Dti-Digitalculture Report v2

The Digital
Culture Challenge:
Closing the Employee-Leadership Gap
Digital
Transformation
Institute
By Capgemini Digital Transformation Institute
Culture—a roadblock or a catalyst
for digital transformation
Ian Rogers, Chief Digital Officer at LVMH - “The big moment for an organization
is when they have embraced the fact that digital transformation isn’t a technical
issue, but a cultural change.”
The Chief Digital Officer of a global consumer products company says: “Culture
change is a prerequisite of digital transformation.”
Unfortunately, it’s a pre-requisite that is beyond the grasp of many companies as they look to drive
innovation and change through smart technologies and data. For most, cultural issues continue to block
62%
digital transformation and it’s a problem that’s worsening. In 2011, a majority of respondents (55%) said
that culture was the number one hurdle to digital transformation1 but in our latest research, this figure
has actually risen to 62% (see Figure 1).
Percentage of
respondents
who consider Why culture should be on top of CXOs’ agenda
culture as the As Deborah Ancona, MIT Sloan School professor, noted, “Leadership often underestimates the
top 1 hurdle importance of culture” and yet, culture is one of the most important sources of competitiveness.
to digital Having a culture that empowers staff and gives them a sense of purpose has become crucial in a
transformation world where only 13% of employees feel engaged.2 Without laying a strong foundation for culture
and aligning employees to a digital vision, it will be extremely difficult to make any meaningful
progress on digital transformations. As Professor Ethan Bernstein of the Harvard Business School
explained in a recent discussion with Capgemini. “Culture is the glue that either keeps us doing
things well or keeps us doing things poorly,”
Figure 1: Culture is the number one hurdle to digital transformation
Hurdles to digital transformation Respondents who reported culture among

(Percentage indicates responses ranking the issue in top two) the top two hurdles (Breakdown by geography)
France
Cultural issues 75%
62% Germany
72%
Spain
Presence of archaic IT systems and applications 71%
48% Netherlands
68%
Lack of digital skills Sweden
65%
43%
Italy
64%
Lack of clear leadership vision UK
38% 55%
US
54%
Global average
62%
Source: Capgemini Digital Transformation Institute Survey, Digital Culture; March-April 2017, N = 1700, 340 organizations
2
To understand why organizations are struggling and what they can do about it, we undertook an
extensive research program based on a clear definition of digital culture (see “What is digital culture?”).
We surveyed 1,700 people—including not only senior executives, but also managers and employees—
in 340 organizations across eight countries and five sectors. We also interviewed senior business
executives from a range of organizations across industries, as well as academic experts. The research
methodology at the end of the report provides more details on our approach.
What is digital culture?

Corporate culture is the result of how a company works and operates. It is composed of the
Culture is collective experiences of employees; what they believe in and what they value. Leadership,
the glue purpose, and how work can implement a vision also play a role in describing a corporate culture.
Building on our research with MIT and what we consider to be a digital organization,3 we have
that either defined digital culture as a set of seven key attributes.
keeps us
doing things
Customer Centricity
well or
keeps us
doing things
poorly” Agility and Flexibility Innovation
Professor
Ethan
Bernstein, Employee
Harvard Business Centricity Data-driven
Decision-Making
School Digital-First Mindset
Open Culture Collaboration
• Innovation: the prevalence of behaviors that support risk taking, disruptive thinking, and the
exploration of new ideas
• Data-driven Decision-Making: the use of data and analytics to make better business decisions
• Collaboration: the creation of cross-functional, inter-departmental teams to optimize the
enterprise’s skills
• Open Culture: the extent of partnerships with external networks such as third-party vendors,
startups or customers
• Digital First Mindset: a mindset where digital solutions are the default way forward
• Agility and Flexibility: the speed and dynamism of decision-making and the ability of the
organization to adapt to changing demands and technologies
• Customer Centricity: the use of digital solutions to expand the customer base, transform the
customer experience and co-create new products
We also applied the lens of employee experience across these seven dimensions, for example, the
engagement of employees and their empowerment or the weight of bureaucracy and hierarchy.
3
Understanding the digital culture challenge
What is at the heart of companies’ struggles with digital culture? From our own experiences
working with clients on digital transformation, and drawing on our discussions with executives
and academics for this research, we consistently heard three main obstacles:
1. The leadership neglects, underestimates or misunderstands the importance of culture in

