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Are Your People On Board? Cultural Transformation Is the Key to Success in Digital Transformation

Driving Digital Transformation Success Through Cultural Transformation Driving Digital Transformation Success Through Cultural Transformation
 

By John Brinegar, Director, IoT Solution Architecture, Hitachi Vantara, and
David R. Brousell, Co-Founder, Vice President and Executive Director, Manufacturing Leadership Council

Though once considered a radical concept in the eyes of some, the necessity of digital transformation is now embraced by most organizations. The question is no longer whether to digitally transform — it’s now how to do it. But often, those discussions focus myopically upon the technologies involved.

That’s a mistake.

People, after all, are the ones driving change. Technology is the tool they use to do so. If the attitudes, behaviors and goals of your organization’s people — your culture — are not on board with your digital transformation goals, your transformation will likely fail even if you have the right technology in place. Having clear alignment between your technical objectives and your company’s culture is essential for success — in fact, organizations that take a human-centric approach to digital transformation are 2.6 times more likely to see success. 1

Five common business blockers to cultural change

There are several common stumbling blocks that may significantly impede your progress along the path to digital transformation. The most vexing challenges revolve around five key cultural issues:

  • Organizational data isolated in functional or hierarchical silos.
  • A lack of the skills needed to enable digital transformation.
  • The breakdown of inter-team communication and collaboration.
  • Cultural resistance to change rooted in lack of understanding of transformation goals.
  • Fear and worry about job insecurity, or a lack of psychological safety, among employees.

Any one of these cultural barriers presents a significant speed bump to the transformation process. The presence of all five within a single organization — not an uncommon scenario — wreaks havoc upon an organization’s efforts to transform.

Data-Driven Digital Transformation

Stepping over those stumbling blocks

Transformation undeniably involves change — and change and human nature often have a stormy relationship. People tend to resist change, particularly when it makes them feel isolated or left behind. How can companies overcome these stumbling blocks to enable and encourage cultural change in support of digital transformation? The answer involves a mix of technology and people-centric management.

To eliminate data and skillset silos without disrupting your key business processes, you need to gradually build cross-functionality across teams. Consider using tools and techniques such as Kaizen (a management strategy that supports ongoing, incremental change), which many organizations have found to be crucial for success. A top-down commitment to opening silos is equally important; however, the true key to breaking down silos is about understanding, engaging and promoting collaboration across both the formal structures and the informal networks that exist across the organization.

Recently, research has found that the key to identifying and engaging these informal networks is by identifying influencers across an organization and engaging with them. Each silo represents a comfort zone for the group of employees that operates within that silo, and employees may be reluctant to move away from those comfort zones. By activating networks across the organization, company leadership can promote collaboration without incentivization.

Similarly, it’s essential to nurture teamwide collaboration and communication in ways that are nonthreatening to individuals and team cultures. While specialized skillsets and knowledge specific to a team (or even a single task) is valuable to the entire organization, individuals who hold that knowledge often consider themselves the owners of that knowledge — an ownership that they may be reluctant to surrender for fear of diminishing their own value. Commending employees for exceptional knowledge sharing and skill development creates a culture of collaboration while promoting candid communication.

Innovation Culture and Success Factors for Digital Transformation

Leadership should also be sensitive to the language used in communicating transformation initiatives. Phrases such as “breaking down silos” can feel threatening to people working in those so-called silos. Functional areas with their own domains of expertise and knowledge exist for important reasons — and will continue to exist — so leaders should instead talk about “weaving silos together” to achieve cross-functional integration while preserving the benefits of domain expertise.

Adopting agile approaches serves to foster the evolution of cultural shifts across teams, enabling them to be more cross functional. Another tool that can be highly effective in breaking down a range of barriers to collaboration and communication — including differences in age, gender and ethnicity — is reverse mentoring, where younger employees are paired with executive team members to help those executives connect with a younger demographic. Creativity, too, is important when it comes to breaking down cultural cliques. Even discouraging teams from keeping to themselves in settings like company cafeterias can be effective.

Finally, executive leadership, like all other members of the organization, must also evolve. They must embrace the goals of transformation and become comfortable with the higher levels of ambiguity that characterize today’s marketplace.

That said, technology does play a major role in supporting digital transformation initiatives. The right technology can make all the difference in fostering the cultural shift necessary for successful digital transformation. Today’s digital tools can guide effective collaboration, enhance efficiencies, enable standardization and encourage innovation. For example, Hitachi designed a cross-functional 2-day Smart Manufacturing Solution Envisioning Workshop for Logan Aluminum that helped key employees better understand the benefits of specific digital transformation initiatives.

Transformation is really about people

Business organizations are often perceived as lifeless, faceless entities. But in truth, each organization is a collection of people — people who must work together to make the business successful. That’s why it’s so important that everyone in your organization is on board with both the processes and goals of transformation.

Ultimately, fostering positive cultural shifts among your people is the best way — and, realistically, the only way — to ensure that your digital transformation goals can be achieved. Because, in the end, digital transformation is all about your people; a journey begun for your people and achieved by your people.

Hitachi’s Social Innovation imperative is all about unlocking value for society through the power of technology and people. For more tips about getting ahead by thinking ahead, visit our Social Innovation page.

John Brinegar, Director, IoT Solution Architecture

John Brinegar
Director, IoT Solution Architecture, Hitachi Vantara

John Brinegar leads the Solution Architecture team at Hitachi Vantara, and has been leading IIoT projects at Hitachi customer sites for eight years. In addition, Mr. Brinegar led the architecture, development, and launch of Lumada Manufacturing Insights, an analytics platform for optimizing performance, maintenance and quality operations. He has extensive background deploying analytics systems into a variety of manufacturing sub-verticals, including electronics, pharma/biotech, metals, automotive, and others, along with IIoT software development and integration in telecommunications, health care, and enterprise markets.

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David R. Brousell, Co-Founder, Vice President and Executive Director Manufacturing Leadership Council

David R. Brousell
Co-Founder, Vice President and Executive Director Manufacturing Leadership Council

David R. Brousell is the Co-Founder, Vice President and Executive Director of the Manufacturing Leadership Council, the digital manufacturing arm of the National Association of Manufacturing, the largest association of manufacturers in the United States.

In his role as head of the MLC, Brousell sets the strategic direction of the organization and oversees day-to-day activities across the MLC’s portfolio of live and virtual events and thought-leadership content generation. Brousell is a member of the NAM Leadership Team and is also a member of the MLC’s Board of Governors. In his more than 40-year career, Brousell has served in numerous leadership positions in companies large and small.

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Errol Gardner, Norman Lonergan, Liz Fealy, “How transformations with humans at the center can double your success,” EY, June 24, 2022, https://www.ey.com/en_gl/consulting/how-transformations-with-humans-at-the-center-can-double-your-success