# How to stop your digital transformation from failing
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-01-29
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Why Company Culture is the Key to Successful Digital
Meta Description: Discover how poor company culture is the main culprit behind digital transformation failures and why addressing this is crucial for success.
URL: https://financedigest.com/stop-digital-transformation-failinghtml

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By **Thomas Davies**, CEO of Temporall

It’s no secret that the business and financial world is changing faster than ever. Increasing innovation, new technologies and political upheaval around the world – whether it’s due to Brexit, US trade policies or China’s economic slowdown – mean it is increasingly hard to know what a market or competitor landscape will look like in just a couple of years’ time.

This means traditional [business strategy](https://www.financedigest.com/fortified-dairy-products-market-outlook-cover-new-business-strategy-with-upcoming-opportunity-2022-to-2032.html "Fortified Dairy Products Market Outlook Cover New Business Strategy with Upcoming Opportunity 2022 to 2032") is in crisis. More and more companies are looking to [digital transformation projects to help them to keep up in today’s](https://www.financedigest.com/evolution-not-revolution-digital-transformation-today.html "EVOLUTION, NOT REVOLUTION: Digital transformation today") fast-paced, disruptive world.

These projects are designed to make companies more adaptable, more aligned, more innovative and more agile, and there’s no doubt that the [businesses of the future will need](https://www.financedigest.com/pstn-isdn-switch-off-what-businesses-need-to-know.html "PSTN/ISDN switch-off: what businesses need to know ") these qualities to survive. But the unfortunate reality is that 70% of all digital transformation projects fail, costing an estimated [US$900 billion in 2018](https://www.forbes.com/sites/forbestechcouncil/2018/03/13/why-digital-transformations-fail-closing-the-900-billion-hole-in-enterprise-strategy/#3f4fe7697b8b) alone. Why?

**Look to your company culture**

![Thomas Davies](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/thomas-450x450-1736840132816-compressed.jpg)

Thomas Davies

[Digital transformations may have the perfect theoretical strategy](https://www.financedigest.com/why-financial-services-companies-should-consider-rfps-in-their-digital-transformation-strategies.html "Why financial services companies should consider RFPs in their digital transformation strategies"), but if this isn’t implemented well throughout the organisation, make no mistake – it will fail. [Company culture is the key](https://www.financedigest.com/key-ingredients-to-formulate-and-communicate-a-successful-company-ethos.html "Key ingredients to formulate and communicate a successful company ethos"). [Harvard Business Review](https://hbr.org/2018/01/the-culture-factor) thinks that “culture eats strategy for breakfast” – and it’s right.

[Successful digital transformation](https://www.financedigest.com/why-digital-transformation-in-finance-is-crucial-for-post-lockdown-success.html "Why digital transformation in finance is crucial for post lockdown success") must include recognising culture as a strategy. Research by [Temporall via Think with Google](https://temporall.com/wp-content/uploads/2018/11/TheStrategicSecret_Temporall_final.pdf) shows a strong correlation between having a deep-rooted, clearly communicated culture and business growth: the 7% companies who had the strongest cultures enjoyed huge average revenue growth of 46% every year.

A study by [McKinsey](https://www.mckinsey.com/business-functions/mckinsey-implementation/our-insights/how-the-implementation-of-organizational-change-is-evolving) in 2018 showed that executives know their team’s response to tech changes can derail transformation. Leaders identified “cultural and behavioural challenges” as the [top difficulty in meeting digital priorities](https://www.financedigest.com/why-intelligent-automation-should-be-a-top-priority-for-enterprises-in-2022.html "Why Intelligent Automation should be a top priority for enterprises in 2022"). So why isn’t it being addressed?

**Untangling the web: what culture really means**

Culture may be [crucial to business success](https://www.financedigest.com/why-seo-is-crucial-for-business-success-post-pandemic.html "Why SEO is crucial for business success post-pandemic") generally, and digital transformation in particular, but it is commonly misunderstood and neglected by leaders and employees alike. And if executives don’t understand clearly what culture is, let alone how to measure it, then it will be impossible to change.

