How to Create a Culture That Ensures Sustained Digital Transformation

Author Date November 15, 2022 Read 8 min read

An inside-out approach to culture change within the financial services industry.

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Why do 70% of Digital Transformations fail?

The wrong cloud partner? Overly aggressive timelines? While these factors contribute to a stalled transformation effort, they are rarely the root cause. A failed digital transformation comes back to the business colloquialism, “Culture eats strategy for breakfast.”

Cultural shortcomings are the main obstacle to a successful transformation.

While there has been increased focus on creating human enablers, the culture debt in large banks often poses resistance to change, which many businesses choose to ignore. New technology does not necessarily transform businesses, but new ways of working sustained over time will.

Research shows that 70% of digital transformations fail to achieve their objectives as they struggle to integrate disruptive technologies with new processes, models, and ways of working. Sustainable culture change is fundamental to ensuring a successful digital transformation.

Culture eats strategy for breakfast.

Start culture change by putting customer-centricity first

Begin planning a sustainable digital transformation by making customer-centricity a core value of your bank’s philosophy. A customer-centric culture compels each of your employees to ask, “How will my decision benefit my customer?” and “Am I serving my customer in the best possible way?” regardless of their function or tenure. The goal is for all employees to articulate how their duties fit into the delivered value to customers.

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1. Treat culture as a product
2. Develop a strategy that ties CX with EX
3. Align Design-thinking with Agile
4. Make customer insights accessible to all
5. Don’t just buy Agile, make agility a part of your DNA
6. Measure outcomes of culture change
7. Train your workforce to be digital-first and customer-centric

How to establish a culture of customer-centricity

#1 Treat culture as a product

The way to set your bank’s product experience apart from the competition is through constant refinement based on learnings from customer usage. The same is true of culture.

Much like a product, the desired culture must be designed, integrated, launched, measured, and refined to continuously deliver value.

Design and align your bank’s culture to see where you are at now, and where you want to be

Apply coordinated changes e.g. updating job descriptions and establishing communication cadences

Anticipate the downstream impact to Agile processes and plan accordingly

Leverage the technology that’s right for your organization to achieve the desired change

Measure the progress of culture change with a defined feedback program available to all employees

Generate insights from feedback for planning future iterations, pivots and evolutions

Culture as a product can come in many forms in the real world. One of the most important aspects is to ensure communication and an openness to shifting focus. For example, if empowering product owners is part of your cultural strategy, you will need to communicate this to them through public forums while ensuring that the Agile processes continue. You may need a channel for product owners to share common challenges and solutions. As the interactions between product owners increase, you may find that in addition to asynchronous sharing, they also need real-time conversations, which you report out to stakeholders as a refinement.

Treating culture as a product requires designing with purpose and constant refinement

#2 Develop a cohesive strategy that ties in CX with EX

Customer Experience (CX) and Employee Experience (EX) are directly linked. Looking at 28 years of performance data from the 100 Best Companies to Work For in America, researchers found that higher employee satisfaction translated to outpacing competitors in the stock market by 2.3% – 3.8% annually. Since higher employee morale contributes to greater customer satisfaction, retail banks will uncover value by aligning CX and EX. Financial services can look to outside industries for guidance on coordinating improvements to the customer experience to improve employee platforms from data entry to report generation and analysis.

Take Southwest Airlines, which overhauled the employee experience of operation platforms, improving delay recovery by 15%. Like banking, airlines are highly regulated and operate in a competitive landscape where consolidations are increasing.

70% of executives believe that improved Employee Experience results in improved Customer Experience

#3 Align Design Thinking with Agile

Design Thinking is a human-centered approach—we put the customer at the forefront of innovation. It forces us to see the reality of the experiences through the customer’s eyes, not our own. Everything that matters should be designed, and everything that matters to customers should matter to your business. While any bank can assert that they will design what matters to customers, there needs to be a way to organize the creation of these designs that keeps the momentum moving in the right direction for the entire bank.

As banks migrate to the cloud, they can use this transition point to equip their workforce with modern interfaces and platforms to serve customers.

Bringing Design Thinking and Agile together requires planning and a desire to constantly improve.
  1. Here’s how to integrate Design Thinking with Agile:
  2. Align stakeholders to a single problem definition by conducting discovery interviews to identify the impacts on business goals
  3. Design and execute customer research that will address key questions and challenge assumptions
  4. Identify themes and patterns in the research to arrive at insights
  5. Based on the insights from the research, frame opportunities where your bank’s capabilities could meet a desire or need in the marketplace
  6. Brainstorm ideas of possible solutions and opportunities
  7. Develop concepts and prototypes to take into further research
  8. Plug into Agile with the writing and grooming of user stories

#4 Make customer insights accessible to all

Insights are fundamental to understanding, so customer insights are fundamental to understanding your customer better. Suppose you want the entire bank to rally around serving the customer with a design thinking mentality. In that case, your entire workforce will need access to customer insights and at least a basic understanding of them. An insights-driven culture will emerge as new habits that encourage decision-making based on data, not politics, become standard across the bank. By creating a unified customer experience platform, your employees can leverage real-time analytics and dashboards to derive insights and make informed decisions.

