Monday, August 13, 2018

How to Fine Tune the Digital Organizational Structure

The very characteristics of digital organizations are fluid, flexible, informative, autonomous,  hyperconnected, innovative, and people-centric.

Tuning the organizational design and structure to achieve a high level of autonomy is the symbol of digital maturity. The majority of organizations are designed to improve functional efficiency in the industrial era. But digital masters move a few steps ahead, focus on shaping changeability, innovation, and people-centricity. However, the digital transformation won’t happen overnight, organizations need to have an in-depth understanding of gains and pains of organizational design and development, follow the digital principles to plan, experiment and scale-up for improving strategic responsiveness and structural flexibility of their business.

Design the digital organization to enforce people-centricity: Traditional organizations are process-driven, but digital organizations are people-centric. One of the key determinants of whether an organization can move to new digital structures is the development level of the people. Thus, the digital workplace needs to be designed to help employees at all levels within an organization from top leaders to front-line employees unlock performance, unleash their potential, improve their productivity and employee satisfaction. Digital organizations need to continually fine-tune a successful structure, create a business context where people can collaborate where they are empowered and respected. Get encouraged to develop their creative capacity to solve problems and exploit opportunities in innovative ways. So, part of the digital transformation journey is to prepare people for the new structures and to recognize increasing collective consciousness is a crucial step in order to drive changes. The challenge for any business is to fine-tune a successful structure that empowers their people, enforce iterative communication, harness cross-functional collaboration to deliver better business results, and unleash the full digital potential of the organization.

Design the digital organization around information & technology: The overwhelming growth of information and emerging lightweight digital technologies permeate almost every corner of the business. Running an IT-savvy real-time digital organizations means that companies should fine-tune their structures and design the digital business around information & technology in order to keep information flow, idea flow, and thus, business flow, and achieve business autonomy. Any business practice today is always a combination of people, process, and technology. IT is the linchpin for running a highly intelligent and innovative digital organization. IT needs to be embedded into the varying business functions and becomes part of the change mechanism. More importantly, IT is no longer an isolated supportive function, but a strategic business partner. The best way in which Change Management would help in a vertical sector, and would be tangible as well, would be to bring about technical changes in organizational design to reduce complications and optimize cost for achieving the tangible business value. Therefore, the future of organizational design should be fluid enough to streamline information flow and flexible enough to achieve business autonomy. With efficient digital social platforms and tools, organizations can break down functional silos, delaying becomes a lens through which it is possible to examine business responsiveness and effectiveness, and then fix many business issues which stifle changes and innovation, to enable the organization achieving the state of digital equilibrium.

Design the digital organizational structure to enable changes: The emerging digital era upon us is all about the exponential growth of information and the rapid speed of changes. Therefore, today’s digital organizations need to be highly responsive, flexible, and self-adaptive to the dynamic environment. A changeable organization is to create an organization in which change is the new norm and happens the whole time, thereby delivering faster and increasing market share, and ultimately becomes the business competency. From the organizational structure and change management perspective, digital favors hybrid solutions. Organizations need to be solid enough (based on a systematic framework and the certain degree of the hierarchical structure) to “keep things in order,” but also fluid enough (based on delaying and hyperconnectivity) to interact with the expanded digital ecosystem seamlessly. The goal for optimized organizational design is to improve cross-functional communication, mass collaboration, and changeability. Ideally, the two structures - hierarchy and relationship structure wrap around each other to ensure high responsiveness and accountability. Ultimately, digital organizations are becoming more flexible, able to navigate changes, and business complexity through creative problem-solving and innovation management practices.

The very characteristics of digital organizations are fluid, flexible, informative, autonomous,  hyperconnected, innovative, and people-centric. Tuning organizational structure, either managerial hierarchy or information flow structure is an easy part. The challenge is to have a harmonized vision about overall business capabilities and maturities in an organization and build a customized structure to accelerate business performance and unleash digital potential.


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