The First Step to Building a Culture that Embraces Digital Transformation

“Every time we bring a new technology into an organisation, we invariably change its culture and affect its structure.”

Everyone who sets out to create a new technology believes that it will drive progress. As more AI and digital technologies are deployed into the workplace, the question has arisen: why isn’t this leading to more positive outcomes?

I have yet to work with an organisation that hasn’t been discussing or pursuing  digital transformation in some shape or form. Some firms still define this buzz phrase as the automation of processes. Some see it as changing their business model to become “platform driven”, while others talk of creating a “digital customer experience.” Whatever the aim, at many companies the conversation is framed around: “Which technology should we use? How does it work? How can it improve what we do?”

But far less discussion is devoted to the cultural changes that come with transforming how a business works. These tend to be experienced as unintended consequences. It just so happens that employees feel less recognised by their employer, for instance, and / or more overwhelmed by their work. This is something that all of us need to understand better. Over time, as we bring a new technology into an organisation, we invariably change its culture and affect its structure.

If business leaders do not fully consider and manage the cultural implications of a new technology before it’s adopted, the risk is staff disengagement and a decline in productivity – the very opposite of what was intended. According to research by Gallup, business units with low rates of employee engagement are 21 percent less profitable than those with highly engaged employees. Its State of the Workplace report revealed in 2025 that 77 per cent of employees were either “not engaged or actively disengaged at work”, costing an estimated $8.8 trillion in lost productivity in that year alone.

Given the potential cost of cultural damage from a poor digital transformation strategy, what can business leaders do to prepare their organisations better? First, it is crucial to note that many media outlets have contributed to a negative view of new technology, spreading fear that a wave of disruptive automation and AI will take away people’s jobs and value. If you accept that narrative, you implicitly also accept the notion that we can’t shape AI and digital transformation. That is wrong, but as a leader you must appreciate that your employees may have some background anxiety and / or skepticism about technological change. One of your key tasks, therefore, is to reframe the narrative around technology for your organisation. Start with addressing questions such as: what do you mean when you use the phrase digital transformation in your organization? What is your vision of how your organization will deliver value in an AI-driven world? And as you outline the transformation you envision, provide in equal parts a vision of the technological changes as well as the cultural changes. Because your job as a leader – above all else – is to bring everyone along with you on every step of the AI and digital transformation journey.

This article was originally published by Director Magazine (UK) and is republished here with minor updates. You can find a more elaborate version in the “Fast Forward Files Volume 2: Changing Perspective“, a compendium of essays on future-critical issues as diverse as leadership, genetics, psychological profiling, marketing, health, memory and more, exploring how we live, work and collaborate today, tomorrow and beyond.