This briefing document summarises the key themes and findings of a research paper that investigates the influence of employees' cognitions (specifically, psychological safety) and behaviours (employee-led process improvement) on data-driven digital transformation and ultimately, operational productivity.

• Socio-Cognitive Theory as a Framework: The study employs socio-cognitive theory, which posits a "triadic relationship between social environment, human cognitions (personal processes) and behaviours (outcomes)" to explain how employees' psychological safety (a cognition) influences their engagement in employee-led process improvement (a behaviour), leading to organisational attainments like data-driven digital transformation and improved operational productivity.
• Psychological Safety as a Key Driver: The research defines psychological safety as a "'shared belief held by employees that their work environment values their contributions and talent, and is safe to ask questions, ask for help, share views, knowledge and concerns, and admit making mistakes without the risk of being penalised'" . The authors argue that a psychologically safe environment encourages mutual respect, trust, and the willingness to share ideas, crucial for collaboration and continuous improvement.
• Employee-Led Process Improvement as a Behavioural Outcome: The study defines employee-led process improvement in a hospital setting as a "'set of social practices that encourage team-work, empowerment and process/quality improvement in a hospital environment'" (adapted from Narayanan et al., 2022).
• Data-Driven Digital Transformation as an Organisational Attainment: This is described as the "use of digital technologies and the data these digital technologies produce to introduce significant improvements and changes to operations, strategies, and customer experiences" (Papanagnou et al., 2022).
• Operational Productivity as the Outcome of Interest: Defined as the "ratio of the total output about the total input in any transformation process" (Ong et al., 2021), operational productivity in a hospital setting reflects "'operational capabilities that target the efficient use of resources and the input-output ratio'" (adapted from Shah and Ward, 2007).
• Managerial Implications: The findings underscore the importance of viewing employees as key stakeholders in digital transformation initiatives, shifting the focus beyond purely technological solutions.
• Management should prioritise creating a social environment that fosters psychological safety to encourage employee engagement, risk-taking, and open communication, which are vital for both process improvement and successful digital transformation.
• The identification of different pathways (individual and serial mediations) guides resource allocation and strategic interventions to enhance operational productivity. Implementing strategies to improve psychological safety can lead to operational benefits through fostering employee-led improvements and facilitating the adoption and effectiveness of data-driven digital transformation.
• The study suggests that a holistic approach, considering both employee-led initiatives and data-driven technologies within a psychologically safe environment, will maximise the positive impact on operational productivity.

Source: Excerpts from Malik et al. 2024 "A socio-cognitive theorisation of how data-driven digital transformation affects operational productivity?" Free version available at https://www.sciencedirect.com/science/article/pii/S0925527324002603