The digital transformation of companies has significantly reshaped the landscape of company culture, generally for the better, though not without some concerns. As global spending on digital transformation is projected to reach around $3.9 Trillion by 2027, companies must adapt to these new ways of operation to remain competitive in the global market. This in turn, influences the development of company culture.
Digital transformation involves the integration of digital technologies into all areas of a business, fundamentally changing how organisations operate and deliver value to customers. According to a Deloitte survey, digital transformation can generate up to a 5% increase in the companies market capitalisation. WalkMe’s 2022 Digital Adoption Report found that 67% of companies are under extreme pressure to adopt a digital transformation. We are currently witnessing a paradigm shift towards digital transformation. Despite this, only 26% of CEOs have a future-ready strategy that includes adapting company culture to these changes.
Company culture is defined by the leadership, employee interaction and operational approaches. When digital transformation occurs, these elements interact in new ways. A report by MIT and Capgemini identifies digital company culture as fostering innovation through data-driven decision-making and collaborative practices while embracing flexibility. This ‘Digital-first culture’ is said to enhance productivity through HR technological tools.
The relationship between HR technology and company culture drives companies towards full digital transformation. Implementing digital measures within HR can increase productivity and reinforce key aspects of company culture, such as values, beliefs, and overall attitudes.
Kimberley Tyler-Smith MBA, Vice President of Strategy and Growth at Resume Worded, asserts that “HR can absolutely use tools and tech to drive meaningful cultural change in the workplace.” Technologies like organisational management and communication systems address issues such as poor communication, which has cost organisations. Holmes’ report states that in recent years poor communication has cost the organisation $37 Billion, due to employees misunderstanding roles.
Communication technologies like Microsoft Teams, Slack, and other instant messaging platforms enable all employees, whether remote or in-office, to stay updated with organisational changes. This connectivity not only facilitates good communication but also increases transparency by allowing real-time interactions between employees and senior management.
A recent Accenture report demonstrates that 86% of executives believe that due to the digital transformation of company culture more employees will enjoy increased independence and greater influence in their relationships with employers. This shift towards more empowered employees is expected to create a more dynamic and positive company culture.
However, new ways of working bring natural drawbacks. A key concern is the reduction in in-person interactions. Traditional human interactions and collaborative work, which strengthen teams, can be weakened by digitalisation, causing employees to feel isolated and less enthusiastic about duties involving real human interaction.
Maintaining company culture remotely also presents challenges. The lack of physical interaction can hinder team bonding and depersonalise relationships. A Gallup study of over 15 million employees indicated that by having a ‘best’ work buddy, they are 7 times more likely to engage in their jobs, produce higher quality work and have better well-being.
Over-reliance on technology and constant communication can cause employees to become increasingly dependent on technology. Constant connection and availability of employees creates the risk of ‘connectivity burnout’. The expectation of constant availability can cause retention issues and negatively impact productivity. Therefore, it is crucial to support a work culture that designates “Off” times allowing employees to truly unplug. Despite 79.5% of leaders believing that their organisations have a strong and positive digital company culture, only 56.7% employee’s agree, indicating more work needs to be done to combat the key issues.
Virtual social spaces, such as breakout rooms, can facilitate interactions among employees from different backgrounds and skill sets. Organising online team-building activities and social events can also enhance team cohesion.
Utilising communication platforms for virtual meetings and check-ins allows for real-time problem-solving and recognition, which can increase productivity and overall company morale.
Digital transformation can support inclusion and diversity by providing platforms for all voices to be heard, regardless of geographical location.
Virtual learning, training, and workshops enable employees to diversify their skills quickly, fostering a culture of continuous improvement.
Promoting health and wellness apps can support healthy digital company culture, ensuring employees can balance their work and personal lives effectively.
Digital transformation offers numerous opportunities to enhance company culture by leveraging data, improving communication, fostering inclusion, supporting continuous learning, and ensuring work-life balance. However, it is essential to address the potential drawbacks, such as reduced in-person interaction and connectivity burnout, to create a dynamic and positive company culture that can thrive in a digital age.
Assad founded Phase 3 in 2004 and is responsible for the strategy, growth and finances of the business.
