. Processes and systems may require greater centralisation, for example with existing and new employee collaboration essential for success.
Jointly Creating a New Culture
Organisations need to find points at which the traditional and digital can meet and collaborate using joint experience to reach a common goal. Collaboration opportunities between the existing and new businesses could also provide an important step in building understanding of the new vision and in creating a new jointly created culture which harnesses the best of both. This will help employees to close the cultural gap and to find a shared way forward. If customer service is a primary focus for the current organisation, building a vision of how this can evolve to become a complete customer experience will help the existing team make sense of the vision in their own terms. Leadership communication of a common goal and the part employees play in it assists employee understanding of change and where they can take ownership.
By engaging the workforce in changes and helping them understand why, resistance is reduced and managed more effectively to make strategic and cultural changes more acceptable. Resistance will not be avoided altogether, but a culture audit is likely to find points where the two worlds could meet more productively and help leaders and teams move through the change curve at a faster pace. How practices are engaged with internally will help bring traditional customers along with the changes too. After all, a key driver of the change may be the meeting of customer driven need following significant market research and data analysis. There is no quick fix culture change recipe to be applied to any organisation. By gaining an in-depth understanding of the existing organisation, where it wants to get to and in what way, communication and engagement throughout the process can help manage cultural risk.
By its nature, the digital world is constantly changing and dynamic. For more traditional businesses coping with such dynamic change can be particularly daunting. There will always be aspects that cannot be controlled and things that take us by surprise. However, digital business models can be designed to support key cultural attributes that help smooth the way and build success both internally and externally. Taking steps to close the gap between the traditional and digital cultures to find a new way forward can enhance both employee and customer experience and help regain competitive edge.