Cultural Analysis and Its Rising Importance in Managing Successful Change in a Digital Environment

  • March 19, 2018
NTT DATA Services Organizational Change Management Blog Post

Rapid change, intense competition and increased complexity in markets are making it challenging for organizations to stay competitive. In such a frenzied environment, it’s even more important for companies to increase their agility in both their business processes, and decision-making abilities. This agility will help them resolve problems faster, accelerate innovation, and reduce the “flash to bang time” for deploying products and services. And for organizations to be agile, they need to manage change effectively and quickly.

In an environment replete with new digital companies, start-ups, and traditional companies, organizations are realizing the value of Organizational Change Management (OCM) and the assured results it can deliver. OCM is increasingly critical for companies to succeed, because it recognizes the complexity of the organization’s culture and human behavior and can predict, address, and prevent dips in productivity during a change initiative. When a cultural analysis, or the ability to interpret cultural representation and practices, is applied to OCM, it can provide organizations with the “as-is” state and identify the “to be” state. This can then help the organization re-align its culture to support its objective.

Understanding culture can be useful in two ways. First, cultural insights tell us if employees are willing to accept change; and second, a cultural assessment is likely to determine the root cause of the problems that impede stronger performance. This awareness and understanding will reduce the barriers brought on by change and the people affected by it. A cultural analysis can:

  • Provide a snapshot in time of the major beliefs and values of the organization that influence communication practices, interactions and required skills
  • Reveal the unseen communication practices, such as important rituals and routines or ways power is exercised for ethical or unethical purposes
  • Provide insight for new job orientation and job promotion practices
  • Assist the change management process by uncovering cultural strengths and potential problem areas

Cultural analysis is gaining importance to support today’s digital evolution. When borrowing practices from Agile and DevOps (or more specifically, Business Development Operations (BusDevOps)), it can help the organization transform and manage change more effectively.

Both Agile and BusDevOps play a significant role in an organization’s change initiative. While Agile helps improve a major IT function (i.e., delivering software), DevOps helps improve the interaction and flow across the length of the IT function’s lifecycle. Research has shown that the largest element requiring adjustment during an organization’s digital change is predominately the development of talent and skills to support the digital environment. When employees have the skills required to act in a new way, they are more inclined to embrace the desired changes, both in mindset and behavior. Understanding the variances within the “as-is” and “to-be” capabilities helps establish the gap analysis and mitigation plans to ensure that the people affected by the change are fully supportive of the new digital environment.

So, how does an organization evolve from the “as-is” to the “to-be” state? There are two ways.

  • First, the creation or amendment of the formal levers of change, including leadership policies, role definitions, and people interactions, which address the processes and structures that support digitization. This activity organizes the introduction of new digital channels into traditional operation models; and
  • Second, the informal levers that include key behaviors, role models, and networks, which help employees think, feel, and behave in new ways.

Using these formal and informal levers in an integrated fashion can help people adapt to new ways of doing business, and enable companies to deliver the multi-model channel of digitization customers want.

From a cultural perspective, training is important to ensure team members have the skills necessary for managing and using the new digital technologies. But training is not the only cultural dimension that should be considered. A few ways to enable cultural change to support digitization include:

  • Matching strategy and culture: Too often a company’s strategy, imposed by the leadership, is at odds with the ingrained practices and attitudes of its culture. Executives may underestimate how much an organization strategy’s effectiveness depends on cultural alignment. Culture trumps strategy every time. Understanding the organization’s strategy, mission and goals, (and how the employees play their part in supporting the goals), promotes inclusion, value and support.
  • Focusing on a few critical shifts in behavior: Trying to “boil the ocean” is a fruitless effort. Identifying which cultural shifts are essential in support of the digital footprint is key, and listening to the employees both from the formal and informal communication channels can provide additional mechanisms for change.
  • Measuring and monitoring: Like any change, it is important to measure and evaluate how your cultural changes are progressing. Dynamic KPI’s allow executives to see how change is progressing and if required, when to present more rigor to redirect the effort to support the success of the changes.

In any major change initiative, the management and people affected by the transition need to evaluate, and profit from the strong cultural attributes of their company to build momentum and create lasting change. Companies that are able to do so, establish a “culture led” approach to change and substantially increase the agility, success, and sustainability of their transformation initiatives.

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Yvonne Austin

Yvonne Austin is a Senior Management Consultant with the Business Process and Change Management team at NTT DATA. She has more than 20 years of experience in OCM, IT service management, project and program management. She is always open to extending her knowledge and adapting to new challenges.

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