by Randy Pennington

Is your culture the final key to successful digital transformation?

Sep 26, 2018
Digital TransformationIT Leadership

The missing piece to successful digital transformation might not have anything to do with technology. Find out why one passage from Alibaba’s Jack Ma could be the key to creating and sustaining an organization that helps you s쳮d.

Imagine this: Your digital transformation efforts are just underway, and tangible results are starting to appear. There is still significant work to be done, and you estimate that the organization has addressed maybe 5 percent of the potential areas for improvement.

There is, however, a challenge looming over the horizon. You don’t have the internal talent needed to help you get much further than you are today. Even worse, you can’t find or afford the external talent it will take to strengthen your team. The fear that your transformation efforts will take longer than expected—or worse grind to a halt—is growing stronger by the day.

Does it make you feel better to know that you are not alone?

 “The State of Intelligent Process Automation” study released in September 2018 by Nintex found that the majority of companies are three years or less into their formal digital transformation journey. An impressive 94 percent of respondents are already seeing tangible results.

Seventy-one percent of decision makers are reporting that finding the talent they need to fill digital transformation roles difficult to fill. Almost 40 percent cited a lack of in-house talent as a key factor in the failure of their transformation efforts, and almost one-third believe training on new technology is a barrier.

The answer hidden in a letter

Jack Ma, Executive Chairman of Alibaba, announced his pending retirement on September 8, 2018. In his letter to shareholders, Ma revealed an important factor in the future success of his company and yours:

“This transition (his retirement) demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organizational excellence and a culture of talent development.”

Did you catch it? Alibaba is moving from a company that relies on individual excellence to one that is built on systems that ensure excellence and a “culture of talent development.”

I am unsure if “culture eats strategy for breakfast.” It is even questionable if Peter Drucker even made that statement. It is safe to say, however, that the culture always wins. A great strategy paired with a mediocre culture usually produces less than the desired result. On the other hand, a great culture can make a mediocre strategy much more effective.  

A culture of talent development isn’t as important in an environment where the standards and processes of operational excellence are static. It is crucial for transformation and growth.

The challenge of making talent development important

Your culture is defined by shared purpose, beliefs assumptions, performance expectations, and standards. The key word in that last sentence is “shared.”

Therein lies the first and possibly most difficult challenge—convincing Gen X and the remaining Baby Boomer managers that they should care about playing an active role in developing talent. It’s not that they don’t believe in developing new skills. Likewise, they aren’t tied to hierarchical top-down management styles.

The Gen X and Baby Boomer managers that are in the workplace today are fiercely independent. They are self-reliant, and they can view a more active role in talent development as unnecessary. The next generation should be willing and able to take responsibility for their own growth.

Like it or not, Millennials and the Gen Z cohorts in today’s workplace value organizations and leaders who will take an active interest in them and their growth. They can take care of their own development when needed. They would simply prefer a culture that makes talent development a priority. 

Here are two good reasons to make the mindset change to creating a culture of talent development.

1. The numbers don’t favor resistance

By 2020, Millennials will make up 35 percent of the global workforce and a majority in the U.S. Gen Z will already make up 24 percent of the world’s workforce. You need them more than they need you at this point. Organizations and leaders that create a great place to work have a better shot at retaining talent. More important, they are more likely to get the discretionary commitment that you want.

2. It makes a difference for your own success and the success of your company

Jack Ma of Alibaba was born in 1964, the last year of the Baby Boomer generation. It is safe to assume that he grew up with an expectation that is different than the young employees on which he is betting the company’s future.

Daniel Zhang, Alibaba’s current CEO and future Executive Chairman, believes that companies and leaders should “study the future not the past.”

The Millennial and Gen Z generations shouldn’t be defined by the worst examples of their peers. They are not entitled slackers. A report by Bloomberg states that  U.S. students spend more time working than going to class.

Yes, but how?

