Saturday, September 17, 2016

Three Characteristics of Digital Organizations

One of the key determinants of whether an organization can move to the digital new normal is the digital maturity of its people.

Organizations large or small are on the journey of digital transformation. Digitalization implies the full-scale changes in the way the business is conducted so that simply adopting a new digital technology may not be sufficient. You have to transform the company's underlying functions, processes, and cultures, and organization as a whole with adjusted digital speed. Otherwise, companies will begin a decline from its previous good performance. More specifically, what are the characteristics of digital organizations, and can you make an objective self-assessment whether your organization is a Digital Master or a laggard?

Fluidity: Digital means flow, data flow, information flow, knowledge flow, mind flow, and business flow. Organizations, like individuals, need to be in flow to operate smoothly. From information management perspective, a high intellectual and high effective digital organization has a higher level of decision effectiveness because information can flow into the right people to allow them making right decisions at the right time to bring better result; from knowledge management perspective, Knowledge Management is a process to manage known from flowing. there is a shift from  traditional, often static knowledge management approaches to techniques that involve enhancing the "flow" of knowledge within an organization to improve access and use. Knowledge is information put to use, The integration of Information Management and Knowledge Management will enable not only information flow and knowledge flow, but more importantly, it will empower mind flow, and business flow, to improve the business dynamic and agility. From an organizational structure perspective, an organization achieves this state of equilibrium through its management layers. Delayering becomes a lens through which it is possible to examine and then fix many other issues. In other words, an organization can approach the flow zone when the positions in its hierarchy have clear, accountable tasks. The latest enterprise social platforms and collaboration tools make it practical to break down functional silos and improve cross-functional communication and collaboration.

Hyper-connectivity: Digital is about connectivity, it means to have the better ability for dots connection across the geographical, functional, organizational, industrial, or generational boundaries. Digital is the age of innovation because creativity is about connecting the dots in the wider scope. How cleverly you connect your dots by leveraging your experiences and finding a solution to the problems is creativity which is also an important aspect of digital fluency. Creativity In life we come across various experiences (exposure to various situations) as wider dots, the more dots you have, the better chance your mind can connect them freely. Digital workforce today is hyper-connected and divergent in many ways, share a natural affinity for new perspectives, innovations, and collective wisdom. Hyper-connectivity brings both the abundance of opportunities and unprecedented risks, hence, being connect-wise means to discern the trend from fads, seek business values before taking business initiatives, to build a high-innovative digital powerhouse.

Complexity: Due to the “VUCA” nature of digitalization, business complexity is unavoidable. In fact, complexity has increased exponentially and has become the part of digital new normal. Digital is also complex, it becomes complex if things do interact, particularly in the case of "non-linear" interaction, you can't separate things properly or you cannot predict the actual effect of interaction straightforwardly. Imagine the complexity that comes in due to these characteristics (less structure, rules and regulations, diversity, volatility, ambiguity, unpredictability, lack of linearity and increased flux) working and impacting together. The complexity can be good or bad for businesses depending on your strategy and capability. There is no intelligence without the certain level of complexity, complexity is a property of intelligence. However, complication or unwanted complexity will stifle innovation and decrease productivity. From management perspective, typically look at complexity from a business impact perspective as well as from a solution perspective, complexity usually involves early in the life-cycle and careful examination of numbers and types of stakeholders across the organization; the extent to which the project is considered to be either strategic or tactical; the extent to which the project will change or transform (target end-state and impact) the business; numbers of external dependencies. Companies that are skilled at managing complexity can gain advantages by pushing the boundaries of a more sophisticated business mix that provides opportunities to create inter-business value, differentiated digital capabilities and the unique set of business competency.

One of the key determinants of whether an organization can move to the digital new normal is the digital maturity of its people. If the digital organization is a living body, every individual is like an active cell to keep growing and flowing as well. So part of the digital transformational journey is to prepare people for the new structures and to recognize this is a crucial step. People have to be ready for moving to a fluid structure, hyperconnected state and get used to the complex digital ecosystem. Following the “Keep it Simple” principles to achieve digital equilibrium and achieve high-performing business results.


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