Friday, September 7, 2018

How to Leverage System Understanding to Managing Change and Tunning Digital Organization

 The Systems Thinking progression is to be sensitive to the emergent trends and to leverage a balanced understanding of managing changes and running the business.

Everything is all connected. There is flexibility, abstraction, and pliability in the concept of a system and system of systems. Businesses are systems. The digital organization is a complex ecosystem with the blurring line between functions, organizations, and geographic locations. To understand the digital business or the world as a complex adaptive system requires an understanding of how the things have come together, being 'built,” as well as how to leverage the system understanding for fine-tuning the business to get digital ready.

The system hierarchy is different from the command control hierarchy: Every system is a subsystem of a larger system and simultaneously it is always build up by subsystems. The highly complex and dynamic system such as a digital organization has a nature of hyperconnectivity, nonlinearity, and interdependence, it needs to be elaborated in a well-organized system manner with contextual understanding. As with all things pertaining to systems, context and perspectives are everything. Every system has its position in the hierarchy of systems. The system hierarchy is different from the command and control hierarchy. Overly rigid structural hierarchy stifles digital flow and innovation. To be a highly functional system, hierarchy must balance the welfare, freedoms, and responsibilities of the subsystems and the total system. There must be enough central control to achieve coordination toward the large-system goals, and enough autonomy to keep all subsystems flourishing, functioning, and self-organizing. Leveraging system understanding for tuning digital organization is about understanding the interconnectivity between the things, being able to identify the early signs of a dysfunctional system, such as the limitations of the systems to adapt, overly rigid for protecting silos, so the business systems are no longer able to accommodate changing needs, etc. Having a system understanding enables the management to avoid tunnel vision, keeps an open mind to explore new possibilities because the best business solution based on the systems thinking is the one that responds perfectly to its dynamic business environment and ensures the organization as a whole achieving the better business results.

Macro & Microsystem understanding and analysis of the digital organization: System Analysis requires many forms of thinking such as abstract, holistic, system, quantitative, objective, subjective, temporal and critical. To enforce the system understanding of the digital organization, macro analytics is often the starting point when one is ignorant about the details - focus on qualitative and general; and then, take "micro" analytics which is "scientific" and specific - more quantitative. Macro-approach identifies the impact factors in a system into chunky distinct facets or scenarios. On the other hand, the "micro-approach" is more concerned with pinning down the elementary and underlying constituents of a system, seeking to abstract and codify aspects of the system into the data-sets and algorithmic process formulas. The macro view is useful to tell you “What?” While the micro view tells you “How”? To fine tune a high-performance digital organization, it's important to leverage a micro-meso-macro approach for managing people-centric digital organizations. The meso level is the customer experience. The micro level is the passion and talent of the designers. The Macro levels are the constraints of time and money. A small change at the macro level is most effective to create a big change at the meso level. It may also be useful to keep in mind that the macro system has more "dimensions of analysis" that should be considered. For example, on a micro level, one department may improve their operational efficiency. On a macro level, you should consider the optimization of all the departments, and the effectiveness and efficiency of the inter-departmental interactions, as well as an additional dimension.

Systems understanding is searching for meaningful relationships both within the subsystems and between them; monitoring and observing links and feedback systems: The digital ecosystem expands when the digital business territories blur and the business communities broaden their scope and consume all sorts of resources. Digital organizations need to emphasize participation, relationships, communication, and realize that organizations will need to renew themselves periodically to cope effectively with change and have a fluid structure that responds effectively and makes an impact on the hyperconnected digital ecosystem. It can create the synergy for desirable emergent property under the high-mature digital ecosystem through participation, relationships, and communication. By leveraging system understanding of fine-tuning the digital organization, the business management can become more effective to monitor the overall health of the business and enforce the cross-functional relationship and collaboration. Digital organizations are like the living systems that can self-adapt and self-renew in striving to become high-performance businesses. The highly scalable digital organizations can expand and amplify its influence with the ability to co-create and amplify business effect in a digital ecosystem -treats customers, channel partners, suppliers, and industry ecosystem participants as active agents to encourage idea sharing and harness business collaboration.

Now many organizations are on the journey of digital transformation, the Systems Thinking progression is to be sensitive to the emergent trends and to leverage a balanced understanding of managing changes and running the business. The digital organizations become more flexible, able to navigate changes and manage business complexity through creative problem-solving and innovation management practices and ensure the organization achieving the optimal business results.


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