Neglect your company’s culture at your peril.
For better or worse, corporate culture plays an important role in companies’ adoption of the new ways of working and new technologies that move businesses forward: Receptive workforces speed adoption; skeptical ones cause it to slow, sometimes dramatically.
Executive awareness of culture’s role can affect the bottom line. Our 2018 study of senior executives found that among leaders who express concern that their company culture is holding back transformation and investments in digital business models, revenue growth is 36 percent higher than those who are more complacent towards culture.
Change doesn’t come easily. In conversations with executives, we hear concerns about sluggish workforces unprepared to adapt. Yet the problem reaches all the way to the boardroom: Our research found many executives struggling to get their footing in the new world of work. As intelligent machines increasingly work alongside us, they’re redefining trust, work relationships and collaboration. Some workers embrace the change, others resist.
Preparing Your Culture
Here are six actions executives can take to build cultures that prepare their organizations and employees for the changing nature of work in the digital age:
- Set the stage for change. It starts with the concept of the platform, or the layer of software that provides the virtual sphere of information around a company’s products, services and ways of work. Platforms are the organizing principles around how modern work is increasingly done. GE, Bosch and Siemens are among the companies investing tens of millions of dollars in platforms. How can leaders embrace and evangelize platform thinking? One way is to codify new ways of work, such as co-creation, collaboration and innovation. Amazon, for example, widely promotes a set of leadership principles to establish corporate values. Spotify organizes teams that rapidly swarm a task, activity or engagement. A second way for leaders to set the stage for change is to increase the frequency and quality of communication. Because platforms flatten the hierarchy, they challenge CEOs to find new avenues to communicate strategy, direction and progress. Quarterly emails no longer cut it. Salesforce founder and CEO Marc Benioff sends out daily messages to employees using his own social media channel. Develop a communication style that attracts employees to a mix of formal and informal channels.
- Showcase your company’s positive work culture. With its maker space, GE’s digital headquarters in California helps staff envision how innovation gets done. The innovation center at Swiss engineering company Bühler features a product development lab, a 300-person auditorium and work space for 100 individuals. In addition to showcasing work culture, such labs signal the social nature of innovation to the wider workforce. They also double as show-and-tell spaces by providing an opportunity for staff to appreciate how your company is evolving — and prospering.
- Open up organizational structures to rewire power and decision making. Taking advantage of emerging opportunities means assembling extended work teams – from inside and outside the company — that blend skills, capabilities and innovative thinking. The challenge? How best to splice the resulting distributed centers of innovation into the organization. One solution is to establish an internal accelerator dedicated to a specific business issue such as predicting customer churn through deep-dive analytics. Allow stakeholders and teams to coalesce around the issue, and assign the accelerator a mandate, including funds to experiment with emerging technologies such as virtual reality, gamification or AI. Another option is to rethink the corporate seating plan: Co-locate business functions on a single floor or in a node and focus their efforts on a segment or platform niche. Some companies move teams away from the business operations to give them breathing room. In the UK, financial services firm Barclays, retailer John Lewis and even the British government run internal start-up teams geographically removed from the mothership.
- Build people-to-machine workflows. Rather than gut instinct and intuition, leaders will increasingly direct work using cognitive systems, algorithms and robots. Yet management rosters that brim with a mix of humans and AI systems will raise a host of new challenges. How do you delegate roles between robots and humans in a shared business process? How do we troubleshoot, judge and redress employee grievances? New managerial roles will focus on automation support and metrics, as well as managing process outcomes. For example, a healthcare payer’s training needs for the implementation of robotic process automation gives us a clue to the changes ahead: The new system for validating and adjudicating claims required managers to learn how to work with automation metrics.
- When it comes to employee experience, go for gold. Similar to a superior customer experience, an innovative employee experience spurs the loyalty and productivity that support a strong workplace culture. It’s likely that while your workforce is accustomed to highly personalized digital experiences such as Netflix, or payments with a fingerprint, yet their employee experience remains stuck in clunky, manual processes that cause delay and frustration. By building an infrastructure of data and analytics for talent management for example, you could empower the modern workforce by focusing on continuous skills regeneration.
- A strong culture expects employees to be vocal. Digital technology makes it easy – and expected – for employees to lend their voices to decision making. Ensure cross-company mechanisms like a corporate social media feed or intranet are in place to accommodate, and act on, employee input.
Thriving in the digital era demands a corporate culture that values innovation and collaboration. The best leaders recognize that talented, inspired people are their company’s main engine for success.
Related: How CEOs Can Quickly Make Changes to Corporate Culture