Thursday, April 27, 2017

Digital Organizational Design vs. Business Changeability

The digital transformation won’t happen overnight, and organizational structure optimization takes planning, experimenting and scaling up.

The very characteristics of digital are the increasing speed of change and hyper-connectivity. Digital makes a significant impact on every aspect of the business both horizontally and vertically. Forward-looking organizations leverage the latest technologies to fine-tune the organizational structure and improve business changeability. Organization design is the vehicle through which the business strategy is executed and defines the business environment in which the digital organization can reduce the organizational culture friction, improve the business changeability, maturity, and unleash its full potential.

The digital workplace is fluid, live, informative, creative and productive, flatter structures will help to speed up organizational response to changes: The goal for optimized organizational design is to improve cross-functional communication, mass collaboration, and bold innovation through less hierarchy, cross-functional collaboration. So large groups of people can interact and be able to divide and conquer a complex challenge to accelerate the solution in forming collective capabilities. The digital workplace needs to be designed to help employees at all levels within an organization, from top leaders to front-line employees, understand and develop their creative capacity to solve problems and exploit opportunities in new and innovative ways. Everyone has a valuable contribution to make at whatever level in the formal hierarchy they happen to be placed, and adopt the robust processes designed for improving responsiveness and harnessing communication, and increasing business agility via reducing process redundancy or resource wastes. Organizational structure and its impact on efficiency could play either a positive or negative impact. The bottom line is how well the organizational structure is being influenced by factors such as communication effectiveness, information fluidity, customer centricity, etc, to ensure the business as a whole is superior to the sum of pieces. Limited hierarchy works best in a creative environment where the free flow of ideas and their prompt implementation is a key element of business success.

Digital organizations have to adapt to the continuous changes via self-adaptability, self-renewal, and maintain the digital balance: The self-adaptive system is a system able to reconfigure its own structure and change its own behavior during the execution of its adaptation to environmental changes. Self-adaptation is faster if made with the full involvement of people in organizational change, without just making "big plans" or "blueprint,” but starting from relations between people. It is possible to see what enables a self-adaptive organism is an information-driven process and the fine-tuned capability to sustain it. It is important 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. The challenge for organizations is to manage its portfolio of relevant cross-border strategic synergies and organizational interdependence with the appropriate mix of enabling organizational elements, engaging digital talent and balancing effectiveness and efficiency. Or to put simply, maintain the right level of digital balance. In fact, striking the right digital balance is a never-ending business lifecycle.  

Digital organizations need to continually fine-tune a successful structure for improving people-centricity: Digital blurs the functional, organizational, and even industrial borders nowadays. Traditional hierarchical lines will phase out and a collective of business partners will emerge working collaboratively to set strategy and achieve organizational goals. The challenge for any business is to find a successful structure that helps to empower people, enforce iterative communication, and harness cross-functional collaboration to deliver better business results and unleash the full digital potential of the organization. New generations of digital technologies such as a social platform or other collaboration tools are enabling not only the structured processes of the past but also the unstructured processes of the hyperconnected digital enterprise. Because digital technology is highly powerful but nimble and lightweight, as the “superglue” to weave all necessary business elements into the building blocks of business capability and highlight the characteristics of “Changeable Organization.”

Organizations need to have an in-depth understanding of the gains and pains of organizational design and development. Very few organizations understand all the gains they will enjoy such initiatives in their organizations. Gains in profitability, changeability, learning agility, business growth, and innovation enforcement. The digital transformation won’t happen overnight, and organizational structure optimization takes planning, experimenting and scaling up. But it is the journey worthy of the effort to improve the overall business’s performance and maturity.


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