Elements of the company culture which impact the digital evolution

September 28, 2017

In the previous post we discussed barriers to digital deployment. Now, we move on to defining elements of the company culture.

The company culture has many components and can range from attitudes toward diversity to perceptions around compensation and benefits. The issues related to the digital evolution, though, are often topics new to the equipment-centric company, with no easy answers. They can include a wide variety of elements—from security around sensor-generated data to relationships with customers and fulfilling service agreements.

Instilling a new culture is not easy, especially when employees are veteran workers entrenched in traditional processes and reluctant to venture into untested territory. “Executives must be proactive in shaping and measuring culture, approaching it with the same rigor and discipline with which they tackle operational transformations. This includes changing structural and tactical elements in an organization that run counter to the culture change they are trying to achieve,” a McKinsey report advises.

Let’s look closer at some of the elements of a digital-ready culture for a company that sells, rents or services equipment.

Customer engagement. This is often a sticking point for equipment-centric companies. You may be struggling to mobilize employees around the complex buying cycles for construction equipment or farm machinery. The issues of rental vs. sales can be complex as well. And understanding customer buying journeys and the importance of a consistent customer experiences is difficult when talking about equipment that is over-sized, capital-intensive, and mission-critical. Understanding priorities as they relate to customer service is essential, too. How far can each employee go to make sure the customer is happy?

Eliminating silos. This has been a priority for many equipment companies for years, yet the issue lingers. Breaking down departmental barriers between sales and service, operations, dealer showroom and inventory warehouse are ongoing issues which take on greater importance in the digital business model. Breaking down barriers must be one of the first tasks to be addressed in a digital strategy. Improving visibility will help. Cross-operational training and teams which bring in personnel from multiple departments will also encourage team-thinking, rather than department or division exclusivity.

Accepting risk. Adopting a digital mindset means a willingness to accept risk and try innovative, unproven concepts. Not all ideas will succeed. Top management must communicate to team members that some failures are expected and there will be no reprisals. Fear of failure can lead to fear of trying new ideas. But, the pendulum cannot swing to the extreme opposite-saying reckless, high-risk decisions are acceptable. If the issue is safety related, risk must be kept to a minimum. If the issue is a new service offering, risk tolerance can be much higher. Where is the balance point for our company?

Finding that sweet spot is not easy. As the McKinsey report states, “On the one hand, willingness to experiment, adapt, and to invest in new, potentially risky areas has become critically important. On the other, taking risks has become more frightening because transparency is greater, competitive advantage is less durable, and the cost of failure is high, given the prevalence of winner-take-all dynamics.”

Encouraging problem-solving. Finding new ways to solve old problems is one of the hallmarks of a digital plan, so employees must understand the basic principles of problem-solving and have access to necessary tools. Telemetry data, account details, service histories, report writing, and KPI tracking will be important capabilities to help personnel craft solutions.

Team approach. In this digital era a team approach is more important ever. Working as individuals, some of the enterprise-wide innovations that are part of a digital overhaul will be difficult to enact. By forming cross functional teams to address these large initiatives, the company will have the benefit of multi-dimensional viewpoints which cover a variety of scenarios and “what if…” questions. A team approach also shares the burden across multiple personnel so one department doesn’t carry the full weight of an extra workload. When teams are assigned to work through digital issues, it also helps generate buy-in, making personnel feel like part of the solution.

Empowering users. A digital-ready equipment company places heavy emphasis on making each employee empowered to engage, make decisions and further drive the company initiatives—without being encumbered with excessive rigidity and red tape. Construction contracts and large projects are at stake. Delays to work through a slow decision-matrix will annoy customers. Personnel should be able to quickly make well-informed decisions and be able to follow through.

Next steps for building the company culture

Can bandages be applied to the existing company culture in order to make shifts, correct false assumptions, and fix gaps? Or, is the cultural change simply by-product of the digital deployment that will happen naturally? The McKinsey report says, “In our experience, executives who wait for organizational cultures to change organically will move too slowly as digital penetration grows, blurs the boundaries between sectors, and boosts competitive intensity.”

Equipment-centric organizations will be better positioned if they take active steps in changing the culture, influencing viewpoints and helping personnel make the transition to the new way of doing business—and thinking about the business and customers.

Read the next installment in the series for tips on creating the digital culture, step by step.

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