their digital transformation planning.
2. The existing culture and way of doing things is so deeply ingrained that it becomes very
difficult to effect change.
3. Like customers, employees too are becoming more digital. They see first-hand when
leadership lacks digital literacy and this can create a disconnect that hampers the
development of digital culture
4. Most behavioral change initiatives accomplish little because employees are not
empowered to take on new challenges, they are not compensated for learning new
expertise, and they are not incentivized to break new ground and build new models.
“Employees will resist because they still see the old behaviors as critical
to their success and central to who they are while seeing the new norms
as risky.”
Professor Deborah Ancona
MIT Sloan School of Management
4
Digital culture: the disconnect
between leadership and employees
couldn’t be wider
Employees don’t see their organizations’ culture as “digital”
Our research reveals that there is a significant perception gap between employees and leadership. While 40% of senior
executives believe their organization has a digital culture, only 27% of the employees felt the same way (see Figure 2). This gap is
particularly pronounced in France and the Netherlands, with the US showing the closest level of alignment as shown in Figure 3.
(For details on potential reasons explaining these disparities, see “Understanding the leadership–employee divide”).
Figure 2: Percentage of leadership and employees who agree that there is a high prevalence of digital culture in
their organization
63%
53%
50% 48%
47% 45%
43%
40%
27% 27%
25%
20%
5%
3%
0% 0% 0% 0%
UK Sweden US France Netherlands Italy Germany Spain Global average
Leadership Employees
5
Figure 3: Geography breakdown of the leadership-employee’ disconnect on the prevalence of digital culture in their
organization (in percentage points, pp)
10pp -1pp 43pp 20pp
UK US France Germany
7pp 27pp 5pp 25pp
Sweden Netherlands Spain Italy
Gap in percentage points (pp): PP difference is positive when leadership response percentage
is higher than the employee response percentage
pp between -10 to 10 pp between 11 to 20 pp between 21 to 30 pp more than 30
6
Understanding the leadership—employee divide
Several studies have pointed to an implicit relationship between national cultures and organizational cultures4. It is
possible that the leadership–employee gap in France, Germany, Italy and Netherlands is in part influenced by national
socio-cultural influences. As a senior executive of a leading insurance company in the US says: “There is a reality of
geographical locations impacting culture. Some environments such as Silicon Valley have something in the air where
people are constantly trying to find new things.” This could help explain the closer alignment in the US across certain key
dimensions (See Figure 4).
However, by examining the data closely, we also found that leadership actions—or lack thereof—play a significant part
in defining corporate culture. We found that senior executives in these countries have failed to do a number of
things including:
• Articulate the culture vision in order to give managers and employees a standard for their work
• Adapt cultural pursuits to accompany a digital vision
• Act as mentors and role models to achieve over-arching cultural ambitions
• Adjust KPIs or the incentive structure to align with the transformation goals, or embed desired behavioral changes in
core value statements (see Figure 4).
Figure 4: Percentage of leadership and employees who agree with the following statements:
Organization has a digital vision Leadership acts as role models in displaying

which is well communicated through the company openness to change and adopting new behaviors
100%
95%
78%
68% 63%
61% 57% 58% 58%
50% 50%
45%
20%
10%
0% 0% 0% 0% 0% 0%
Italy US Netherlands France Germany Italy US Netherlands France Germany
Leadership Employees Leadership Employees
Role descriptions and KPIs aligned to Redesigned company core values

digital transformation goals to include digital culture attributes
95% 90%
93% 90%
78%
65% 68% 68% 63%
57%
50%
51%
10% 3% 3% 8% 10%
0% 0% 0%
Italy Netherlands Germany France US Italy France US Netherlands Germany
Leadership Employees Leadership Employees
7
41% vs. 85%
Percentage of employees vs.
leadership who believe they easily
collaborate across their organization
Not surprisingly, the lack of congruence between employees and leadership was consistently found in
all the seven dimensions of digital culture with pronounced gaps found in innovation and collaboration
(see Figure 5). Clearly, employees do not share their top executives’ enthusiasm for their organizations’
digital proficiency.
Figure 5: Percentage of leadership and employees who agree that there is high prevalence of
digital culture dimensions
We easily collaborate across functions and business units

85%
41%
We use digital technologies to create stronger customer engagement

80%
71%
We have a culture of innovation, experimentation and risk-taking

75%
37%
We have a culture of openness to the outside world: we work closely

with start-ups and partners
65%
34%
My organization has a culture of flexibility and agility

56%
40%
My organization always prioritizes digital solutions in all areas of work

56%
31%
Data-based decision-making is strongly promoted and practiced in all parts

of my organization
53%
33%
8
Management does not feel empowered to be a catalyst for the culture change agenda
Our research found that management teams are equally out of sync with leadership, as shown in Figure 6. The disconnect
is most prevalent in the Netherlands, closely followed by France, Italy, and the UK. This is concerning given that
management has the most influence on an employee’s day-to-day work and experiences. They act as vital agents of
change to communicate to the employees the behaviors that the organization values.
Figure 6: Percentage of leadership and management who agree that there is a high prevalence of digital culture in
their organization
63%
50%
47% 45%
40%
38%
33% 34%
27% 25%
22%
20% 20%
5%
0% 0% 0% 0%
UK Sweden US France Netherlands Italy Germany Spain Global Average
Leadership Management
When we looked at this more closely, we found that the disconnect stemmed from a number of sources. Firstly,
management does not believe that the leadership teams embody the new behaviors that the organization advocates
(See Figure 7). Moreover, a large percentage of managers do not believe that the organizations’ digital vision is
communicated adequately or that their role and KPIs align well with the transformation goals (See Figure 7).
Figure 7: Percentage of leadership and management who agree with the following statements:
My firm adjusts role descriptions and KPIs aligned to digital transformation goals
76%
55%
Leadership acts as role models in displaying openness to change and

adopting new behaviors
71%
41%
Redesigned company core values to include digital culture attributes

