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How to adapt your culture to the digital world

Michael Kidner 2

If you want continued success in our digitally driven age, your company’s culture needs some close scrutiny. But it’s up to you to take a strong lead rather than hold out for an organic organisational shift, write Julie Goran, Laura LaBerge and Ramesh Srinivasan, for McKinsey Quarterly.

While studying the results of a recent McKinsey survey of global executives, they identified three common and enduring obstacles that need addressing if you want your business to thrive in the fast-moving contemporary marketplace:

  • An aversion to risk and a fear of failure – for both yourself and your teams;
  • An established silo mentality among your departmental teams; and
  • An increasing lack of insight into what your customers really want.

These can all seriously affect your company’s future at a time when technology is making innovative investment opportunities, blurring departmental boundaries, and speedy response to customer demands is the norm.


If you regularly steer away from risk, then you’re likely to be underinvesting in critical areas of your company. The knock-on effect of that can be failure to react quickly enough to what your customers want – which is changing all the time. This is exacerbated when narrowly defined and segregated internal units don’t communicate information that could be beneficial to other areas of the company.

Goran, LaBerge and Srinivasan say that assessing and reshaping these three deep-rooted stumbling blocks works best when tackled from the top – boldly, decisively, and quickly:

“This includes changing structural and tactical elements in an organisation that run counter to the culture change they are trying to achieve.”

They advocate a broad and proactive approach to overcome the cultural obstacles that – as their research confirms – are linked to poor performance.


It’s vital to experiment and be flexible around new investment but you must also be aware that with digital advances the stakes are high when it comes to transparency, fragile competitive edge and the potential cost of failure.

1) Lead by example. Think more like a venture capitalist. Make it clear that you accept the benefits of learning from your own mistakes.

2) Get your teams on side. Encourage a company-wide mentality of risk and innovation and demonstrate trust in your people. Let go of some key decision-making, but be careful to delegate only to team members who have the appropriate skills, knowledge and attitude.

3) Set adventurous goals and make strong decisions. You are still in the driving seat, particularly when steering major diversions in direction or fast redistribution of resources.

One Irish bank AIB “decided customers should be able to open an account in under ten minutes (90 percent faster than the norm prevailing at the time). AIB invested to achieve this goal and saw a 25 percent lift in accounts opened, along with a 20 percent drop in costs.”


Digital encourages a multidisciplinary approach that increasingly casts silo working as an outmoded model. Initiatives need to be embraced universally. So how can you help ease that transition?

1) Share the responsibility. Counteract the idea that specific problems or issues are “someone else’s job” and encourage collaboration by creating teams that are deployed flexibly.

2) Rotate your executives between the silo areas and other units.

3) Cut through red tape. Remove the barriers and bureaucracy that discourage information-sharing and collaboration, and build new mechanisms.


Digital technology has brought companies closer than ever to their customers. While this is what we all say we want, it comes with big expectations.

1) Meet their digital expectations. Now that customers can communicate directly with us, they expect easy access to information, smooth and efficient service, and an instant response to enquiries.

Your firm must provide all of this if you want to survive. Customer input can be lifesaving when you are contemplating a particular risk or change, and customers can tell you whether they want your new product before you even bring it to the marketplace.

2) Use digital tools and data wisely to help create a customer-centric culture. Goran, LaBerge and Srinivasan refer to a “virtuous cycle” that reinforces it:

“At its best, customer-centricity extends far beyond marketing and product design to become a unifying cultural element that drives all core decisions across all areas of the business.”

If you want your company to embrace a digitally-directed culture, it clearly won’t happen overnight, but you can get on the right track immediately by tackling the three key elements of risk aversion, silo mindset and customer focus. It’s the way forward.

Source Article: Culture For A Digital Age
Author(s): Julie Goran, Laura LaBerge and Ramesh Srinivasan
Publisher: McKinsey Quarterly