Corporate Culture and the Impact of Digital Transformation

January 5, 2018
Will Kaye
Managing Director

There are many definitions of corporate culture and every executive..

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There are many definitions of corporate culture and every executive has a slightly different take on just what the term means and how best to implement its ideas. Some define corporate culture as the way things are done. Others, as the collective attitudes of an organisation. While still others see the corporate culture as a reflection of company values. All of these definitions are correct to some degree and no matter how corporate culture is defined there is no denying that it is an essential element of business success.

This article will provide an introductory analysis of the ways in which Digital Transformation (broken down into People, Processes and Technology) are impacting the business world. More specifically, I will focus on how these three factors are changing corporate culture and how successful companies are adapting to these changes.

How People Are Changing the Corporate Culture

From the smallest startup to the largest multinational corporation, in the end, businesses are people. The men and women who work in a business world have always had a profound impact on the corporate culture, and the higher up the ladder they go, the greater their impact.

Throughout the years, the business culture has been changed by people in many different ways, but one of the biggest impacts has been in how future executives are trained. Management theory has evolved enormously over the decades, undergoing scores of transformations. With every new change in management approach and the training of future executives, there has been a shift in corporate culture.

Executives who came of age in the days of top-down management will obviously have a different outlook than their peers who were trained primarily in cooperative and bottom-up techniques. The corporate culture will reflect that difference in attitude, and many studies have revealed those differences in management style and approach.

While many old-line businesses are still operating in the traditional top-down style of old, their younger counterparts often see things much differently. This shift in corporate culture can clearly be seen in Silicon Valley, where workers are often organised into teams and the success of the organisation depends on cooperation and cohesion. No matter what the future may hold, one thing is clear – people will continue to have a significant impact on corporate culture for many decades to come.

New Processes and The Impact on Corporate Culture

The impact of operations on the corporate culture can be just as profound as the changes brought about by people. The men and women in the corner offices may run the corporations, but it is the processes that get things done.

Systems and procedures have changed enormously over the past couple of decades, transforming the modern workplace, changing product manufacturing processes, and altering daily life for the workers in the office or on the factory floor.

Just consider the impact of automation and robotics on the modern workplace for just one example of how processes are shifting and changing corporate culture. Steel plants that once took tens of thousands of workers to keep running can now get by with just a few thousand employees and their robotic companions. This shift in process has created a profound change in corporate culture, transforming the factory from the size of a small city to a cohesive and much more manageable group.

Automation has also created substantial shifts in corporate culture for many office workers. The widespread availability of automated answering systems has already displaced most receptionist, and it has transformed the job for those few left behind.

That same kind of automation has also changed the lives of salespeople, customer service representatives and many others in the office environment. Those shifts have freed many workers from the drudgery of their daily working lives, but it has also created new levels of uncertainty concerning job security and duties.

As a result of these changes, corporate culture has undergone some remarkable shifts, as front-line managers struggle to keep up with the new technology and train their workers for what is to come. Depending on the company in question, executives and managers may change the way they organise their teams, upsize or downsize their operations or continually reassess the effect of automation and artificial intelligence in the modern workplace.

Advances in Technology and Their Profound Impact on Corporate Culture

Advances in technology and the increasingly rapid pace of those advances has also had a substantial impact on the corporate culture. These technological advances take many forms, but they all have one thing in common.

Every change in technology, from robotics and automation to the emergence of the global marketplace, changes the corporate culture. Those changes can go both ways, however, and those shifts are already becoming apparent, with countless examples of the transformative power of technology and its sometimes-uncertain impact on the corporate culture.

Outsourcing is a good case in point. Technological advances, from the increasing reliability of global computer networks to improvements in education, made outsourcing a real option for companies in the United States and elsewhere. For some businesses, however, the advantages of outsourcing were not as significant as initially thought. As a result, many companies are bringing back their call centers and manufacturing operations, taking advantage of new advances in technology in the process.

Telecommuting is another example of how technology changed the corporate culture and then changed it back. As computers became faster and more reliable and telephone service advanced, many companies saw the wisdom in telecommuting and establishing an increasingly remote workforce. Many of those corporate leaders even built their corporate cultures around such workers, creating far-flung teams independent of time zones and international borders.

As technology has continued to improve, many businesses are rethinking the advantages of telecommuting and home-based workers. Companies like Best Buy and Yahoo! are increasingly calling their work-at-home employees back to the office, creating yet another shift in the corporate culture and paving the way toward a more office-centric workplace.

The reasons for the change are numerous, but many center around teamwork, cooperation and productivity. Some business executives worry that telecommuters may not be as loyal as their counterparts at the office, or that they will not be tied into the corporate culture the same way. Others have found that working from home is damaging to the cooperation the business wants to see. Still others conclude that home-based workers are not as productive, or as creative, as their colleagues in the cubicles.

No matter what the reasons, the shifting attitudes toward telecommuting is emblematic of a change in the corporate culture. While many successful businesses still rely on home-based workers, others are rethinking this reliance and looking for a new way to get work done.

Corporate culture has an outsized impact on everything a company does, from employee recruitment and retention to hiring practices and productivity. Whether the business in question is a busy factory, a light industrial facility or a government office, the impact of corporate culture cannot be overstated. Simply put, corporate culture touches every element of the organisation in question, both tangible and intangible.

As technology advances, with increases in employee mobility and the increasing use of freelancers and contingent workers, the corporate culture will continue to shift. As a result, many organisations have placed an increased emphasis on the factors that impact corporate culture, most notably the people, processes and technology that keep the business world running.