Saturday, June 16, 2018

Softening the “Hard” to Accelerate Digitalization

Digital transformation represents the next stage of business maturity, which will improve how the enterprise works and interacts with its ecosystem, with people at the center of its focus. 

Organizations across the industrial sectors are on the journey of digitalization. Being “digital ready” goes beyond just applying the latest digital technology, it is a holistic effort and multifaceted discipline to touch every aspect of the business. There are many tangible and intangible variables to decide the ultimate success of business transformation. The purpose of such radical digitalization is to make a significant difference in improving organizational effectiveness, responsiveness, performance, and maturity. There is the need to “harden the soft or intangible business factors,” as well as the demand to “soften the hard business factors” in order to lead change frictionlessly and make a digital leap effortlessly.

The “hard” technology can create such soft touch, to make people feel better about themselves and build a people-centric digital organization: The powerful and lightweight digital technologies brings unprecedented digital convenience for both businesses and our personal life. The “hard” technology is the means to end, not the end itself; it must create soft touch for either engaging employees or delighting customers. As the saying goes, "People don't care how much you know until they know how much you care." Digital is the era of people. People’s feelings need to be addressed. To build a creative, productive, and happy workplace, the technology-enabled democratic processes will overtake silo-based, hierarchical control management methodology. Organizations are reshaped to be horizontally expanded into the holistic digital ecosystem. Many companies have never been better positioned to engage in multi-industry collaborations, but leading organizations have broken out of the static industry box, treat customers, partners and other industry ecosystem participants as active agents for brainstorming new ideas, co-solving critical common business problems, and creating new business models, etc. Instead of being rigidly grouped around a specific business, ecosystems draw together mutually supportive companies from multiple industries that collectively seek to create differentiated offerings and capture value they could not reach alone. The hard technologies create soft touch that people feel better about themselves, employees feel more meaningful about their work; customers have the delightful experience, shareholders are satisfied with what the business has achieved. Digital leaders do not just push harder; but emphasize participation, relationship, communication, collaboration, and innovation, and ultimately build a people-centric digital organization.

Business assets are no longer just about physical or hard stuff such as building or devices; it is critical to managing information - the soft business asset extremely well: Organizations have both tangible or physical assets and intangible or soft assets which enable business operating smoothly and build the competitive business advantage. All forward-looking organizations declare they are in information management business. Information becomes one of the most invaluable business assets besides people. Because companies across sectors around the globe transform themselves into the digital powerhouse that is based on information, and the business’s ability to explore soft assets has become far more decisive than their ability to invest in and manage physical assets. Information management competency, especially the ability to capture business insight and make the continuous improvement with consistency is the soft asset by which organizations can differentiate themselves from competitors, in order to reach the next cycle of the business growth and organizational maturity.


Soften the overly rigid organizational structure and processes to streamline business flow: Digital means flow, information flow, idea flow, and business flow. However, many traditional organizations have the inflexible pyramidal hierarchy and overly rigid organizational structure and processes, which stifle changes. Thus, it’s important to soften the hard processes or structure, the functional borders to ensure digital fluidity. Organizations, like individuals, need to be in flow to be fresh and adapt to change seamlessly. From an organizational structural design perspective, delayering becomes a lens through which it is possible to examine and then fix many other issues. An organization can approach such a flow zone when people are ready for moving to a fluid structure. On the business navigation dimension, digital flow can be streamlined by enforcing cross-functional communication, using common business language for harnessing understanding, taking incentives to encourage idea sharing. Forward-thinking organizations also experiment with different types of organizational structure to harness strategic business alignment, enablement, collaboration, and harmony.

Digital transformation represents the next stage of business maturity, which will improve how the enterprise works and interacts with its ecosystem, with people at the center of its focus. It takes both a hard push and soft touch. The outlines of the fully digitalized world have long been sketched, but the shape, size, and color of digitalization keep evolving. The key is not to choose one path over the other, but to tailor your own path, mix the hard and soft, tangible & intangible, practice, practice, and practice more to make a seamless digital paradigm shift.

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