Many of the companies will not survive the next five years if they do not master the digital transformation. In her guest article, Cornelia Villa explains how digital transformation can really work in practice, which corporate culture is necessary as a basis and which tools help.
Digital transformation is the focus topic in business – it is a serious challenge for companies. The consulting firm IDC calculates $6.8 trillion in investments worldwide for digital transformation between 2020 and 2023.
In addition to a clear strategy, commitment from management and the right employees, the success of digital transformation depends above all on an agile corporate culture. The economist Peter Drucker said: “culture eats strategy for breakfast” and a BCG study from 2018 shows that 90 percent of companies that focus on corporate culture have carried out a successful digital transformation. In comparison, only 17 percent of companies without a focus on culture were successful. The right corporate culture is also a decisive success factor in recruiting in times of a shortage of skilled workers.
A digital environment is changing rapidly – due to growing customer needs, changing competitive environments, new technologies or legislation – and therefore requires agile organizations that can quickly adapt to the new circumstances and make quick decisions.
Cornelia Villa is Chief Marketing Officer of MEDWING, Europe’s leading job matching and careers consultancy. In the years before that, as managing director at XING, she was responsible for the entire B2C business and sales as well as the areas of B2C marketing, analytics and user care.
I’ve been working and leading within digital cultures for a decade – and it’s a balancing act. It requires a digital mindset, a lot of flexibility and a wide range of skills from managers and employees. In addition, as a manager, you also have to use the right tools and processes to anchor the changed behavior in the organization. Digital corporate cultures of successful companies show the following three core characteristics:
A digital culture puts customers first. In practice, this means being close to the customers, listening and understanding their needs. The trick is to translate this data and information into offers and products in order to create added value for the customer.
For customer-centric product development, I recommend CustomerJourney Maps to identify potential for improvement in the customer experience and the Amazon Future Press Release method to define before the start of development which customer problems the new product solves and what marketable benefits it provides.
As a manager, you have to constantly weigh up the interests of the company and the interests of customers. In the short term, there can be conflicting goals, as can be seen in the example of Netflix, a model digital company. After disappointing quarterly figures, management is considering abolishing account sharing between households (customer interest) in order to increase sales (company interest).
The basis for experiments is a data-driven testing culture. This means that an environment must be created in which curiosity is encouraged, data counts more than opinions and every employee can and is allowed to carry out experiments. This requires the right technical requirements, but also experts who ensure correct implementation and give training to colleagues. In such a testing culture, leaders must accept the possibility that they are wrong.
I was absolutely sure of the result in a series of tests. But I was wrong, accepted the result and then made decisions based on test data and not my opinion. In a testing culture, as a leader, you have to put your ego aside.
Agile organizations and leadership focus on empowerment and collaboration. Here delegation is more important than control, cooperation is valued more than individual efforts. The Engagement Index from the market research institute Gallup shows that the degree of employee retention and company success are closely linked. According to Gallup, only 17 percent of employees in Germany feel emotionally tied to their employer – and that largely depends on the manager and their leadership style. Research by neuroeconomist Paul J. Zak shows that trust matters most – employees at high-trust organizations report 74 percent less stress, 106 percent more energy, 50 percent higher productivity, and 76 percent more loyalty.
As a manager, I had to redefine the topic of control for myself and learn empowerment through trust. Tools such as OKRs (Objectives and Key Results) help to implement empowerment in the overall organization. The organization works together effectively and efficiently to implement the vision, strategy and planning by enabling teams to define key results, coordinate them cross-functionally and be agile through the quarterly cycle.
Digital transformation is challenging, but the end result – a digital culture – is vital for companies to survive, as demonstrated above. My former employer and I managed to implement a product relaunch very successfully within six months with the participation of dozens of teams through agile working methods, empowerment of teams and consistent customer focus. I have experienced different corporate cultures in my career, but the digital culture is the most successful.
The Mission Female business network, founded by Frederike Probert, is actively committed to more female power in business, society, media, culture, sports and politics. It unites successful women across all industries with the aim of making further professional progress together.
