Thursday, August 24, 2017

Three Digital Characteristics to Accelerate Change

The digital transformation, like the computer technology revolution itself, is a long journey.

Digital makes a significant impact on almost every aspect of the business from people, process to technology, both horizontally and vertically. The digital transformation is now spreading rapidly to enable organizations of all shapes and sizes to reinvent themselves. The purpose of such radical digitalization is to make a significant difference in improving organizational efficiency, effectiveness, responsiveness, and maturity. There are three needs in an organizational setting which are embedded in the format of digital “characteristics,” to accelerate business transformation.

Self-determination: The digital aims of the organization are to determine what the future needs to look like and what the transformation must look like, how to overcome roadblocks, avoid pitfalls, and deal with change inertia. If you want meaningful change in an organization, it will not really happen until you get buy-in and sponsorship from senior management and participation from bottom up. Without this, you will get chaos and some temporary change, but unable to sustain it, and you cannot build change as an ongoing business capability. After determining, it is also important to create a change roadmap for getting from the current mess to the desired condition. And then, determine constraints, decide what should be done, assign responsibility, and estimate completion. Digital transformation is a long journey, to keep the team motivated, it is also important to create the opportunity for small but meaningful gains. Break the big plan into meaningful small chunks so that people are willing to take calculated risks and readily measure progress as well. With self-determination, a high-mature organization not only discovers the business purpose but also helps their employees discover the purpose of unleashing the talent potential. And there are no shortcuts to getting to that state, it’s a process and it takes time and a real commitment to getting there.

Self-organization: Digital organization is like the living system. Self-organization comes from chaos theory. Living systems are self-organizing. Human systems are living systems, therefore, human systems are self-organizing, by definition. From the business management perspective, self-organizing is about trust and empowerment, to encourage autonomy, discover, and mastering. The problem of traditional organization is the overly restricted organizational hierarchy and command-control management style which often discourages growth and self-renewal and diminish trust. And it is the root cause of many business issues such as low employee engagement, lack of innovation. The complication of traditional organizations is caused by layering, units, hierarchies, fractal structure, and the difference between the interest of a unit and those of its subunits. In the lower mature organizations with silo thinking and command-control style, most managers are impeding progress up the pyramid rather than helping their people reach the summit. On the opposite, self-organization will occur naturally and most of the time without, or in spite of, external direction. The team is self-organizing in being disciplined enough to do the work. You know the team will deliver the best outcome and give them the freedom to do it on their way, and keep them engaged to discover the alternative solutions and encourage innovation.

Interdependence: Humans progress has gone through three stages: dependent, independent, and interdependent. The “organizational design problem” would be to build a great mix of organizational elements that enable the organizational interdependence, enforce cross-functional communication and collaboration. What works and what doesn´t, depends on the nature of the organizational interdependence that needs to be enabled. The collaborative inter-dependent organizations reach a higher state of business maturity. Because limited hierarchy works best in a creative environment where the free flow of ideas and their prompt implementation is a key element of success. The advanced digital technologies blur the functional border, organizational border, industry vertical border and knowledge domain border, thus, digitalization means hyper-connectivity, over-complexity, and interdependence. There is a typical interdependence that leads to conflict, for example, Sales wants to sell more, production cannot produce at the pace of sales manifests. Another type of interdependence is symbiosis. Big companies need small strategic initiatives for engaging in disruptive innovation, and those small strategic initiatives need a big company's culture, values, and financial backup. Thus, to gain the in-depth understanding of interdependence, it is important to apply System Thinking to view the digital organization as an interconnected and interdependent whole; and how to follow systems principles for solving problems in a structural way under complex, uncertain and ambiguous circumstances.

The Digital transformation, like the computer technology revolution itself, is a long journey. The outlines of the fully digitalized world have long been sketched, now the phenomenon of digital is reaching the inflection point, yet we are now entering an even more rapid and extensive period of change. Dealing with the challenge of digital transformation requires an accelerated digital mindset, strategic roadmap, end-to-end business solutions, changeable people, flexible process and innovative technologies.  


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