Cultural issues main obstacle to digital transformation: Capgemini

Corporate culture is one of the biggest hurdles in the journey to becoming a digital organisation, according to a new study by Capgemini.

The study, published by Capgemini and analyst Brian Solis and titled ''The Digital Culture Challenge: Closing the Employee-Leadership Gap', uncovered a big cultural disconnect between leaders and their staff.

Capgemini and Solis spoke to more than 1,700 respondents at 340 organisations across eight countries, finding a significant perception gap between the senior leadership and employees on the existence of a digital culture within their organisations. While 40 per cent of senior-level executives believe their firms have a digital culture, only 27 per cent of the employees surveyed agreed with this statement.

Participants included 20 per cent of senior executives, 40 per cent middle management respondents and 40 per cent employees in non-supervisory roles across five industry sectors: automotive, banking/insurance, consumer products, retail and telecommunications.

“To compete for the future, companies must invest in a digital culture that reaches everyone in the organisation. Our research shows that culture is either the number one inhibitor or catalyst to digital transformation and innovation,” Solis said.

“However, many executives believe their culture is already digital, but when you ask employees, they will disagree. This gap signifies the lack of a digital vision, strategy and tactical execution plan from the top.

“Cultivating a digital culture is a way of business that understands how technology is changing behaviours, work and market dynamics. It helps all stakeholders grow to compete more effectively in an ever-shifting business climate."

Overall, the report found  62 per cent of respondents see corporate culture as one of the biggest hurdles in the journey to becoming a digital organisation, sparking concerns that companies risk falling behind competition in today’s digital environment.

Additionally, the data shows that this challenge for organisations has worsened since 2011 by seven percentage points, when Capgemini first began its research in this area.

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.

It found that employees don’t see their company’s culture as ‘digital.’ It also concluded that the ‘digital culture gap’ is a result of 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. 

Capgemini head of digital services, Cyril Garcia, said digital technologies can bring significant new value, but organisations will only unlock that potential if they have the right sustainable digital culture ingrained and in place.

“Companies need to engage, empower and inspire all employees to enable the culture change together; working on this disconnect between leadership and employees is a key factor for growth. Those businesses that make digital culture a core strategic pillar will improve their relationships with customers, attract the best talent and set themselves up for success in today’s digital world.”

Other key report findings show there’s a profound disconnect between leadership and employees on all the dimensions of digital culture - with innovation still not a reality for many organisations. 

“Only seven per cent of companies surveyed feel that their organisation can test new ideas and deploy them quickly,” the report found.

“This figure echoes employees’ sentiment about culture of innovation, with only 37 per cent of respondents stating that their organisations have a culture of innovation, experimentation and risk-taking against 75 per cent of senior executives. Organisations need to actively reward risk-taking and create an environment where employees can experiment.”

Additionally, there is strong disagreement on collaboration practices. The findings reveal a divide between senior-level executives and employees on collaboration practices. 85 per cent of top executives believe that their organisations promote collaboration internally, while only 41 per cent of employees agreed with this premise.

The research also found considerable differences between what leadership and employees perceive as a clear digital vision. Sixty two per cent of respondents in leadership positions affirmed they have a well-defined strategy to achieve their digital goals, while only 37 per cent of employees agreed with this statement.  

In conclusion, the report highlights that 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 organisation. Leadership and the middle management are critical to translating the broader digital vision into tangible business outcomes and rewarding positive digital behaviours,” it said.

The report recommended deploying digital change agents and empower employees to drive a digital culture; designing new digital KPIs that focus on behaviours; making digital culture change tangible; and investing in the digital skills that matter.

It also recommended that organisations communicating a digital vision and have visible leadership involvement; using digital collaboration tools to increase transparency and to reach out to employees; as well as taking a systems thinking approach to culture change.