65%
46%
Organization has a digital vision which is well communicated through the company
61%
40%
Leadership Management
9
Leadership believe they have a digital vision, employees disagree
Uniting the entire organization on a bold, clear vision is vital to achieving your digital
transformation goals. But most organizations seem to be failing to engage employees.
Our research found considerable differences between leadership and employees on what
constitutes a meaningful, and achievable vision (see Figure 8). The reasons for this disconnect
are clear: leadership fails to communicate a digital vision that is concrete enough for employees
to internalize.
Figure 8: Percentage of leadership and employees who agree with the following
statements on digital vision:
69%
36%
Our organizations' digital vision

is pragmatic and can easily be
translated into concrete projects
and initiatives
62%
37%
A well-defined strategy and action

plan exists for achieving our
digital vision
61%
38%
The digital strategy and vision are

well communicated to the
whole organization
10
66% Innovation exists in theory, but not necessarily in practice
One employee that we interviewed told us that: “Working in agile, innovative environments doesn’t
vs come naturally to our company and neither has it been an area of focus from our leadership”. Our
survey validated this: 75% of senior executives believe they have a culture of innovation, but only
32%
37% of employees feel the same (see Figure 5). In Italy, this gap is amplified: 95% of senior executives
believe that innovation culture is highly prevalent, while none of the employees agree.
Percentage For innovation to take root, you need ways of working that allow for failure, encourage new thinking
of leadership and experimentation, and facilitate commercialization of ideas. As one pharmaceutical company
and employees employee told us, “Leadership thinks that innovation needs to come from startups. But we also need
to build innovation capabilities from within.” Our research indicates that the behaviors, processes,
who believe
and systems that germinate in an innovation culture do not exist in reality in many organizations, as
there is no shown in Figure 9 below:
bureaucracy
for submitting Figure 9: Percentage of leadership and employees who agree with the following statements on
ideas innovation initiatives:
Employees can set aside time from core work to innovate

74%
42%
We do not have to deal with bureaucracy to submit ideas

66%
32%
There are dedicated avenues for sharing innovative ideas

with senior leadership
64%
32%
Employees are engaged in the operational implementation of new ideas

62%
31%
My organization is investing in building digital capabilities of employees

60%
33%
We are empowered to experiment and deploy at pace in defined areas

56%
17%
There are established processes for commercializing ideas

47%
22%
Although lab(s) is in place, innovation is carried out

across the organization
28%
12%
11
We are pretty isolated, and we don’t
have any incentive to work with
other departments either.
a corporate employee
Collaboration is a myth, say employees; leadership disagrees

One of the employees we interviewed remarked, “We are pretty isolated, and we don’t have any
incentive to work with other departments either.” This sentiment is echoed through our survey:
• just 41% of employees believe their organization has a collaborative culture, while
• 85% of senior executives feel that the culture is collaborative (see Figure 5).
This disconnect is particularly high in Italy, the Netherlands, and Spain, where the differences are as
high as 90 percentage points between leadership and employee responses.
Upon taking a closer look, we found that employees are struggling to leverage the power of
collaboration, and are still being managed through traditional hierarchical norms and operational silos.
As Figure 10 shows, there is a fundamental disagreement between employees and leadership on all
aspects of collaboration.
Figure 10: Percentage of leadership and employees who agree with the following statements on
key collaboration initiatives:
My organization has a culture of promoting collaboration and exchange of ideas across

different departments and functions
95%
52%
My organization has redesigned the workplace to foster more collaboration

among employees
82%
44%
Discussions around novel business initiatives that leverage newer technologies

are open for all employees
76%
41%
In my organization hierarchy does not really matter, it is the value of your ideas
that makes a difference
76%
45%
Employees, who are crucial to the culture change agenda, are disengaged from the process.
This undermines the chances of pervasive and sustained success.
12
Where are organizations lagging in the culture journey?
Consistent progress across all seven culture dimensions is rare. Overall, organizations
are making the most progress in terms of collaboration and a customer-driven mindset.
However, they still have a long way to go in other areas.
Percentage of organizations with high prevalence of the

seven digital culture dimensions
Customer Centricity
59%
Agility and 31% 20% Innovation

Flexibility
Data-driven
Digital-First 31% 25%
Decision-Making
Mindset
Open Culture 35% 51% Collaboration
13
Innovation and co-creation is a significant and For many, data is still not being utilized fully to
ongoing problem across organizations, with only 7% make decisions.
feeling that the organization can test new ideas and
deploy them quickly.
32% 30%
7% 28% 18%
We can test Although lab(s) We have access We use analytics to We make decisions
new ideas, is in place, to a wide identify new business based on data and
learn and innovation is ecosystem and opportunities and analytics
deploy at carried out co-develop make future
pace across the solutions with predictions
organization partners
Innovation Culture of openness Data-driven Culture
Source: Capgemini Digital Transformation Institute Survey, Digital Source: Capgemini Digital Transformation Institute Survey, Digital
Culture; March-April 2017, N = 1700, 340 organisations Culture; March-April 2017, N = 1700, 340 organisations
Organizations lack agility and flexibility, and are And many do not see digital as a business-as-usual
failing to empower their workforce to move in new solution or approach.
directions.
37%
33% 31% 31%
Our company The processes in our People naturally think We take advantage
encourages bold, company are flexible of digital technologies of digital solutions
rapid and and adapted as when we consider ways wherever possible
independent required to improve
decision-making
Agility and Flexibility Digital-First Mindset
Source: Capgemini Digital Transformation Institute Survey, Digital Source: Capgemini Digital Transformation Institute Survey, Digital
Culture; March-April 2017, N = 1700, 340 organisations Culture; March-April 2017, N = 1700, 340 organisations
14
What sets
digital culture
leaders apart?
Who are the digital culture leaders?
We have identified a group of digital culture leaders,
whom we call the “Front-Runners”. The Front-Runners
represent close to a third of the organizations we
surveyed (34%) and are characterized by a combination
of the two following key features:
1. They have performed consistently well across the

