Thursday, November 9, 2017

Three Missing Links in Digital Transformation

It is important to reconnect the missing links, strengthen the weak links in the organization to run a hyperconnected and interdependent organization.

Digital Paradigm means holism, hyper-connectivity, interdependence, and integration. Digital transformation is not just a one-dimensional stretch, but a multi-dimensional expansion. The digital ecosystem expands when the digital business territories blur and the business communities broaden their scope and consume all sorts of resources. However, for those digital lagging organizations, the ecosystems have evolved without much attention of planning and having multiple missing links. So, to shift from "Doing Digital" to "Being Digital," the real challenge is to understand what are exactly those missing links, where and how you can and should connect all important dots, improve to get the biggest effect and scale up across the digital ecosystem effortlessly?

The missing link to cross-functional communication: Digital means hyper-connectivity and interdependence. At the business level, silo creates barriers that surface between different departments within the organization, it further causes miscommunication between varying shareholders, between top management and the rest of organization, between various business functions. With missing link to communication, it easily creates the gaps and leads unhealthy internal competitions for limited resources, causing people who are supposed to be on the same team to work against each other. More specifically, communication gaps are caused by cognitive difference, ambiguous process or management bottleneck, or commonly known as “Lost in Translation” syndrome - which is caused by mistakes most organizations make in business communication that fails to translate the high-level language of strategic management into the professional language of various staff specialty for execution. All strategies must be communicated to individuals by "translating" the objectives into actions according to the individual's role and abilities. Often, objectives are not actionable because they have not been communicated properly to the people who are responsible for their delivery. How do you expect organizational performance unlocked if you do not link the organizational objectives to individual objectives? Strategic alignment and cascading communication establish a system to overcome. In fact, communication strategy, framework, mechanism, and style, etc., are all important to bridge the gaps and reconnect important links.

The missing link in holistic IT management: The disconnect between the business and IT is still one of the biggest root causes to fail IT and business as a whole. Because nowadays, digital organizations can respond to the ever-changing environment dynamically based on information, and digital technologies bring unprecedented convenience and deeply influence on how we think, live, and do business. The point is that information management is not just the business of the IT department, it is the responsibility of the entire company. The missing link in holistic IT management can further cause change inertia, stifle innovation and idea flow, and make businesses missing opportunities to innovate and accelerate. Because people do not have all the information needed to do their work. To unleash the full potential of information, IT is not a function that can be handled only in the IT department or by IT managers. Without support from top leadership and business, IT does not have all the mechanism and authority to collect information and they do not have all the skills necessary to evaluate and process information. Without business insight captured from information, companies cannot respond to changes, to grasp business opportunities timely or prevent risks effectively.

The missing link of systematic innovation management: Digital is the age of innovation. Innovation is a disciplined approach to discovering and building opportunities in creating new meaningful sources of value to targeted users. Innovation is no longer “nice to have,” but must have the business competency to stay relevant. Often, there is the missing link between strategic management and innovation, and innovation is simply not on the business executives’ radar screen in many companies. It is important to look at innovation from the perspective of developing business-wide innovation capabilities. The organizational management short-sightedness and running the business in a transactional mode can only cause digital ineffectiveness in the long run. Digital innovation shouldn’t be just serendipity, that the best point of view is to see innovation as a system, capable of delivering organization-wide capability. And innovation has three phases: Discovery of a problem or new idea, designing a prototype solution and the ultimate delivery of a commercially astute outcome. There are many areas within a company where the innovation process can be applied in a structural way to create value, including both “hard” innovation such as products/services/processes/business model innovation and soft innovations such a communication/culture/management innovation. Building a balanced innovation portfolio is a practical approach for optimizing resource and enhance the link between strategic management and digital transformation. Innovation is the sustainable and scalable way that can be learned and practiced. Because how an organization orchestrates to generate ideas, manages the activities, measures the results, etc, is determined by how that organization has decided to craft the innovation effort and build innovation as differentiated capability.

It is important to reconnect the missing links, strengthen the weak links in the organization to run a hyperconnected and interdependent organization. Digital transformation is the radical change, it cannot be just another thing that needs to be accomplished. It has to be woven into the collective mentality, process, action, and communication of the organization. And it can only be achieved via a dynamic strategy-execution-change life cycle and iterative change continuum.


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