A report by Paris, France-based Capgemini Consulting has concluded that outdated company cultures, which often create a disconnect between analogue management and digitally-savvy employees, are the number-one barrier to digital transformation – and that their influence is actually getting worse.

As noted by Claudia Crummenerl, Capgemini’s Germany-based head of executive leadership and change, in a June 8 post, when the multinational information technology consulting firm conducted a similar study in 2011, 55 per cent of respondents called culture the number one hurdle to digital transformation, a figure which has since risen to 62 per cent.

“For most, cultural issues continue to block digital transformation and it’s a problem that’s worsening,” she wrote, calling cultural change “a pre-requisite that is beyond the grasp of many companies as they look to drive innovation and change through smart technologies and data.”

In its report, Capgemini identified four key reasons many companies struggle with implementing a digital culture:

  1. A firm’s leaders neglect, underestimate, or misunderstand the importance of culture in their digital transformation planning;
  2. The existing culture is so deeply ingrained that it becomes very difficult to effect change;
  3. Like customers, employees are becoming more digital and see first-hand when leadership lacks digital literacy, creating a disconnect that hampers the development of digital culture;
  4. Most behavioural change initiatives accomplish little because employees are not empowered to take on new challenges, not compensated for learning new expertise, and not incentivized to break new ground and build new models.

Other challenges identified by the report included the presence of archaic IT systems and applications, lack of digital skills, and lack of clear leadership vision.

To address the problem, Capgemini suggests that companies pursue seven key attributes, including customer centricity, data-driven decision making, and collaboration.

To produce its report, Capgemini surveyed 1700 people, including senior executives, managers, and rank-and-file employees, in 340 organizations across five sectors and eight countries, augmenting the results with interviews with academic experts.

You can read the full report here. Capgemini also summarized its findings with a handy infographic, which you can check out below. Click for a larger version.

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