seven dimensions of digital culture
2. Their leadership has largely succeeded in aligning
the wider organization to the desired culture.
The Front-Runners’ performance contrasts greatly

with a laggard group we call “Slow-Movers.” They also
comprise 34% of the organizations surveyed. The
Front-Runners also outdo another cohort, known as
the—Followers (32% of organizations)—who are
better placed than Slow-Movers in developing all the
seven culture attributes and in aligning their
employees.
15
Profile of Front-Runners
Front-Runners outperform Followers and Slow-Movers on all seven dimensions of digital culture
(percentage of organizations who agreed on high prevalence of digital culture dimensions in their
organizations)
Customer Centricity
91% 65% 21%
77% 15% 1% 53% 6% 1%
Agility and Flexibility Innovation
75% 17% 0% 60% 14% 0%
Digital-First Mindset Data-driven Decision-Making
37% 37% 31% 96% 53% 4%
Open Culture Collaboration
Front-Runners Followers Slow-Movers
Front-Runners exhibit a higher alignment between leadership and employees

Percentage of leadership and employees who agree that there is a high prevalence of digital culture
dimensions in their organizations
64% 67%
35%
21%
13%
1%
16
Strong representation of Front-Runners in the UK, Sweden and the US
(Front-Runners by geography)
63% 56% 13% 0%
60% 0% 0% 0%
Automotive has the highest proportion of Front-Runners

(Front-Runners by sector)
43%
38%
32% 31% 34%
25%
Automotive
Consumer Products
Telecommunication
Banking/Insurance
Retail
Global Average
17
83%
Percentage of Front-Runners who focus on
behavioral characteristics to recruit talent
Characteristics of Front-Runners
Front-Runners align KPIs and incentive systems
Front-Runners align their KPIs and incentive systems with their digital transformation strategy: in
fact, 70% have aligned their compensation structure to their transformation objectives, and
likewise, another 75% have aligned their role descriptions and incentive mechanism. Less than
one-fifth of Slow-Movers (see Figure 11) have managed this shift. Aligning KPIs and incentive
systems is key to delivering culture change. Lisbeth Rees, Executive General Manager, People and
Culture, NRMA—Australia’s largest membership organization focusing on mobility and transport—
while speaking about her firm’s performance management program said: “We have changed our
recognition program to mirror the new values, and subsequently they will also be a part of our
performance framework and will drive individual bonus. This will bring greater alignment”
Front-Runners hire differently
Front-Runners also take the lead in overhauling their hiring strategy. More than 8 out of 10
organizations consciously look for behavioral traits such as creativity and autonomy when recruiting
(see Figure 11). At Southwest, for example, recruiters consciously look for specific set of attributes
on the top of core skills. These include—innovation, fortitude, the ability to put other’s interests
first, and a fun-loving attitude. Employees who consistently display these qualities over a period of
time often go on to assume leadership positions.5
Figure 11: Percentage of Front-Runners, Followers, and Slow-Movers who agree with the
following statements on hiring, KPIs and incentives:
Hiring practices in my firm have incorporated behavioral characteristics such as

creativity and autonomy to recruit entrepreneurial talent
83%
41%
29%
Increasingly, my firm is hiring from start-ups, fintech firms, and digital native firms
such as Amazon, Google, Apple, and Facebook
82%
37%
23%
My firm adjusts role descriptions and KPIs to align with our overall digital transformation
75%
19%
17%
My firm aligns compensation structure to digital transformation objectives

70%
21%
13%
18
Front-Runners measure and monitor culture evolution
Culture change efforts, especially in large and traditional global companies, are costly and intensive.
Therefore, measurement of effectiveness is critical. Front-Runners are around 2X times more likely to
measure culture evolution using tools or balanced scorecards than Slow-Movers. We found that 44%
use that approach, compared to 23% of Slow-Movers. By putting measures in place, Front-Runners
spotlight what is working versus what is not while constantly monitoring progress.
Front-Runners have their leadership drive the digital culture change
Committed leadership is crucial to culture change. As the Chief HR Officer of a leading global industrial
company told us: “The first thing about culture transformation is that the person at the top of the
organization needs to fundamentally believe and be the best and biggest example of what change
needs to occur. Only then, can it be driven across the organization.”
Front-Runners get their leadership to drive the culture agenda and align their senior executives behind
transformation efforts. We found that 72% of Front-Runners ensure that their leadership acts as role
models in displaying openness to change and adopting new behaviors. In comparison, only 1% of
Slow-Movers involve their leadership in this process (see Figure 12).
Figure 12: Percentage of Front-Runners, Followers, and Slow-Movers who agree with
the following statements:
My organization has redesigned company core values to include

digital culture attributes
75%
23%
10%
Leadership acts as role models in displaying openness to change and

adopting new behaviors
72%
20%
1%
72%
Percentage of Front-Runners
where the leadership acts as
role models
19
Employees in organizations that are Front-Runners, have a positive perception of leadership involvement
in the digital game (see Figure 13).
Figure 13: Percentage of employees who agreed with the following statements on their
organizations’ leadership:
Our leadership/senior management understands the importance of having

a digital culture
83%
25%
3%
Every employee is encouraged to share thoughts with senior leadership and

there are dedicated avenues for doing so
70%
16%
1%
Front-Runners have a clear vision for digital transformation

