Is your company culture ready for the digital age?

6 minute read
Through studying companies that have successfully transformed into digital organisations, Dan Strode, global director of culture and strategy at Santander and author of The Culture Advantage, has found they have eight traits in common – all connected to culture

Growth mindset is needed in digital age

Digital technology is changing absolutely everything. No individual or company is safe from change and the constant disruption of the modern era. We are living in a world where artificial intelligence (AI) is taking the world by storm and millions are logging onto ChatGPT to engage in discussions and debate with it. However, it isn’t only AI that is changing our world. We are also seeing augmented reality, virtual reality, 5G, blockchain, robotics, botech and a whole host of transformational technologies flooding the market.

I am fond of saying that the pace of change we are facing today has never been so fast, yet will never be so slow in the future. The difficulty and challenge for us is that these technologies are all hitting us at the same time, and when combined, is creating an exponential pace of change. It is in stark contrast to previous disruptive technologies, be that the steam engine or the internet – which both were deployed in isolation: just one change at a time.

So, with these disruptive technologies changing the world our companies have to keep up with the pace of change too. Because if they don’t  they will become extinct. Exactly as we have seen with famous case studies like Kodak, who failed to adopt the digital camera, or Blockbuster, who failed to embrace DVDs and later the internet.

What we can learn from these corporate failures is quite telling. We can see that the companies which failed to keep up with the pace of change didn’t falter because they failed to have access to the technology, but rather they faltered because they didn’t have the culture to embrace and partner with the technological advances.

The eight cultural advantages

The good news is that success leaves clues. I have identified through studying the most successful companies – the ones which have embraced change and have succeeded in becoming digital organisations – and I found that there are a series of common traits they display, all related to their corporate culture. They have identified what I call ‘The Culture Advantage’ and consistently display eight common traits day-in day-out.

The eight traits in full are:

  • Re-think your business model
  • Create creativity with constraints
  • Have a growth mindset
  • Use the wisdom of crowds
  • Embrace technology
  • Hire well
  • Put your people first
  • And leaders, participate in culture

That said, it seems to be that two of these traits are of particular importance when it comes to future proofing your company for the digital age. They are having a growth mindset and embracing technology. Two things which on the surface seem easy to say and do, but are in practice much more difficult for companies to do – thanks to cultural blockers and the human biases we all have.

The importance of a growth mindset

Firstly, take the principle of having a growth mindset into account. This is a term popularised by Dr Carol Dweck in her wonderful book Mindset: The new psychology of success (2007). In this book Dweck suggests that there are two types of people (and by extrapolation companies) – those who have a “growth mindset,” which is to say they believe their success is affected by the time and effort they put into something, they embrace change, challenges and seek to learn from their experiences. They often believe that life is an ‘and’ situation, rather than an ‘either or”’scenario. These people are put into contrast with those who have a ‘fixed mindset’ which is to say people who believe their skills and abilities are innate and fixed, cannot be improved or enhanced upon. And thus, prefer to stay still, not taking risks and often avoiding challenges.

The good news is that companies, as well as people, can be taught and trained to have a growth mindset. The key necessity for companies to install a growth mindset across its people and operations is by having psychological safety. Psychological safety is the belief that you won’t be punished or ridiculed for speaking up and sharing ideas or feedback. This is a critical element for companies who want to try new things, embrace change and become more innovative and adopt technology.

There are five top tips for ensuring psychological safety in companies:

  • Hold and celebrate courageous conversations (to build a culture of openness)
  • Be empathetic and curious (to make it safe to listen, learn and care about differing views)
  • Remove ambiguity, mismatches and threats (to make it explicit and clear about your expectations in the workplace)
  • Clarify roles and responsibilities (so people know what they are responsible for, so they protect, guard and deliver successful results)
  • Don’t rush to give advice (to give people a chance to solve their problems first and empower them)

Ben and Jerry’s, the ice cream company based in Vermont, United States, is a wonderful example of a company with psychological safety on display, which leads to colleagues feeling like they can take risks and try new things without fear. They don’t hide from their mistakes at the company, rather they display them publicly. At their head office they have set up a Flavour Graveyard which is a physical location which looks like a graveyard, and inside the graveyard you find headstones with the names of flavours that they launched to the market but failed to commercialise successfully. This physical sign shows that they don’t hide from their mistakes, but rather own up to them and learn from them. It shows a level of vulnerability and openness to their team that says it's safe to fail here  and learn, which is the only pathway to success. 

