There is no shortage of business leaders pursuing digital transformation. The ambition is popular across all kinds of industries, and rightly so. Consumers are demanding seamless, personalized and predictive experiences from the brands they bring into their lives. The firms that are best at meeting those expectations are poised to become the new market leaders.
While some legacy firms are experiencing incremental success in their digital transformation journeys, others continue to hit roadblocks that threaten to take them off course entirely. According to Gartner, failure to transform is not uncommon.
Fortunately, there is a fix.
But before we get there, let’s address the problem. It’s rooted in the fact that digital transformation is really about culture change more than anything else. Even as technology advances exponentially, many legacy enterprises are standing still, tethered to 20th century operating models and outdated corporate norms.
A people-centric culture recognizes the power of innately human traits, and it thrives on input from as many different perspectives as possible. The fact is diversity within human capital empowers leaders at all levels to freely reimagine how their organizations can exceed the expectations of digital consumers. It achieves two other very important things: 1) faster transformation; 2) consumer trust.
Legacy Firms are Racing to Execute
Digital transformation is about keeping pace. The firms that are able to move fastest are the ones that will ultimately win the love and loyalty of digital consumers who have already begun to entrust their financial and personal data to GAFA (Google, Amazon, Facebook, Apple). In less than a decade, these digital companies have been able to capture a huge share of the market in all manner of goods and services, largely because of their ability to be nimble and agile in all things from innovation to data
analytics, processes to operations. A culture that honors diversity and inclusion is a central part of this dexterity.
Research has found a diverse workplace also increases innovation and problem-solving, two key components to digital transformation. When we go beyond acceptance and tolerance of difference to in fact celebrating it, we open the floodgates to new ideas and perspectives. Digitally transforming firms must figure out how to connect technology to the way their customers behave if they want to do the same. When we have inclusive, diverse teams, we understand humanity more richly and are able to respond to shifts in behavior, preferences and trends quickly, without the ramp-up time it may take a 20th century firm.
Trust is Huge With with Digital Consumers
It’s not difficult to understand why trust is so important to today’s consumers and why it continues to be the most important driver of customer satisfaction. With fewer face-to-face interactions, and increased engagement with bots and other machines, relationships are more difficult to both form and nurture. People trust organizations that can demonstrate they understand them, anticipate their needs and innovate in a way that is customized perfectly to them.
A natural outgrowth of a diverse, inclusive culture is solidified bonds with consumers. The informal leadership and soft skills that are now celebrated instead of stifled stimulate internal behaviors, strategies and brand promises that inspire trust.
Trust, of course, has a direct effect on profit, too. Fortune found 24 percent higher revenue growth among the 50 companies named to its Best Workplaces for Diversity list.
Effectively Prioritizing and Managing Culture Change
A big part of transforming culture is getting the right people in place to move the firm forward. Transformations that focus on people are the ones that drive productivity and profits to ultimately outperform the competition. The most successful firms have been intentional about fostering diversity and inclusion across the organization. After all, trust often comes from having a shared cultural, spiritual or societal bond.
If employees don’t reflect the consumers they serve at every level of the organization, there can be a disconnect, or worse, a trust gap. What’s more, a diverse workforce brings broader thinking, creativity and perspectives to the strategic planning table. Collaborative talent pools made up of a broad variety of men and women from backgrounds and cultures far and wide often have greater empathy for the consumers they serve. These teams hold an advantage in anticipating the holistic needs of consumers to
build imaginative solutions that solve their challenges more completely.
So, how can credit unions on the digital transformation journey incorporate diversity and inclusion objectives into their roadmaps?
First, assess where you’re at today.
Gather your teams and perform a state-of-diversity review of the cooperative, as well as its strategic partners, board of directors and field of membership. Which areas of the credit union are led by people of similar backgrounds? Which areas house a strong mix of leaders representing different consumer segments? Which member segments are you serving well and which
are you missing?
Second, set measurable goals.
As with any business initiative, those in charge of execution have to know what success looks like. Determine how you will make changes, where you will make them and how long they are likely to take. Check in quarterly and don’t be afraid to make adjustments as you discover new challenges and opportunities in your diversity and inclusion efforts.
Third, create a diversity and inclusion workgroup.
This should be comprised of senior leaders who will not only advocate for diversity and inclusion throughout the cooperative and its reach, but will also oversee the execution of your agreed-upon strategy.
Fourth, be transparent.
Start by sharing the goals of your initiative with the entire cooperative, using your state-of-diversity report as a basis. This will not only generate enthusiasm across the organization, it will set the stage for accountability.
The digital transformation of the movement hinges on credit unions becoming stand-out financial technology brands. And, with the help of committed partners like CO-OP, you are on your way. As we push through our collective transformation, let’s remember credit unions are champions of social change. When it comes to diversity and inclusion, there’s a lot of change needed. Today, less than five percent of the tech workforce is comprised of non-white people. Less than a quarter are women.
As you select the candidates, leaders and advocates that will set and execute your diversity and inclusion plans, keep in mind the human qualities that will be of greatest help to your digital transformation. The fourth industrial revolution is pushing technology forward in quantum leaps, and like it or not, machines are taking over many of the skills we’ve mastered. In many cases, artificial
intelligence and machine learning are performing those skills exponentially better than mere mortals ever could.
Ask yourself, what are the qualities and attributes we need to adopt today to ensure success in a workforce where humans are working alongside machines?
What you may find, as CO-OP has, is that many of the qualities that have historically been dismissed or repressed have actually become instrumental to growth. As top-down, regimented, command and control leadership has revealed itself as stifling to imagination and stagnating to growth, soft skills like empathy and collaboration are rising to the top as sought-after qualities.
The new CO-OP has refreshed its executive and senior management teams. In doing so, we’ve kept a keen eye on the future. Our focus is less on the skills machines will be replacing and more on the skills gap they are leaving . Our leaders are true reflections of the credit union personnel and the members we collectively serve. We are proud to have a 50-50 executive management team that is not only equitable on gender but that also brings to our firm a set of cultural and societal backgrounds. Credit unions, too, are making tremendous progress.
Samantha Paxson is Chief Marketing and Strategy Officer of CO-OP Financial Services. She can be reached at Samantha.firstname.lastname@example.org.