A strong and clearly articulated vision means that Front-Runners offer their employees a compelling
picture of how the company will operate differently in the future. It also helps employees understand
the extent to which former assumptions may no longer be valid. We found that:
• 77% of Front-Runners have a concrete digital vision, a clearly defined strategy, and a plan of action
• But only around 3% of Slow-Movers have a similar vision and commitment (See Figure 14)
Figure 14: Percentage of organizations that agreed with the following statements on
digital vision and strategy:
A well-defined strategy and action plan exists for achieving our digital vision
77%
25%
3%
The digital strategy and vision are well communicated to the whole organization
76%
28%
3%
Our organizations' digital vision is pragmatic and can easily be translated into
concrete projects and initiatives
70%
31%
3%
20
How to evolve your digital culture?
Creating a digital culture is a mammoth task. It’s a multi-year endeavor that requires patience, tenacity and constant vigilance. As
the Chief HR Officer of a leading global industrial company told us: “I think given our size, complexity and work environment, we
are going to find it is going to be above five years.” Peter Vrijsen, Chief HR Officer of DSM, a Dutch multinational health,
nutrition and materials company, agrees, saying “That depends on the appetite of the organization, but four to five years if you
really want to get things done.”
To create a digital culture, organizations will need to have the right blend of top-down and bottom-up approaches that engage,
empower, and inspire employees to build the culture change together.
This long-term program will need to contain a number of key elements:
Figure 15: Coding a Digital DNA
Blend top down and bottom up approaches to code a Digital DNA
Deploy change agents

and empower employees
to drive digital culture
Take a systems
thinking approach to
culture change
Design new digital
KPIs focused on
Coding a behaviors rather than
successes or failures
Digital
DNA
Invest in the digital
skills that matter
Make digital culture
change tangible
Use collaboration tools to

increase transparency and
reach out to employees
Set a clear vision and have visible leadership involvement
21
Deploy change agents and empower employees to drive digital culture
Organizations need to identify and encourage the employees who can be change agents or “digital
ambassadors,” demonstrating to others that new behaviors are not a risk. Nestlé makes significant use
of digital change agents. The company set up a “Digital Acceleration Team” in its headquarters in Vevey,
Switzerland to host top talent from various Nestlé countries. The objective is to develop their digital
expertise during a period of eight months and then send them back to their local markets. The model
went viral and now 26 of these hubs have been set up in local markets6.
Design new digital KPIs focused on behaviors rather than successes or failures
Evaluating employees on outcomes and traditional KPIs might set them up for failure and create
greater resistance to culture transformation. Therefore, organizations need to shift the dial to create
performance systems that reward positive digital behaviors. As Professor Deborah Ancona from MIT’s
Sloan School told us, “Organizations need to move away from the traditional ways of evaluating an
individual or an experiment. An experiment should be judged not on its success or failure but on what it
taught the organization. Employees should be assessed not on their success or failure but on their
adoption of the new behaviors.” Such questions could include:
• Are employees collaborating across business units?

• Are they engaging with the wider ecosystem?
• Are they encouraging other teams to use new behaviors?
The Chief Digital Officer of a multinational consumer products company suggests that metrics should
focus on evolution of behaviors. He asks, “Are the silos softening? Is the line between sales and
marketing diminishing? Are there structures or positions that emerge that don’t really think about
those distinctions?”
22
Make digital culture change tangible
Our research shows that employees are not engaged in the culture change journey. This
disengagement is often due to generic organizational vision-and-mission statements that make little
sense to employees focused on day-to-day objectives. Leadership and management need to translate
the broader digital vision into compelling and tangible business outcomes to which employees can
relate, for which they feel accountable, and that they can internalize in their current roles.7 Employees
also need to feel like they understand the rationale for change. As Magnus Egeberg, Senior Vice
President at Nets Group, a payment solutions company, explained, “Leadership has to be sharp and
clear in communicating why a change was made and be transparent about the objective and the bigger
picture.” It is here that middle management plays a key role, as a vital touch point between the
leadership and the bulk of the organization. As a senior executive of a leading insurance company in the
US says, “I think middle managers play a crucial role, since they are the ones who actually help make the
culture a real thing. They take the high-level vision and then break it down to meaningful outcomes.”
Use collaboration tools to increase transparency and reach out to employees
Internal social networks oil the wheels of employee collaboration and help to connect the bottom and
top parts of the organization. A senior executive at a multinational consumer products told us: “One of
the biggest inefficiencies in large enterprises is duplication. […] Organizations that do make things
happen quickly are those that have a smart sharing system and a strong sense of sharing across the
organization.”
Tools should be developed and deployed while keeping employee interests in mind. As Ethan Bernstein,
a Harvard Business School Professor explained: “Imagine the difference between an employee-centric
and management-centric approach: ‘Here is a tool for you to track your steps’ (employee-centric) or
‘Here is a tool for your manager to track your steps for you’ (management-centric). If you know your
manager is tracking performance, you deliver compliance with her or his expectations. If you are the
only one tracking it, you experiment to see how different behaviors trigger different results, yielding
improvement and innovation and change.”
Invest in the digital skills that matter
The lack of digital skills is one of the top hurdles to culture transformation. Front-Runners prioritize
building the digital skills of their employees. 73% of them make investments in new digital skills
compared to just 11% of Slow-Movers. As a result, employees feel more engaged in the transformation
process as their skills are aligned with digital ways of working. Cosmetics major L’Oreal made a
significant commitment to its employees by partnering with a leading digital training specialist to build
an online learning program focused on digital marketing skills for its 7,000 global marketing employees.
Companies need to assess the gaps between existing capabilities, expertise and needs.
AT&T: Creating digital employees of the future through

