Dive Brief:

• A successful digital transformation is only possible with a digital culture, analysts at Boston Consulting Group (BCG) said in a recent report. This means that organizations must not only have digital products, services and ways of relating to customers, but also that businesses need to cultivate a culture that supports transformation and the way businesses relate to others internally and externally, analysts said.
• In evaluating 40 digital transformations, BCG found that by focusing on culture, organizations were five times as successful in making the transition than those that didn't focus on culture. In the firm's other findings, 80% of organizations that fostered a digital culture reported breakthrough performance in the transformation.
• A healthy digital culture will grow from five key elements, according to BCG. Digital culture-focused employers encourage employees to focus externally and engage with customers and partners; value delegation over control; inspire bold over cautious action; promote more action and less planning; and value collaboration over individual performance.

Dive Insight:

Culture is at the center of all organizational functions and initiatives; without every member's stake in and support of a major transition, that transition has far less chance of succeeding. A cultural shift requires changes in mindset and behavior and in the way things are traditionally done.

What trips up many in HR is determining what "culture" really is. But a practical way to frame culture is the way an organization works and how it gets things done. As the nature of work evolves in line with digital transformation, culture must shift to keep up with the change. Lagging functions, operations, behaviors and thinking patterns jeopardize an organization's competitiveness in attracting, retaining and engaging talent.

Digital transformation is more than just a buzzword — it's a lifeline for any company with a legacy infrastructure and outdated processes. Admittedly, digital transformation is an ongoing project despite about one-fifth of companies saying they've completed their transformation.

As long as a company continues to collect data, it will always be evolving and transforming. To ensure smoother transitions, companies need a "continuous innovation culture" which helps define the current status of a company and where it wishes to be down the road.

The "old-school, technophobe leaders" essentially need to back down from technical innovators, according to a Forrester report. Doing so with culture is crucial because it contributes to an organization's internal and external brands.

Just as a positive, forward-moving culture can elevate a company as both an employer of choice and an innovator, a culture that's stuck in the past, or tarnished by unlawful or unethical conduct, can have the opposite effect.