Organizational culture shapes digital transformation
Presented here for discussion is a summary of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
When large organizations launch so-called digital transformation initiatives, it is often believed that integrating new technology with existing systems poses the biggest challenge. Often, however, grappling with organizational culture presents a bigger problem.
While some firms have a DNA that accepts change relatively easily, others are far more resistant.
In an interview with Knowledge@Wharton, Nik Puri, SVP of international IT at FedEx, said some of his peers view “digital transformation” as the continuing automation of IT, now including big data, cloud and artificial intelligence. But he believes it’s a business change-management journey.
Mr. Puri said, “It’s about adopting new technologies, but it’s also about adopting new ways of working and new mindsets to deliver new business value.”
It’s this new business value creation that differentiates the concept of digital transformation from what others may call digital optimization.
All the different parts, whether access to new data streams, organizational models or design thinking, have to work together to drive the new business value creation.
“The analogy I always use is that of layer cakes,” Mr. Puri said. “All three cakes have to be consistent, and they have to have a harmonization around them, for the user to have a delightful experience.”
At FedEx, hackathons, which bring teams together for two or three days to explore new processes, have been one way leaders have driven digital transformation.
Mr. Puri said, “We as a team of leaders have to ask ourselves: Are we empowering our teams to think about these ideas in ways where, if they fail, they stand up, find a new way of doing things and move forward? Is there a mindset for rapid prototyping? All these have to come together like layer cakes for us to be able to drive a new way of working and a new mindset, leveraging new technologies.”
Dan Alig, CIO at Wharton Computing and Information Technology, who spoke alongside Mr. Puri, likened the hurdles to the way e-mail at the Wharton School was initially rejected internally when it was introduced about 20 years ago but has since became a fundamental communication tool. He said, “When we look at the new technologies, it’s just a different way of thinking about how we empower everything around us and change the way we operate.”
DISCUSSION QUESTIONS: Do you agree that coping with organizational culture is typically the biggest challenge for retailers instituting digital transformations, or is tech integration the bigger challenge? What advice would you have for nurturing a culture that adapts more readily to new technology?