Sunday, January 22, 2017

Tuning Organizational Structure to Improve Digital Ready-ness

Change can flow on the surface whereas digital transformation needs to permeate into business vision, strategy, culture, communication, process, etc.

Organizations across the vertical sectors and geographical boundaries are on the journey of digital transformation. New generations of digital technologies such as digital collaboration platforms and tools are enabling not only the structured processes of the past but also the unstructured processes of the digital enterprise. The future of digital organizations would be complex enough to act intelligently and nimble enough to adapt to the change promptly.

Improving changeability: The very characteristics of digital is the increasing speed of change and hyperconnectivity. Everyone has a valuable contribution to make at whatever level in the formal hierarchy they happen to be placed, the goal for optimized organizational design is to get the mass collaboration, innovation through less hierarchy, cross-functional insight and adopt the robust processes designed for improving responsiveness and harnessing communication. Flatter structures will help speed up organizational response to changing markets. Digital means the increasing speed of changes, it means that the management needs to challenge convention and break down peoples' natural resistance to change or to new ideas; helping to deliver incremental improvements over time. It is about individual mental set-up too. Hence, inter-dependency is a premium stage. This also helps to improve digital workforce quality, reliability and also productivity; and it further fuels sustainable growth and jobs too.

Increasing consciousness: At the organizational level, self-adaptation is faster if made with the full involvement of people in organizational change, starting from relations between people. One of the key determinants of whether an organization can move to new digital structures is the development level of the people. At the individual level, the “incremental consciousness” about our own potentials is changing the way we see ourselves, our roles in a community: a team or a company. Understanding the people and the organization through a common lens then makes it possible to turn organizational “theories” into tangible management processes that use “relations between people” as the loom on which to create management structures and processes that support self-adaptive problem-solving and build “recombinant” business capabilities. So part of the digital journey is to prepare people for the new structures and to recognize increasing collective consciousness is a crucial step, in order to master the change and drive the seamless digital transformation.

Amplifying creativity: Limited hierarchy works best in a creative environment where the free flow of ideas and their prompt implementation is a key element of success. Organization structure and its impact on efficiency and innovation could play either a positive or negative impact. The bottom line is how well the organizational structure is being influenced by factors such as: Does the chain of communications flow easily or does it stop at one level? Can the right people get the right information to make the right decisions timely? Does the culture influence collaboration, cross-functional team application? Or does management endorse open source knowledge and mindset? Does innovation take the top down or bottom up; inside-out or outside-in approach? There are many factors that influence and have impact on innovation: Such as leadership, culture, organizational structure, people, technology, competition, market segmentation, roles and responsibilities, process and information systems, performance measures, etc, and these factors are interrelated, so people have to be ready for moving to a more fluid structure. Any ideas on what are the core qualities or competencies determine if one is ready for fluid structure.

Tuning organizational structure - either managerial hierarchy or information flow structure is an easy part. However, without considering the correlation of varying success factors of the businesses, change can flow on the surface whereas transformation needs to permeate into business vision, strategy, culture, communication, process, etc., in order to manage a high mature business with digital-ready-ness.


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