a first-of-its-kind re-training agenda
AT&T, the world’s largest telecoms company, acknowledges that many of its legacy businesses
were increasingly on the path to becoming obsolete. The company envisioned a dramatically
different future for the firm, where it would replace 75% of its hardware with software systems
by 2020. To enable its 270,000 strong workforce to adapt to this radical change, the leadership
team devised a “Workforce 2020” initiative. This initiative aims to re-educate about 100,000
employees to do very different new jobs. Vision 2020, a more than billion dollar investment,
combines classroom-based and online classes in areas like data science and digital networking to
elevate people’s technology skills. Some results have already started to emerge. In 2016, AT&T
filled more than 40% of open jobs with internal candidates and at least 50% of the employees are
undergoing some sort of training program that prepares them for a new job in the future.8
23
Take a systems thinking approach to culture change
It is difficult to transform culture by using a linear change approach. For example, organizations will
struggle to jumpstart an innovation culture by solely setting up an innovation center without the
backing of multiple complementary behaviors, an innovation and collaborative mindset, or partnership
approaches to working with start-ups. A system thinking approach is required to drive cultural changes.
This approach hinges on enacting multiple changes at the same time so that the organization develops
reinforcing loops of behavior.9
Set a clear vision and have visible leadership involvement
Culture change is first and foremost a leadership act. Leadership must visibly live the values that they
are trying to embed into the organization. As Melissa Hartmann, Head of Digital Strategy, IAG, Sydney
says, “It is the responsibility of leadership to role model the culture we desire, failing which the
employees will not see the value. It needs to start there and if done well, it gives the opportunity
for the rest of the organization to adopt and engage with that approach.”
However, this is easier said than done. As Tom Goodwin, EVP, Head of Innovation of Zenith Media says:
“There are a lot of leaders who do a good job talking about digital but only few are actually walking the
talk.” To enable senior executives to act as role models, some organizations are experimenting with
more immersive experiences for leadership outside the organization. For example, to change the
company’s hierarchical management culture, Axel Springer (AS) sent three of its most senior leaders to
California to learn from the technological and entrepreneurial companies in San Francisco. They spent
nine months there on sabbatical. The AS team networked with startups and studied the dynamics of
the US start-up culture to understand how they fostered innovation, openness, and collaboration.
These executives became role models, motivating their direct reports to drive digital change in the
business.10;11
Conclusion
Digital technologies can bring significant new value, but organizations will only unlock that potential if
they have the right digital culture ingrained and in place. Currently, that is not happening. Employees
are being sidelined and disenfranchised in the culture change journey, and the gap between leadership
and employee perceptions is stark.
Acknowledging the gap is the first step in resolving this issue. As our Front-Runners show, organizations
need to begin with a clearly articulated vision and ensuring their leadership walks the talk. At the same
time, they need to re-design KPIs to measure behaviors rather than outcomes, deploy change agents to
cross-pollinate desired behaviors, and invest in digital skill training and collaboration tools for
employees. Organizations that invest in people, and align the values and mission of the company to
employees, set the stage for working with purpose. Ultimately, this creates an ecosystem that
promotes learning, experimenting and growth. As such, employees rally together to achieve something
greater than just individual execution.If they plan early, and execute with clarity and purpose,
organizations can turn their digital culture identity into a significant competitive advantage.
24
There are a lot of leaders who do a good
job talking about digital but only few are
actually walking the talk”
Tom Goodwin
Head of innovation at Zenith Media
25
Research Methodology
Our research drew on quantitative and qualitative techniques:
Survey: We surveyed 1,700 respondents in 340 organizations from March to April 2017:
• 20% were senior executives at Director level or higher, 40% were middle management, and 40% were employees in
non-supervisory roles.
• It spanned five sectors: Automotive, Banking/Insurance, Consumer Products, Retail, and Telecommunications.
• We covered eight countries – the United States, United Kingdom, France, Germany, Italy, Sweden, the Netherlands and
Spain.
Respondents by Geography
12% 35% 12% 12%
9% 6%
9% 6%
Respondents by industry Respondents by job category
20% 20%
20%
Consumer Products Leadership

40%
Automotive Management
JOB
INDUSTRY Banking/Insurance CATEGORY Employee
20% Telecommunication
Retail
20%
40%
20%
Focus Interviews with academics, industry leadership and employees: We conducted a number of interviews with
academics, industry senior executives, and employees. This was to build a rounded perspective on culture challenges and
understand the latest theoretical frames of reference.
26
References
1. Capgemini, “Digital Transformation: A Roadmap For Billion-Dollar Organizations”, 2011
2. Gallup, “The Worldwide Employee Engagement Crisis”, January 2016
3. Capgemini, “Organizing for Digital: Why Digital Dexterity Matters”, 2015
4. Hofstede, G., “Attitudes, values and organizational culture: Disentangling the concepts, Organization
Studies”, 1998
5. Harvard Business Review, “How Southwest Airlines Hires Such Dedicated People”, December 2015
6. Nestle,” Nestlé drives digital innovation with Silicon Valley outpost”, November 2013
7. Brian Solis and Jostle Corporation, “The Engagement Gap: executives and employees think differently
about employee engagement.” 2015
8. Fortune, “Can AT&T retrain 100,000 people?”
9. Capgemini interview with Deborah Ancona, professor at MIT, April 2017
10. NYTimes, “An Old-Media Empire, Axel Springer Reboots for the Digital Age”, December 2015
11. Stanford Business School, “Axel Springer in 2014: Strategic Leadership of the Digital Media
Transformation”, 2014
27
Accelerate your digital culture transformation
journey by partnering with Capgemini
Our value proposition

