Saturday, June 4, 2016

"CIO Master" Book Tunig XXII: Running IT with Digital Equilibrium

Digital equilibrium is the optimal state of operational excellence, business agility, and maturity.

Organizations large or small on the journey of digital transformation, as we move from using technology as a vehicle to maximize efficiency and minimize costs to using technology as an enabler and catalyzer of totally new business models and growth. IT needs to strike the right balance between innovation and stability, new way to explore emergent digital opportunities and keeping the lights on fundamental, information flow, and risk management. More specifically, how to run IT with digital equilibrium?

Digital strategy execution continuum: In the industrial era, business strategy execution are linear steps in a considerably static business environment. However, with increasing speed of change, digital strategy execution is an iterative continuum; it’s important to take strategic continuity with continual improvement in realization over time. Digital equilibrium is achieved through balancing the short term gain with long term win. On one hand, it is very easy to continuously be caught up in execution with weekly, monthly and quarterly results. It is what keeps your customers satisfied and maintaining quality delivery, and profitability on the immediate basis. In order to adapt to the accelerated changes, it is also important to take strong quarterly updates on progress and sanity checks on the long-term strategic plan, because there’s always a paradox, If you never look up, you miss the large bus that is headed in the right direction. From IT management perspective, IT historically has had poor communication accountability within IT or between business and IT.  IT - Business communications sometimes seem like an oxymoron.The IT leaders usually play the role as a translator between the business and IT;  they must straddle concepts and translate language between the business and technical staff, to avoid “get lost in translation.” To enforce digital equilibrium, IT leaders need to build the capability, not only communicate, but connect, inspire and motivate. Communication is important, however, what is even more important is the ability to connect. The ability to inspire and motivate; the ability to help people achieve their goals and objectives; the ability to help people overcome their challenges and more importantly; the ability to help people navigate through difficult change, to keep information and talent flow with equilibrium.

Digital equilibrium is achieved via the harmony of Strategy, Structure, and Business Performance: There is a key difference between digital and industrial organizations: In industrial organizations, the structure is rigid and hard to change. In an environment where change is constantly happening, that handicaps the organization; In the emerging digital organizations, the business leverage digital technologies and tools in enforcing holistic thinking, cross-functional collaboration and dynamic processes and case management. The correlation between strategy, structure and performance can be figured out via asking a series of questions such as, how much does the strategy impact on business performance? How much does the structure impact on business performance? What is the cause and effect relationship between strategy and structure that impact on business performance? Both top-down strategy and bottom-up innovations can work together if there is an explicit linkage between all related artifacts: strategy, business objectives, capabilities, projects, etc. Fine tune business processes to build a differentiated set of business capabilities for implementing a dynamic digital strategy and achieve high business performance.

Keep the balance of IT stability and speed: Digital means flow, digital IT has faster speed. So you have to strike the right balance between stability and agility. Technology enablement is always about planning, funding, designing, building, operating, securing, optimizing and balancing. To enable digital equilibrium, the terms strategic planning and agility need to achieve such contradictory coherence. Even in the fluid world of IT, if you are unable to commit to technical directions for long enough, you'll never be able to develop and maintain a capable staff to execute. Therefore, IT also needs to strike the good balance between stability and agility. One one hand, build a highly skillful IT workforce and collective human capability to execute strategy, on the other hand, agility is a digital capability to create necessary change and adapt to change nimbly.

Digital equilibrium starts with the peace of mind, it’s achieved via cross-functional communication and collaboration, a healthy innovation portfolio, seamless information flow, antifragile processes, and effective strategy-execution-change continuum. It is the optimal state of operational excellence, business agility, and maturity.


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