Tuesday, August 8, 2017

Apply Holistic Management to Drive Digital Transformation

Applying holistic management discipline is to break through the industrial constraints and limitations and in pursuit of possibilities rather than impossibilities

Over the last couple of decades, businesses have been faced with increasingly complex and pressing problem-situations, embedded in interconnected business ecosystems operating in dynamically changing environments. In addressing these problem situations and working with their relevant systems, business leaders and managers have learned to recognize the limitations of the perspectives, methodologies, and tools of the traditional scientific orientation and management discipline. Digital implies the always on and hyper-connected business nature with "VUCA" characteristics. Thus, management innovation becomes inevitable. Holistic management (a Greek word meaning all, whole, entire, total) is about applying Systems Thinking to manage resources, recognizing initiatives which take a comprehensive, anticipatory, and design approach to radically advance human well-being and the health of business ecosystems. But more specifically, how to apply holistic management for driving digital transformation?

Many industrial organizations are inside out, process driven; but digital organizations are outside-in and customer-centric: Traditional management runs in silos; silos introduce lots of delays, waste, queues, and bottlenecks. In practice, the reductionistic management methodology often puts too much focus on the mechanical side of the business, to assume the business is just the sum of its multiple functions, it causes silo thinking spreading at the different layer of the organization; it creates gaps existing across functional, industrial and geographical borders, and there are overly rigid processes and organizational pyramid which cause bureaucratic management redundancy. Generally speaking, the negative side effects of traditional management styles are distrust, disengagement, and disempowerment. Just consider the time/energy/money wasted by the patterns of blaming others. So, it is evolutionary to shift from inside-out traditional management style to outside-in and people-centric digital flavor, focus on problem-solving and create the business synergy. Avoiding the negative management patterns begins with the belief and understanding behaviors have ripple effects that we all tend to be drawn into situations which encourage us to learn and grow, and ensure the organization as a whole is superior to the sum of pieces.

Organizations can be more effective in executing the strategy by relying less on silo functions, more on cross-functional collaboration and continuous improvement: Digital organizations arise when the scale of the interrelations, interactions, or inter-relational interactions surpasses the silo-based organizational capacity to be able to do whatever it does with smaller scales. There are both hard issues and soft factors to stifle change and decelerate performance. The “hard” issues to stifle organizational performance is that the systems/processes/technology many organizations are using to manage the business are becoming inefficient in this rapidly changing world with the high degree of digital convenience. It is also important that many companies approaching the subject, have the objectivity and humility to realize that their system or processes are out of date. Thus, the soft elements such as communication, collective attitude or culture would either lift changes or drag down the speed of digital transformation. Digital management styles include: Interrelational management processes being developed to help reduce the tensions, frictions, and conflicts that arise; interactional management processes being developed to help communicate objects and concepts with clarity and welcome two way feedback; and inter-relational interactions management processes being developed to help communicate concepts that are being used, or that are wanted by other parties for harnessing relationship building. In practice, digital organizations today apply a hybrid approach to strive for applying good practices to fit different circumstances and scenarios.

The holistic management focuses on the long-term and transformative business management practices: Digital is full of uncertainty, velocity, complexity, and ambiguity. The organizational management short-sightedness and running the business in a transactional mode causes digital ineffectiveness in the long run. To avoid the trap of nearsightedness, the long-term business plan needs to be a cross-functional collaborative effort, not something one team does alone in a corner, in order to improve the entire digital business effectiveness. Digital transformation is a long-term journey, to move up the organizational maturity level, businesses need to shift from transactional mode to transformational mode. Cross-functional leadership team needs to discuss with the business on how it can facilitate, enable and catalyze the business growth, make continuous changes and innovation. Bridging the innovation execution gap requires a systematic execution scenario with clear-defined stages, decision-making parameters, performance thresholds, metrics definition, combined with the iterative learning process and organizational structure that supports wide-ranging exploration at each stage. The goal is to drive the long-term digital transformation effort.

A digital organization can bring greater awareness of intricacies and the systemic value of organizational systems, business capabilities, people dynamics, resource alignment, or technological touches. Applying holistic management discipline is to break through the industrial constraints and limitations and in pursuit of possibilities rather than impossibilities, to drive changes and accelerate digital transformation.


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