Friday, December 11, 2015

Digital Master Tuning #115: Three Big Pitfalls in Digital Transformation

The wisdom of the wise, and the experience of ages may be preserved by quotation. -Isaac D'Israeli

Digital makes a profound impact from specific function to business as a whole, the purpose of such radical digitalization is to make a significant difference in the overall levels of customer delight and achieve high performing business result. High mature digital organizations have high-level digital capabilities not only to build digital innovations but also to drive enterprise-wide transformation. However, there are still many roadblocks on the way, and numerous pitfalls to fail the initiatives. Here are three huge barriers in digital transformation, and stop businesses from speeding up and improving agility and maturity.

“Culture eats strategy for breakfast.” Peter Drucker First, culture in a company is a collective mindset, attitude, and top-down behaviors and action. The spirit comes from the top. The core of culture has to do with the way people are treated. For example, a good culture requires respect, responsibility, self-discipline, autonomy, mastery, and purpose. Contrast that with a typical corporate culture, which is bureaucracy, centered around control, distrust, external discipline, dependence, and hierarchy. The systems, processes and so forth are the clear manifestation of the leaderships' culture. It is the culture that clearly impacts how those policies, procedures, and rewards that drive behavior. It takes leadership to move things in a new direction and to do that without cultural awareness would just cause the leader to likely run into the same brick walls past leaders have encountered. For example, an organization with a culture of autonomy trust their staff and encourage innovation, and take calculated risks. The focus is based on what you accomplish with flexibility. You can't build true respect unless everyone is seen as a valuable contributor. That means everybody who does the same job is treated the same. No matter what leaders/managers say about values, mission, etc. the behaviors they reward are the clearest indication of the culture they are trying to put in place and they drive and reward those behaviors through the implementation of KPIs, policies, processes, etc. Culture management is an interdependent ecosystem that includes many business factors: The company goals, policies, internal control requirements, customer experience improvements / customer satisfaction, etc., all should be synchronized without compromising the need of any item, staff want to be involved in developing policies and procedures to achieve the organization’s goals, but this has to be meaningful involvement and be seen to be meaningful.

A bad system will beat a good person every time.” W. Edwards Deming. Either silo thinking, silo management style, or silo processes are outdated because now businesses are always-on, hyperconnected, and interdependent, when silo or bureaucracy manipulates the corporate world or beyond, the talent potential couldn’t be unleashed, and the differentiated business capabilities couldn’t be built up, and business culture wouldn't be innovative. When individual and departmental outcomes are measured, the walls go up. In other words, what are the organization's rewards and recognition structure perpetuating? Differentiated performance metrics and rewards systems tend to bring this shift in perspective about, but they too are a necessary aspect of how an organization operates -- until they become counter-productive and have to be changed. When the collective outcome is the focus, the silo walls collapse. The bad systems are also possibly caused by complicated processes or unnecessary complexity. The complexity can be good or bad for businesses depending on your strategy and capability. Complexity Management is the methodology to minimize value-destroying complexity and efficiently control value-adding complexity in a cross-functional approach.

People are the weakest link in businesses. The multi-faceted talent practitioners need to handle talent paradox: Are employees truly satisfied? Or are they simply accepting their fate by staying with their current employers because of a difficult job market? Employees who believe their employers make effective use of their talent and abilities appear to be overwhelmingly committed to staying on the job, while respondents who said their job does not make good use of their skills are looking to leave. Due to the globalization of the economy, companies must be nimble in managing talent to have the right people in the right place at the right time. The talent practitioners must be capable of becoming:
Energizers—capable of breathing new life and energy into their organizations
Culture propagators—able to design people policies and processes to build a winning culture.
Change agents—able to instill in employees the beliefs, values and basic assumptions required for the organization to succeed.
Innovators - able to bring the new perspective, and come out the new/alternative way to do things

Keep in mind of these witty quotes discussed above. Dynamic and changing digital organizations cannot thrive with static or negative culture, silo or over-complicated processes and systems, or complacent, unchanging people. Digital is all about change and exploring! Always frame the right questions before answering them, ensure doing the right things before doing things right. The business will be more successful when they realize that one of their greatest strengths will be their change capability to remove the barriers and lead digital transformation seamlessly.

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