As the world recovers from the COVID-19 pandemic, business leaders must set up their companies to be successful in a very different world. The pandemic sped up the adoption of digital technologies, the development of new business models, and the implementation of new ways of working, all of which affect every industry. Most companies are now going through at least one of these types of change. Businesses that don’t, either because they didn’t pay attention to the signs or because they didn’t change fast enough, risk going out of business.
Most executives know that change is necessary, but far fewer understand the important link between business change and culture change. Companies can’t get the most out of digital transformation, adopt new business models, or start using new ways of working if they don’t support changes in organizational norms and behaviors. A recent study by Boston Consulting Group found that companies that focused on culture were five times more likely to get breakthrough results from their digital transformation efforts than those that didn’t.
Companies that haven’t started their transformation journeys yet can also benefit from focusing on culture change. Business and IT Alignment that can change gives a foundation for change. It also helps organizations deal with cultural fragmentation caused by acquisitions that weren’t fully integrated or by years of growth in different places.
Leaders also need to know that Business and IT Alignment is always changing and that their organizations will change even if they don’t do anything to steer it. The values, thoughts, and actions of employees have changed quickly in the past year. These changes might not be what your organization needs, or changes that are needed might not be happening fast enough.
Because of this, leaders need to take action now to build the right Business and IT Alignment and avoid having to change the culture at the same time as a large-scale organizational change.
What is Cultural Business and IT Alignment in the Context of an Organization?
Culture is a shared set of values (what we care about), beliefs (what we think is true), and rules for how to act (how we do things). Cultures exist to help people work together, come to the same conclusions, make things more predictable, and record what works and what doesn’t in an organization.
We all know that a strong Business and IT Alignment is important for a company’s health and ability to compete. “Culture eats strategy for breakfast,” which is a famous quote from Peter Drucker, says that culture is more important than strategy. The best strategy and organizational development plans fall apart if the company has the wrong culture. Even though leaders have been told many times that people and culture are the most important factors in determining success or failure, they haven’t always accepted that they need to be proactive in building the kind of culture their strategies need to work.
It can be hard for leaders to get a close look at Business and IT Alignment. Senior leaders may become too used to their own ideas about culture. Here, newcomers and front-line employees can help find cultural beliefs and behaviors that are deeply woven into the organization’s social fabric.
How Does the Cultural Business and IT Alignment Need to Change to Help Change?
Since every company is different, leaders must adapt to the unique situations in which their organizations work. But we also see a lot of consistency in the parts of culture that are needed to get the most out of organizational transformations, whether they are digital or based on new business models or ways of working.
In a global environment that is becoming more competitive and driven by IT, organizational Business and IT Alignment is still seen as one of the most important factors for an organization’s success. The relationship between business and IT makes the nature of organizational culture even more complicated. This is because organizational culture affects every part of the organization.
Business-IT alignment is still complex for many organizations, even though it is always at the top of the agendas of both C-suite executives and Finance and IT leaders. Business and IT need to understand each other and be on the same page strategically. This is where IT governance comes in. IT governance is a part of corporate governance that makes sure IT supports and grows the organization’s strategies and goals. This includes making sure IT is aligned to help the business make money. It also helps set priorities and divide up the resources that are needed. But traditionally, IT has mostly stayed in a functional role that is subordinate to the business and focused on strategy.
Despite the clear benefits of business-IT alignment, many organizations still have trouble with the cultural divide between IT and business, which leads to a “us vs. them” mentality and decisions and strategies that aren’t made at the same time. Because of this, the relationship between business and IT could still be tense. In addition to a biased view of IT, these conflicts are caused by the different views of the people who use information systems, which are often at odds with each other. By shaping and promoting shared values in business and IT, managers can help reduce conflicts. Such values would be part of an organization’s shared culture, which would make it easier for business and IT to work together. But the business-IT partnership also depends on how business-minded the IT department is, how much it knows about management, and how valuable IT is seen to be. So, a strong focus on technology in IT hurts the relationship between business and IT, even if only in a small way.
Organizational culture is multidimensional, and there’s not one right away to approach change. How should you go about making changes to your culture if it needs to? First, you have to realize that changing a culture is hard work. It’s hard enough to change your own habits, let alone the habits of tens of thousands of workers. Many companies have had the same cultural norms for many years, or even decades. Some people might like change, but others might think that the way things are done now is a big part of why the organization is doing well.
Here are some principles you can choose to follow to manage Business and IT Alignment changes:
Recognize that you can’t pass off responsibility for culture to someone else. Senior executives must be the faces and voices of culture change. Change efforts are likely to fail if the top leaders don’t support the desired culture change in a real and honest way. Senior leadership must align, balance, empower, articulate, communicate, and show their own growth and development to encourage even the most subtle cultural shifts.
Start by asking “why.” Change efforts can be seriously hampered if important people aren’t involved and don’t understand why change is needed. People always become more anxious, cynical, and resistant to change when they don’t understand why it’s important. Even if you did a great job of explaining why digital transformation is needed, for example, you still need to give a reason for the (often most difficult) supporting culture changes and how they will affect individuals and teams.
Define the values and behaviors of the target culture. Creating a clear picture of how you want things to be in the future is an important first step in changing a culture. The desired culture must be defined in a way that is clear but also flexible enough to shape and affect the performance of an organization from the front lines to the executive suite and in all units and locations. Start by defining the front-line culture you want to achieve, and then work backwards to find the other forces (like leadership and organizational systems and processes) that will support and strengthen it. When you do this, be sure to ask the people on the front lines what they value and how they think the culture affects their ability to do their best work.
Get involved and listen. When you include more people, you get acceptance, if not full commitment. People tend to feel like they own things they helped make. To reach every employee, you need networks of culture champions who are passionate and highly engaged. These employee networks are made up of front-line managers and workers who want the change to happen.
Build a bridge to the culture you want to see in the future. No organization wants to ignore the parts of its culture that made it successful in the first place. The key is to think of change as building a bridge between the past and the future by figuring out which parts of the current culture should be kept and used. The strengths of the legacy culture that will last must be acknowledged and incorporated into the culture of the future.
Build a culture road map. For the cultural changes that are wanted to happen, the future path must be shown visually, and every function, division, and field must be represented across the enterprise. Communication that goes on all the time is a key enabler. Wide-ranging communication plans that let people at every level of an organization hear, understand, and talk about the cultural effects of their roles can also help bring about cultural shifts.
In all organizational systems, reinforce the culture you want. For success to happen, there must be a strong focus on changing behavior. It’s not enough for leaders to try to change people’s attitudes or come up with and share a set of values. They also need to make sure that incentives reinforce the behaviors they want to see. So, to support the culture that is wanted, all key systems must be changed to support the behaviors. All of the important people processes, like hiring, evaluating, managing performance, and developing, must be carefully looked at and changed over time to create the culture that is wanted.
Reward new culture quickly. It’s important to give managers and leaders the power to immediately notice and reward people who show up in a different way. Leaders must pay attention when people break down barriers, take risks to work together in new ways, and start to live the culture they want. Encouragement of creative, personal, and just-in-time recognition that employees value speeds up the new behaviors. If these things are done over and over again, people will quickly start to believe that a new culture is “real” and that “the way we’ve always done things” is no longer how we will do things.