Many wrongly believe culture is restricted to inclusivity or that it is a wooly, intangible idea about employee engagement. They couldn’t be further from the truth. At its most basic, culture is “the way we do things around here”. It’s the approach people take to get work done within that particular organisation. There are four interlinked aspects which determine what this approach is:

1. **Values**: the broad grounding principles that the [company believes are important](https://www.financedigest.com/australian-state-balks-at-energy-companys-request-for-help-with-lng-import-terminal.html "Australian state balks at energy company’s request for help with LNG import terminal")
2. **Behaviour**: how values are expressed in day-to-day actions
3. **Process**: how behaviours are standardised throughout the organisation
4. **Systems**: how processes are made repeatable, [manageable and integrated](https://www.financedigest.com/power-management-integrated-circuit-pmic-market-research-report-2022-global-forecast-till-2028.html "Power Management Integrated Circuit (PMIC) Market Research Report 2022 – Global Forecast till 2028")

When these elements are well-considered, correct and communicated, they [form a self-reinforcing and repeatable company](https://www.financedigest.com/microsoft-videogame-testers-form-companys-first-u-s-union.html "Microsoft videogame testers form company’s first U.S. union") culture that can weather many storms. Successful [digital transformation](https://www.financedigest.com/how-a-zero-trust-architecture-can-help-accelerate-digital-transformation-for-financial-institutions-without-sacrificing-regulatory-compliance.html "How a zero trust architecture can help accelerate digital transformation for financial institutions without sacrificing regulatory compliance") is not just the change of day-to-day systems, it’s ingraining the behaviour, process and values into those systematic changes.

**Cultural insensitivity**

Poor company culture is the main reason why [digital transformations](https://www.financedigest.com/how-to-fulfil-the-digital-transformation-requirement-in-banking.html "How to fulfil the Digital Transformation Requirement in Banking") fail, and many leaders even know that this is the case. But when it comes to their own business, there is a gap between what leaders think they do and how employees see it. Outside of the boardroom, many staff members think that there are big deficiencies in most leaders’ understanding, awareness and communication of the company’s culture.

More than [one in three employees](https://temporall.com/wp-content/uploads/2018/11/TheStrategicSecret_Temporall_final.pdf) say that their company does not have a strong mission and purpose that’s clearly communicated by their leadership. Even more worryingly, less than a [quarter strongly agree that their leaders are aware of the impact](https://www.financedigest.com/wework-rival-iwg-quarterly-revenue-dips-on-prolonged-pandemic-impact.html "WeWork rival IWG quarterly revenue dips on prolonged pandemic impact") of their behaviour on the company.

It’s clear: leaders think they are doing a better job of managing culture than they really are.

[**Step up to save your digital transformation**](https://www.financedigest.com/open-finance-the-next-step-for-global-digital-transformation.html "Open finance – the next step for global digital transformation")

In disruptive times, [digital transformation is no longer optional if businesses](https://www.financedigest.com/automating-business-processes-is-essential-to-digital-transformation.html "Automating business processes is essential to digital transformation") want to survive, and culture is often the make-or-break factor in determining whether it is successful or not. So how can you make sure your transformation is in the 30% that succeed?

1. Use Culture Analytics to [track and improve](https://www.financedigest.com/how-can-call-tracking-improve-your-business.html "How can call tracking improve your business?") your company culture. To know if your company culture is [ready to deal with radical change](https://www.financedigest.com/digital-marketing-for-finance-and-insurance-firms-is-changing-are-you-ready.html "Digital marketing for finance and insurance firms is changing — Are you ready?"), you need to measure it. Look for the weak spots, make improvements and track the positive and negative results.
2. Integrate your [tech department so that they are in-step with the company’s](https://www.financedigest.com/analysis-u-s-companies-spend-billions-on-stay-at-home-tech-boding-ill-for-office-properties.html "Analysis-U.S. companies spend billions on stay-at-home tech, boding ill for office properties") broader culture. Too often, technology departments are detached from the rest of the organisation. Siloes cause efficiency problems at the best of times, but when technology departments are tasked with [driving change](https://www.financedigest.com/the-future-of-energy-tech-and-data-are-driving-change-fast.html "The Future of Energy: Tech and Data are Driving Change, Fast") it’s vital they are engaged and on the same page as everyone else.
3. Keep communicating: make sure your staff know what culture really means, and reinforce company values clearly and regularly. And remember that communication goes two ways: listening to your employees will give you invaluable insights about what is [working well](https://www.financedigest.com/biden-says-he-is-doing-well-working-after-testing-positive-for-covid.html "Biden says he is ‘doing well,’ working after testing positive for COVID") and what isn’t.

To survive [digital transformation and drive sustainable](https://www.financedigest.com/the-root-of-all-good-sustainabilitys-role-in-digital-transformation.html "The Root of All Good: Sustainability’s role in Digital Transformation") growth, business leaders need to get to grips with how to measure, adapt and maximise their company culture. In the era of digitization, where companies need to embrace [collaborative innovation](https://www.financedigest.com/how-innovation-and-collaboration-are-evolving-the-fight-against-financial-crime.html "How innovation and collaboration are evolving the fight against financial crime") and constantly update how they operate, those who fail to do this simply won’t make it.


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