DIGITAL REFINEMENT: C-LEVEL EXECUTIVES HONE THEIR TRANSFORMATION SKILLS DEFINING A DIGITAL CULTURE
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1 DIGITAL REFINEMENT: C-LEVEL EXECUTIVES HONE THEIR TRANSFORMATION SKILLS DEFINING A DIGITAL CULTURE Sponsored by:
2 DEFINING A DIGITAL CULTURE Most companies today have undergone some form of digital transformation from digitising data, to using technology to improve processes, to creating online customer channels and are now working through cycles of digital refinement. This process of refinement requires companies to be agile and flexible to keep up with the everchanging marketplace. Change is not easy. When an organisation has to change, everything has to fall in place. It s not just the technology, you are changing the way the organisation works. Ashishkumar Chauhan, managing director and CEO, Bombay Stock Exchange These qualities also require a digital culture to be embedded in the very foundations of a company. The absence of a digital culture can add friction to refinement strategies that need adaptability and cooperation. A strong digital culture, on the other hand, can help companies accelerate change and leapfrog competitors in the market. However, many companies are challenged to both define and cultivate a digital culture that helps them succeed. According to a recent study by the Capgemini Digital Transformation Institute, 62% of respondents surveyed across 340 organisations cited cultural issues as the largest hurdle to digital transformation. 1 This was the starting point at which Ashishkumar Chauhan, managing director and CEO of the Bombay Stock Exchange (BSE), began refining his approach to the second digital transformation of the company. Having already moved ahead of its competitors by successfully completing a first digital transformation when it went screen-based in 1995, the BSE was concerned that competitors were following suit and competing for market share. To stay ahead, the BSE had to consider a second major digital transformation move. For us, changing the technology from old to new was a completely novel experience because not many organisations in the world change their technology. It s to do with the way all the organisations, especially the large organisations, create their technologies. They become very complex over a period, several hundred applications across literally thousands of cities. If you re going to change something, you need to change it in all the places. To overcome the hurdle of size and organisational inertia, Mr Chauhan suggests digitisation needs to become a way of life at an organisation. Change is not easy. When an organisation has to change, everything has to fall in place. It s not just the technology, you are changing the way the organisation works. For Mr Chauhan, a successful digital transformation is built upon two pillars: transparency and vision. Transparency allows for open communication and collaboration. Vision allows for stamina to undergo and overcome change. There will be moments of failure but if the team knows you have a goal and you re actually seeing further ahead, they will come on that change journey. 1 com/resource-file-access/resource/ pdf/dti_digitalculture_report.pdf Steven Barnett, president and CEO of AIG in Korea, also recently led his organisation through a digital transformation; he says that a digital culture is also aware of the 1
3 complex emotions around change. It s really about being very sensitive to people s expectations, their belief that this is all going to fail or that when we go live, nirvana is going to be achieved. According to Mr Barnett, the effort to change one s digital culture can yield long-term dividends beyond just the success of new technology implementation. It s had a very marked effect on our company s culture and a vision we now have as a company. It is also necessary. Refining culture is constant, says Mr Barnett. Change is constant. Fostering change in an organisation Fostering cultural change in an organisation can be a daunting task, best set by a clear starting point. For Tony Graham, head of product and technology at the banking and financial services group at Macquarie, this began with a top-down strategy to speed up Macquarie s pace of innovation. The catalyst for change at Macquarie comes from the awareness that it s not just competing against other banks but also best-of-breed digital experiences such as Netflix, Amazon and Facebook, says Mr Graham. Communicating the rationale in a relevant way makes embracing change a business imperative and motivates teams. We have to make sure everyone understands the why, what and where, he adds. Mr Chauhan says he also started the BSE s second major digital transformation by making the case for digital change compelling to his team. We slowly made people aware of how comparatively bad we had become and the subsequent market share loss it was about telling people the real story and making every employee aware of our journey and reputation. As the journey through change evolves and progresses, leaders have to maintain this level of clarity and purpose. Older employees had their own ideas as to whether to change or not so we had to take people along on the journey and there were several negotiations. What happens is people slowly begin to understand change is here to stay, says Mr Chauhan. Mr Graham says he has enlisted guidance from outside experts and consultants to help him at Macquarie. We took a lot of advice from other companies and invested a lot in our coaching capabilities as well as going out and hiring a number of experts into the business, he says. Bringing in the external expertise, combined with our existing team s good corporate memory and solid coaching, has really worked. There is a tipping point to look forward to though, after which, the journey through change can start to accelerate. Mr Chauhan says the key to getting to that point is 2
4 appealing to individuals ability to do things right and start winning. Once you start winning you can see people want to do more small wins motivate people. It s an incremental process. Strengthening a digital culture There is no finite end-point for a digital culture s development. As technologies continue to evolve, so will the way people work with and use them. Having this expectation, says Mr Barnett, is part of a successful digital culture. We should always be preparing for change and readying ourselves for future change. We must do that to stay relevant, he says. Once a digital culture is set into motion, it can reinforce the need for constant digital refinements and transformations and drive future innovations. Our work has created much better engagement, much better alignment, and reduced the silo nature that can exist in companies around the world, says Mr Barnett. This is a constant now what should we do next, and do regularly on a quarterly basis. We should always be preparing for change and readying ourselves for future change. We must do that to stay relevant. Steven Barnett, President and CEO, AIG Korea Many strategies exist to continue the positive momentum in a digital culture. Mr Graham cites DevOps as part of Macquarie s transformation success. DevOps is a methodology that combines software and development operations to emphasise open communication and collaboration between developers and business users. It is a framework designed to bridge the gap between technology expertise and functional needs. Mr Chauhan, who has also incorporated DevOps into parts of the BSE, chooses to strengthen his culture with a different strategy. He continues to evolve the company s vision and transformation story so all employees understand they re now working at the cutting edge of technology, but need to continue refining their digital transformation to remain industry leaders. Every organisation must know its purpose, says Mr Chauhan. We are at a stage where every employee is proud of our heritage and technological capabilities What we re doing is creating a nation-building story, a job creation story as a group, and every employee counts in this journey for India. Every organisation must know its purpose. Ashishkumar Chauhan, managing director and CEO, Bombay Stock Exchange 3
5 ABOUT THE RESEARCH In August 2017, the EIU conducted a research programme on digital refinement, sponsored by Red Hat and Intel. The study included interviews with six business technology leaders in India, Malaysia, Korea, Singapore and Australia, focusing on their experiences in driving digital refinements within their organisations. The research explored three pillars: analysing your value chain, choosing the right technology partner, and defining a digital culture. We would like to thank the following individuals who lent their time and perspectives. They are in order of their surnames: Steven Barnett, president and CEO of AIG Korea Ashishkumar Chauhan, managing director and CEO of the Bombay Stock Exchange Carly Cummings, CIO of Linfox International Group Michael Gorriz, group CIO at Standard Chartered Tony Graham, head of product and technology at the banking and financial services group at Macquarie Fazil Ibrahim, CIO of Tenaga Nasional Berhad While every effort has been taken to verify the accuracy of this information, The Economist Intelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report. 4
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