Trevor Outman and Grayson Lafrenz are living the challenge retaining and engaging a young workforce every day. Outman, a young Gen X’er, is founder and President of Shipware, a technology and consulting company that helps companies manage their shipping costs. Lafrenz, a Millennial, is founder and CEO of Power Digital Marketing, a company that uses digital technology to help companies build their brand. Both of these companies are predominantly filled with Millennials and Gen Z candidates joining them as they enter the workforce or begin internships. I spoke with these two leaders about what I (and hopefully you) can learn about creating a culture that develops and nurtures talent. Here are four great ideas you can adapt to your team.

Take an interest in the whole person

Outman wants everyone at Shipware to come to work because they want to be there. He strongly believes that helping his team experience fulfillment in their career, financially, and personally strengthens their relationship with the company and each other.

Lafrenz has operationalized his company’s commitment to the whole person through a process he calls “The Vital 5.” At the beginning of every year each person in the company commits the following goals to writing:

  • The amount of money you want to make this year.
  • One skill set you want to develop or master.
  • What you want your role to become in the company.
  • One big personal goal you want to achieve (such as buying a new home, improving your health, or taking a great vacation).
  • What you need from the company to support you in your goals.

Many companies ask employees to set business and even professional goals. Expanding that to include a personal goal acknowledges and honors the Millennial inclination to blend the work and non-work aspects of their lives to achieve greater balance.

Every Power Digital Marketing staff member meets with their manager quarterly to discuss progress. The meeting is held away from work over coffee or lunch, and it includes a discussion on how the individual is progressing on their personal and work-related goals.

This is a big change for managers that grew up hearing that employees should leave their personal lives at the door. It also requires an increased level of maturity from managers and supervisors to make sure that conversations remain realistic, positive, and legal.

Outman and Lafrenz, on the other hand, view it as the logical reciprocal response to an environment that asks employees to respond to clients as needed … even if that means doing so after normal business hours.

Reinforce effort and recognize contribution

Finding your “why” is now part of the work lexicon. The question is, of course, who’s “why” is most important?

Shipware’s Outman views reinforcement of effort as a tool to help his team connect the dots between their sense of purpose and the company’s. In the process, the Shipware staff are empowered to take on more responsibility which increases their skill set and value.

At Power Digital Marketing that includes showing everyone the Path to Leadership. This isn’t the proverbial “everyone can be a leader” speech or the opportunity to take on more work while you do your regular job. Posters that share all the ways you can learn and grow into a leadership role adorn the walls. Volunteering to lead a committee or project comes with real responsibility, and real compensation for taking it on.

“Millennials want to own something,” says Lafrenz. Tangible recognition of contribution encourages people to take responsibility for their own development while providing a path to reach their financial goals.

Listen and respond

Most organizations do annual employee surveys. Many also conduct regular Town Hall meetings. Imagine if you could get feedback from every person on your team every week.

Shipware utilizes a technology platform that allows the company’s leaders to receive the unfiltered truth about what their team is thinking and feeling. The service, which works with their CRM, provides the opportunity for anonymous input, and Trevor Outman says that the company receives an 85% to 90% response rate each week.

The connection to talent development is less obvious, but it still exists. Think about where you first learned to be a manager or leader. For many, those lessons were learned through watching their leaders long before any classroom experience.

Virtually every leadership development program addresses the need for open communication, the power of listening, and the advantages that come from making people feel as if they are contributing to something larger than themselves. Shipware’s leaders are modeling the behavior and performance that will make individuals and the company successful in the future.

Connect to the community

Giving and connecting to the community teaches people to grow from their own selfish interests to considering what is best for the greater good.

Millennials and Gen Z’ers believe that business can and should work to make the community better. They want to be more involved than the occasional volunteer activity or fund-raising event.  For both Shipware and Power Digital Marketing, supporting local causes through time and talent also develop leadership and teamwork skills.

Imagine what it would be like for the best and brightest talent view your organization as the place that helps them do great work. What would be different if you didn’t have to worry about finding the talent you need to achieve your transformation goals? How would you feel being able to confidently tell your business partners and leaders that your team is up for every challenge?

Arie de Gues once said, “The ability to learn faster than your competitor may be the only sustainable competitive advantage.”

A culture committed to talent development isn’t the only thing you need to ensure that your digital transformation efforts deliver the results you want, but it could be the missing piece that gives you that advantage.