When employees make informed decisions about the customer experience based on insights derived directly from customers, the bank has arrived at customer centricity, improving its ability to preserve improvements from a digital transformation for the long term.

  • Develop a customer data strategy that articulates how often you generate new information on customers, its format, how it’s stored, and how it’s communicated to the entire organization
  • Create an Omni-channel listening strategy to collect unstructured data such as web surveys, app reviews, and call centers. Monitor those channels to identify breaks in the experience and inform the next set of product features
  • Leverage and collect customer analytics across channels so that you can isolate where the customer is dropping out of the journey to conversion and if the circumstances are within your control, such as unclear navigation or error messages
  • Look for an A.I. powered analytics platform that converts data into real-time insights allowing you to respond efficiently to a dynamic marketplace

Creating a more inclusive insights strategy

#5 Don’t just buy Agile, make agility a part of your DNA

It is essential to differentiate between “doing Agile” and “being agile.” Banks often do Agile by using the methodology: An iterative approach to digital delivery where work is broken down into incremental steps. You could manage an Agile workflow using a simple Kanban board or a more involved Scrum framework; you could deploy a team that is both cross-functional and highly collaborative. While workflows and operating models are essential parts of the equation for digital transformation, these are examples of doing Agile.

Being agile means adopting a mindset of “fail fast, learn fast,” where employees are empowered to respond to change quickly. No Kanban board or Scrum framework on its own can solve for the collaboration needed to discern how new regulation will impact a product already approved and scheduled for release. Subject matter experts need the space and resources to create, test, iterate, and repeat. Allowing for this process to happen is being agile. As the entire bank becomes future-focused, innovation becomes part of the DNA, and your bank is both agile and doing Agile.

Being agile means adopting a mindset of “fail fast, learn fast.

#6 Measure outcomes of culture change for continuous improvement

It is often easy to sense the emerging change in culture, but it is hard to measure. It’s more effective to measure the outcomes impacted by the culture rather than finding ways to measure the culture itself. Anticipate that culture change will affect most areas of your operations:

  • Product innovation
  • Employee engagement & empowerment
  • Customer satisfaction
  • Business outcomes
  • Leadership excellence

Before launching any digital transformation, the bank should establish what outcomes it would like to see. Traditional ways for measuring the outcomes via employee surveys and self-reports have significant shortcomings because they are static, unreliable, and only provide a snapshot of the evolving culture. With modern measurement methods such as streaming analytics from workplace tools and artificial intelligence, decisions can have instant insight into behavioral changes that have been brought about by culture, then iterate, pivot, and evolve.

  • Identify the areas of internal measurement early in the transformation
  • Choose measurement tools that give you insights into changing employee behavior and remain open to new approaches
  • Consider newer employee experience platforms that deliver personalized “nudges” to both encourage culture adoption and establish measurement collection with employees
  • Correlate employee insights with business outcomes, use OKRs or KPIs to supplement metrics, then communicate progress at a regular cadence across multiple channels to employees

How to Measure Culture

#7 Train your workforce to be digital-first and customer-centric

Digital-first employees in your workforce embrace modern technology and understand how to use digital tools to be more productive; they understand and leverage technology in ways that serve customer needs. By retraining your employees to be digital-first, the results of your bank’s transformation will be permanent. The modern tools employees learn to use will be combined with new working methods, resulting in velocity improvements and increasing customer-centricity. Emboldened with a new sense of customer empathy, retrained digital-first employees will be the backbone of your transformed bank.

  1. Create a culture of learning
  2. Remove the barriers for adoption
  3. Craft micro-learning programs
  4. Communicate early and regularly
  5. Gradually roll out new technology
  6. Achieve productivity via digital enablement

How to Foster Digital Fluency

Each repetition of the process is a success indicator for the bank

Launching a Digital Transformation is hard, but organizations can make lasting change with a complete understanding of how culture supports business objectives. You will not only modernize your bank, but you can also set the stage for innovation. This is a multi-pronged approach combining technology, methodology, and human enablers. By treating culture as a product, retail banks can build human-centered design and Agile methods into their processes, improving both the customer experience and the employee experience. As the organization becomes accustomed to widely sharing insights and measuring outcomes, digital natives will shepherd your organization forward.

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