Digital Transformation: A Cultural Challenge

My previous two articles looked at user-centered design approaches in product and customer experience (CX), as well as the defining traits of agile organizations. To close this series, it's time to turn to the challenges of transformation, drawing from real-world experience.

Transformation is rarely straightforward. It’s a complex, demanding process, driven by the need to future-proof the business, unlock new revenue opportunities, and respond more effectively to changing customer needs.

The Double Diamond Framework 

So what does it take to succeed? A useful lens is the Double Diamond framework.

The first diamond centers on customer centricity. It starts with discovery: exploring customer needs and pain points, followed by a “define” phase to prioritize solutions. Here, the customer is placed at the heart of the strategy, with the goal of delivering needs-driven experiences.

The second diamond reflects agility. It focuses on development through iteration and testing, allowing for quick adaptation from customer feedback until delivery.

Pitfalls include over-reliance on quantitative data, which can overlook qualitative insights from ethnographic research, and top-down decision-making that excludes customer feedback. Cultural factors are often decisive, and I will describe the most important ones I've experienced.

Shared Objectives

Clear objectives form the foundation of transformation. What is the company’s long-term vision? Is the focus global expansion, digital efficiency, market leadership, or new business models?

Clarity ensures alignment. Everyone, from employees at the bottom to executives at the top must understand how their work drives strategic outcomes. It’s not just about setting tasks, but defining how value will be measured over time.

Take the example of a transportation company aiming for global leadership by 2027. Should progress be tracked by international reach, customer diversity, or EBITDA? If IT pursues systems stability blocking new products deployment and innovation, product builds globally scalable and replicable omnichannel experiences rejected by local operations, marketing focuses on one single business line against new business models, finance preserves siloes between business lines – departments are pursuing conflicting interpretations of the general objectives, the end result is fragmentation and inefficiency.

Results and Metrics 

What isn’t measured often isn’t improved. And wrong metrics can stall progress.

Consider the debate around the global UN goals and their difficult implementation. The challenge is probably GDP as a metric — many argue it misses key dimensions like well-being or sustainability. The same applies in organizations: If team objectives don't reflect evolving strategy, they’ll be deprioritized.

Behavior follows what is measured and rewarded. Declaring new goals isn’t enough — evaluation systems must evolve too. For example, applying traditional ROI expectations to innovation leads to frustration, as these projects require room for trial and error.

To support transformation, new metrics must align with new priorities. Many companies face a "deception phase" after early digitalization — progress seems slow because old KPIs fail to capture new value.

Change Management 

In "digital transformation," the operative word is transformation. And that requires structured change management.

Just as someone training for a marathon needs a phased plan, so does a business undergoing change. One well-known model is ADKAR:

• Awareness of the need for change

• Desire to participate

• Knowledge of how to change

• Ability to act

• Reinforcement to sustain change

Change is often assigned to HR due to its cross-functional role. But HR may lack the resources or authority to drive systemic shifts. Without clear guidance and follow-through, efforts risk becoming symbolic. I’ve seen some companies resort to symbolic gestures — like posting new corporate values on the walls — without providing guidance or measurement tools to support adoption.

Psychological Safety and Trust 

Top-down cultures often treat employees as executors rather than contributors, stifling initiative. 

Consider a scenario where a team builds a digital proof of concept under tight time and budget constraints, only to be publicly criticized by leadership during a demo. Or imagine agreeing on an RFP with multiple stakeholders, only for a manager to override the decision without explanation. The result is disengagement, reduced creativity, and declining performance.

These behaviors erode trust. Psychological safety is key to open communication, risk-taking, and innovation. Employees must feel safe to speak up and take initiative.

This calls for a shift from hierarchy to empowerment. Teams should be trusted to act autonomously while staying aligned with shared goals.

From Collaboration to Coordination 

Collaboration is often praised as the engine of innovation. But in complex environments, coordination can be even more powerful.

Email, for example, is a collaborative tool, but rarely boosts productivity. Complex systems require structured coordination: clear roles, mutual trust, and decentralized decisions. While collaboration is about working together, coordination is about working independently toward shared outcomes. Flattening hierarchies and sharing information is key. Many organizations struggle because authority remains centralized and change is resisted.

Amin Toufani (T Lab, Singularity University) introduced the "coordination diamond:" a step beyond collaboration. 

Think of a Formula 1 pit stop: Success depends on each person’s flawless execution, not constant discussion. For coordination to work, information must be democratized and decision-making decentralized.

This is a cultural shift, especially in organizations where authority is centralized and roles are ambiguous.

Building New Capabilities 

Transformation demands new skills. One executive put it well: In any change, a third of people will embrace it, a third will be neutral, and a third will resist.

Take a traditional IT team focused on internal systems. A shift toward cloud, AI, and Agile requires new roles like DevOps or integration experts. This doesn’t mean insourcing everything, but complementing teams with new mindsets and capabilities.

Resistance often comes from trying to "do new things with old tools." Without training or process change, frustration grows. Momentum builds when new people join, structures evolve, and knowledge is shared.

Doing Agile or Being Agile 

Many organizations mistake Agile for a set of tools rather than a mindset. Online courses or certifications might help you "do Agile," but they don’t ensure you "are Agile."

Let’s start with the framework. Throughout the 20th century, most organizations used the Waterfall method to manage projects. This linear, sequential approach works well for hardware-based industries. For example, a car manufacturer might plan a new model years in advance, defining every detail before design, production, testing, industrialization and launch. In this model, the scope is fixed, while time and costs are the variables — often uncertain and subject to change.

However, this approach fails when dealing with rapidly evolving technologies and customer needs. In contrast, Agile works in short, iterative cycles that allow for ongoing adaptation. Rather than locking in scope from the beginning, Agile fixes time and cost, and leaves the scope flexible, evolving it through continuous feedback, experimentation, and learning.

As one of my professors said: "An error in hardware is a failure; an error in software is a learning opportunity."

Agile enables responsiveness in fast-changing environments. But applying Agile frameworks where they don’t fit — like legal or finance — misses the point. On the contrary, Agile as a mindset matters across all departments.

Being Agile means empowering teams to experiment, deliver value incrementally, and learn from failure. It’s about transparency, trust, and adaptability.

Governance 

Bureaucracy and bloated management can stall transformation. A responsive organization favors cross-functional teams, horizontal communication, and empowered execution.

Leadership should focus on:

• Managing information, not people

• Managing emotions, not egos

• Managing energy, not time

There is no one-size-fits-all governance model. Structures must evolve with strategy and cultural maturity. Ideally, experts from tech, product, marketing, and ops collaborate with a shared purpose.

But internal politics and legacy mindsets can get in the way. Long-tenured employees may resist new ideas. Effective leadership balances respect for experience with openness to fresh perspectives.

Conclusion 

This article hasn’t focused on technology, but on people and culture. Digital transformation is about enabling people to use technology in meaningful, human-centered ways. So it is about people and culture, as technology is only a tool. 

While AI may power personalization, lasting impact in Customer Experience comes from empathy, creativity, and service quality. Automation should free teams to focus on research, ideation, and delivering quality experiences.