Partner with technology

When you have this level of safety and a willingness to grow you will be well on the way to transforming your company and becoming more digital. However, there is one more element to touch upon, which is being willing to embrace technology.

As I mentioned, successfully becoming digital is so much more than throwing technology at the problem. You also have to change your culture, your mindset and your ways of working so that the digital technology can achieve what you want it to.

When the internet was launched at scale in the early 1990s the world went into panic. Most pundits and companies began to run away from and shun the technology as a passing fad – a fad which had the potential to disrupt the workplace and cause mass levels of unemployment. Indeed, this resistance and positioning was proved incorrect in reality and by a McKinsey study some years later, which evidenced that for every job destroyed because of the internet, 2.6 new jobs had been created, and the internet had accounted for 21% of the gross domestic product growth worldwide in the following years.

It wasn’t just the internet that was causing trouble. Xerox, of photocopier fame, invented the first personal computer but failed to bring it to market for fear of cannibalising their existing photocopy business. Kodak followed the same course; they too had invented a first – the first digital camera. And they also shunned it in favour of their existing print-based and film-based revenues.

So, if you want to digitalise your value you have to embrace technology, much like the Chinese company Lin Quingxuan did during the pandemic. The company, a cosmetics company, found 90% of their revenue dry up overnight as lockdowns swept the country. Their founder had a choice to make – change their business model or close the company. The founder wrote to employees for their suggestions and their response was to “partner with technology”. They pivoted and turned their in-store experience digital. With the in-store beauty advisors turning into online influencers, the staff began using their mobile phones to engage directly with customers on an online platform, providing one-to-one product advice and building huge social media followings. The company promoted their products through these sales advisors turned influencers, offered discounts and held digital sales events (with two-hour events generating sales in excess of what four stores would sell in a month). They had embraced technology and digitalised their value.

Strategies to embrace technology

So, why the stark difference between those who chose to shun technology, and those who chose to embrace it? Well, of course, it comes down to culture and mindset. It is probably better to embrace technology before you are forced to (as in the case of Lin Quingxuan) and there are a number of strategies which can help you do this:

  • Sense, scout and research (ask vendors or consultancies to share the latest technology movements in the market - it is changing so fast you will likely need external advice)
  • Discuss technology internally (ensure you have time in the agenda to talk about technology with the Board, management team, and employees)
  • Partner with others (often you cannot do it all yourself, and joint ventures or win-win projects with external support will help advance your efforts)
  • Experiment (experiments are often more important than expertise - try things in safe spaces and seek real feedback from customers. ‘incubate’ and then scale what works)
  • Recruit (ensure technology acumen is within your Board – you need people with a track record of understanding and deploying new technology)

The question is, do you want to work as a team with technology? We all know that since IBM created Deep Blue to play chess matches the world has never been the same. By 1997 the computer was beating Garry Kasparov at chess convincingly. However, after this shock result, when computers and humans worked together at chess computers could never win on their own.

Embracing technology and fostering a culture where people are safe to try new things will certainly help with your readiness for the digital age.

Daniel Strode, pictured below, is global director of culture and strategy at Santander and the author of The Culture Advantage (out now from Kogan Page). Daniel will be discussing these issues in more depth in a podcast interview with The People Space editorial director Siân Harrington next month. Subscribe to the podcast, Work’s Not Working… Let’s Fix It here

Dan Strode, global director of culture and strategy at Santander

Published 15 March 2023
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