Our purpose is to guide organizations through cultural change in an era of digital disruptions.
We design, shape and grow the culture and talent of next-generation organizations.
Capgemini’s culture transformation approach is rooted in our firm belief that culture and
behaviors are at the core of a successful digital transformation strategy. We help our
clients transition to a digital culture and drive tangible outcomes from their digital
transformation initiatives.
How we do It—our approach
Three key steps:
• Understanding and empathising

• Finding patterns and generating insights
• Co-creating recommendations
Four key principles:
• Co-creation: Enables true ownership of the evolution by empowering team members

• Empathy and data-driven: We embed real human stories into data to cross-validate emotional
insights with numbers
• Positive Psychology: This strength-based methodology taps into current strengths, skills
and capabilities.
• Behavioral Science: To effectively design experiences, rituals and motivational triggers that
shift beliefs and behaviors
We have also created numerous tools that we use throughout the digital culture journey.
Our Digital Culture Assessment benchmarks companies’ digital culture and measures the maturity
of all the digital culture dimensions. Our Digital Leadership Assessment examines whether a
leader has adopted digital in his/her leadership style and is capable of driving the organization’s
culture towards a digital future.
Why us?
Our proven and innovative methods have helped organizations in a number of industries—
retail, financial services, mining and automotive—to ensure a sustainable and successful digital
culture transformation. Our iterative approach helps shift the corporate culture in an effective
and successful way towards a digital mindset.
28
Discover more about our recent research on digital transformation
Organizing for Digital Transformation When Digital Disruption The Innovation Game:
Digital: Why Digital Review 8: The New Strikes: How can Why and How Businesses
Dexterity Matters Innovation Paradigm for Incumbents Respond? are Investing in
the Digital Age: Faster, Innovation Centers
Cheaper, and Open
Fast Thinking: Telefonica: Innovation SAP: Interview with Ctrl-alt-del: Rebooting the
Reinventing Strategy through Claus von Riegen, , Vice Business Model for the
for a Digitally- Intrapreneurship – President and Head of Digital Age
Disrupted World - Interview with Director Business Model
Interview with Rita of Innovation at Innovation (BMI) at SAP:
McGrath (Columbia Telefonica and Head of Innovating at SAP – the
Business School) Telefonica’s Barcelona Delicate Balance
R & D lab between Incremental
and Radical Innovation
Frugal Innovation: GE: An interview with Cracking the Data Being Digital: Engaging
Interview with Navi Transform to the power of Conundrum: How the Organization to
Radjou digital Beth Comstock, Successful Companies Accelerate Digital
Vice Chair of GE, How an Make Big Data Transformation
Industrial Leviathan Operational
became a Digital Giant
29
About the Authors
Jerome Buvat Brian Solis
Global Head of Research and Head, Capgemini Digital @briansolis
Transformation Institute Brian Solis is a digital analyst and an award-winning
jerome.buvat@capgemini.com author, prominent blogger/writer, and keynote
Jerome is head of Capgemini’s Digital Transformation speaker. A digital anthropologist and futurist, Solis is
Institute. He works closely with industry leaders and studying the effects of emerging technology on
academics to help organizations understand the business and society. His new book, X: The Experience
nature and impact of digital disruptions. When Business Meets Design, introduces the
importance of experiences as the new brand, bringing
the worlds of CX, UX and BX together to re-imagine
the customer journey and lifecycle.
Claudia Crummenerl Catherine Aboud

Head of Executive Leadership and Change Director, People Transformation, Capgemini
claudia.crummenerl@capgemini.com cathy.aboud@capgemini.com
Claudia has more than 14 years of experience in Cathy leads the People Transformation practice within
change management with large organizations in Digital Services, Capgemini Australia and has a proven
Europe, Asia and in the USA. Claudia is leading the track record in human capital management
Executive Leadership and Change practice for engagements across a diverse range of industries.
Capgemini Consulting. Her main interest focuses on Her collaborative style ensures the people aspects
leadership in the digital age and shaping the future remain at the forefront of stakeholders in all
people agenda. Claudia has been one of the co-authors consulting engagements.
of the renowned Change Management study of
Capgemini Consulting since 2011.
Kunal Kar Hind El Aoufi

Manager, Capgemini Digital Transformation Institute Lead, Culture and Talent practice, Capgemini
kunal.kar@capgemini.com hind.el-aoufi@capgemini.com
Kunal is a manager at Capgemini’s Digital Hind is an organizational culture expert and leads the
Transformation Institute. He tracks the impact of Talent and Culture practice at Capgemini Australia.
digital technologies on the financial sector and helps She works with business leaders to design, shape and
clients on their digital transformation journey. grow the culture of next generation organizations.
She is passionate about empowering leaders and team
members to unlock their culture and organization
through collaboration and innovation.
Amrita Sengupta
Senior Consultant, Capgemini Digital Transformation
Institute
amrita.a.sengupta@capgemini.com
Amrita is a senior consultant at Capgemini’s Digital
Transformation Institute. She tracks the patterns of
digital disruptions across industries and its impact on
businesses.
The authors would like to especially thank Ramya Krishna Puttur from Capgemini Digital Transformation Institute for her extensive
contribution to this report.
The authors would also like to thank Subrahmanyam KVJ from Capgemini Digital Transformation Institute; Jaimy Szymanski, digital
analyst, Didier Bonnet, Ursula Bohn, Dominique Schaefer, Cécile André, Tony Fross, Jan Brouwer and Matteo Costa from Capgemini
Consulting; Ben Gilchriest, Christophe Pla, Kim Smith, Carolina Martinez Navas and Ron Tolido from Capgemini.
The Digital Transformation Institute

