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7% Hike in Cultural Divide is a Setback for Digital Transformation: Report

 

Capgemini and Brian Solis, a digital analyst, have announced the findings of The Digital Culture Challenge; Bridging the Employee-Leadership Disconnect report. The research says that 62% of respondents see corporate culture as one of the biggest hurdles in the journey to becoming a digital organization. As a result, companies risk falling behind competition in today’s digital environment. Furthermore, the data shows that this challenge for organizations has worsened since 2011 by 7 percentage points, when Capgemini first began its research in this area.

Employees don’t see their company’s culture as ‘digital’

The report, which includes more than 1,700 respondents in 340 organizations across eight countries, uncovers a significant perception gap between the senior leadership and employees on the existence of a digital culture within organizations. While 40% of senior-level executives believe their firms have a digital culture, only 27% of the employees surveyed agreed with this statement.

The survey asked respondents to assess their companies’ digital culture based on seven attributes: their collaboration practices, innovation, open culture, digital-first mindset, agility and flexibility, customer centricity and a data-driven culture. Insights gathered from the report, and through a series of focus interviews, helped to identify some of the reasons behind this digital culture gap including senior leaders failing to communicate a clear digital vision to the company, the absence of digital role models and a lack of KPIs aligned to digital transformation goals.

Cyril Garcia, Head of Digital Services and member of the Group Executive Committee at Capgemini, said: “Digital technologies can bring significant new value, but organizations will only unlock that potential if they have the right sustainable digital culture ingrained and in place.”

Key report findings show that there is a profound disconnect between leadership and employees on all the dimensions of digital culture:

  • Innovation is still not a reality for many organizations. Only 7% of companies surveyed feel that their organization can test new ideas and deploy them quickly. This figure echoes employees’ sentiment about culture of innovation, with only 37% of respondents stating that their organizations have a culture of innovation, experimentation and risk-taking against 75% of senior executives. Organizations need to actively reward risk-taking and create an environment where employees can experiment.
  • There is strong disagreement on collaboration practices. The findings reveal a divide between senior-level executives and employees on collaboration practices. 85% of top executives believe that their organizations promote collaboration internally, while only 41% of employees agreed with this premise.
  • Leadership believes they have a digital vision, employees disagree. The research found considerable differences between what leadership and employees perceive as a clear digital vision. 62% of respondents in leadership positions affirmed they have a well-defined strategy to achieve their digital goals, while only 37% of employees agreed with this statement.

Companies are failing to engage employees in the culture change journey. Getting employees involved is critical for shaping an effective digital culture and accelerating the cultural transformation of the organization. Leadership and the middle management are critical to translating the broader digital vision into tangible business outcomes and rewarding positive digital behaviors.

Digital culture leaders set themselves apart

The research identified a group of digital culture ‘front-runners’ (34% of organizations surveyed) who performed consistently well across the seven dimensions of digital culture and whose leadership has largely succeeded in aligning the wider organization to the desired culture. The UK, Sweden and the US have a strong representation of digital culture leader organizations (63%, 60% and 56% respectively), while automotive (43%), consumer products (38%), and telecoms (32%) have the highest proportion by industry sector.

These digital culture front-runners tend to hire differently than their digital slow-moving counterparts, consciously looking for behavioral traits such as creativity and autonomy when recruiting – 83% of front-runners compared to 29% of the digital slow moving counterparts; adjusting role descriptions and KPIs to align with overall digital transformation (75% compared to 17%) and aligning their compensation structure to digital transformation objectives (70% compared to 13%).

How to create a digital culture?

Creating a digital culture and affecting change requires patience, tenacity and constant vigilance. The new report sets out some key elements needed for organizations to adopt a digital culture:

  • Deploy digital change agents and empower employees to drive a digital culture
  • Design new digital KPIs that focus on behaviors
  • Make digital culture change tangible
  • Invest in the digital skills that matter
  • Clearly communicate a digital vision and have visible leadership involvement
  • Use digital collaboration tools to increase transparency and to reach out to employees
  • Take a systems thinking approach to culture change

 

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