The Digital Transformation Institute is Capgemini’s in-house think-tank on all things digital. The Institute
publishes research on the impact of digital technologies on large traditional businesses. The team draws
on the worldwide network of Capgemini experts and works closely with academic and technology
partners. The Institute has dedicated research centers in the United Kingdom and India.
dti.in@capgemini.com
30
For more information, please contact:
Global
Claudia Crummenerl
claudia.crummenerl@capgemini.com
North America Central Europe (Germany/ Austria/ Sweden / Finland

Tony Fross Switzerland and Netherlands) Anna Karin Vernet
tony.fross@capgemini.com Claudia Crummenerl annakarin.vernet@capgemini.com
Chris Peila claudia.crummenerl@capgemini.com UK
chris.peila@capgemini.com Ursula Bohn Rachel Charlton
Australia ursula.bohn@capgemini.com rachel.charlton@capgemini.com
Catherine Aboud Herman Bosker Anne Gauton
cathy.aboud@capgemini.com herman.bosker@capgemini.com anne.gauton@capgemini.com
France
Catherine Paquet
catherine.paquet@capgemini.com
31
About
Capgemini
A global leader in consulting and technology services, Capgemini is at
the forefront of innovation to address the entire breadth of clients’
opportunities in the evolving world of cloud, digital and platforms.
Building on its strong 50-year heritage and deep industry-specific
expertise, Capgemini enables organizations to realize their business
ambitions through an array of services from strategy to operations.
Capgemini is driven by the conviction that the business value of
technology comes from and through people. It is a multicultural
company of 200,000 team members in over 40 countries. The Group
reported 2016 global revenues of EUR 12.5 billion.
Visit us at
www.capgemini.com
This message contains information that may be privileged or confidential and is the property of the Capgemini Group.
Copyright © 2018 Capgemini. All rights reserved.
This message is intended only for the person to whom it is addressed. If you are not the intended recipient, you are not authorized to read,
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The Digital

Figure 1: Culture is the number one hurdle to digital transformation

Hurdles to digital transformation Respondents who reported culture among

What is digital culture?

Open Culture Collaboration

1. The leadership neglects, underestimates or misunderstands the importance of culture in

UK Sweden US France Netherlands Italy Germany Spain Global average

10pp -1pp 43pp 20pp

7pp 27pp 5pp 25pp

Sweden Netherlands Spain Italy

pp between -10 to 10 pp between 11 to 20 pp between 21 to 30 pp more than 30

Organization has a digital vision Leadership acts as role models in displaying

Italy US Netherlands France Germany Italy US Netherlands France Germany

Leadership Employees Leadership Employees

Role descriptions and KPIs aligned to Redesigned company core values

Italy Netherlands Germany France US Italy France US Netherlands Germany

Leadership Employees Leadership Employees

We easily collaborate across functions and business units

We use digital technologies to create stronger customer engagement

We have a culture of innovation, experimentation and risk-taking

We have a culture of openness to the outside world: we work closely

My organization has a culture of ﬂexibility and agility

My organization always prioritizes digital solutions in all areas of work

Data-based decision-making is strongly promoted and practiced in all parts

UK Sweden US France Netherlands Italy Germany Spain Global Average

Leadership acts as role models in displaying openness to change and

Redesigned company core values to include digital culture attributes

Our organizations' digital vision

A well-deﬁned strategy and action

The digital strategy and vision are

Employees can set aside time from core work to innovate

We do not have to deal with bureaucracy to submit ideas

There are dedicated avenues for sharing innovative ideas

Employees are engaged in the operational implementation of new ideas

My organization is investing in building digital capabilities of employees

We are empowered to experiment and deploy at pace in deﬁned areas

There are established processes for commercializing ideas

Although lab(s) is in place, innovation is carried out

Collaboration is a myth, say employees; leadership disagrees

My organization has a culture of promoting collaboration and exchange of ideas across

My organization has redesigned the workplace to foster more collaboration

Discussions around novel business initiatives that leverage newer technologies

Percentage of organizations with high prevalence of the

Agility and 31% 20% Innovation

Open Culture 35% 51% Collaboration

Innovation Culture of openness Data-driven Culture

Agility and Flexibility Digital-First Mindset

1. They have performed consistently well across the

The Front-Runners’ performance contrasts greatly

91% 65% 21%

77% 15% 1% 53% 6% 1%

Agility and Flexibility Innovation

75% 17% 0% 60% 14% 0%

Digital-First Mindset Data-driven Decision-Making

37% 37% 31% 96% 53% 4%

Open Culture Collaboration

Front-Runners Followers Slow-Movers

Front-Runners exhibit a higher alignment between leadership and employees

63% 56% 13% 0%