Wednesday, December 12, 2018

The Digital Management Formula

Digital Management = Goal + Principle + Process + Practice + Training + Metrics

The digital paradigm has many dimensions, with hyperconnected nature and many moving pieces. The digital management is a hybrid and holistic discipline with many mixed parts. It consists of the interlocking function of making corporate policies, organizing, planning, controlling, and directing the organization’s resources in order to achieve the objectives of that policy. The breadth and depth of digital management include people (skills and capability), process ((workflow, process effectiveness, and efficiency), the organizational structure design, technology update, knowledge transfer, and performance evaluation. Although there is no such a one-size-fits-all digital management formula, still, here are a few important management components to explore and exploit digital to improve business maturity.

Goals: Strategic Planning by definition is translating the company vision into broadly defined goals or objectives which are the achievable components to focus on an organization’s strategic management and ensuring your organization is oriented correctly upon them. It provides an effective tool for leadership to clearly articulate the business objectives to their workforce, their investors, other key stakeholders and guide positive improvement over time. Digital leaders should always stay focusing on the big picture of the business, leverage and prioritize, ensure that the business execution is on the right track to achieve well-defined goals. The relevant business goal setting helps a senior leader keep a pulse on progress and helps the execution team understand what needs to be done with priority in mind, as well as respond to emerging business issues with speed, without getting lost or burning out.

Principle: Setting guiding principles helps digital leaders provide greater clarification of mission/vision/ strategy at a more detailed level. Setting guiding principles is not to manipulate “how,” but to clarify “why” - the guiding principles frame the right questions to ask, not just about searching answers only. It’s not easy for a set of principles defined that can be applied holistically - their content contains natural conflict, and without a method of prioritizing and implementing them consistently, they become a source of contention. Thus, there needs to be a pragmatic way of applying whatever principles to the problem in a consistent manner, otherwise, it is a waste of effort to even state them. The guiding principles should cover the people, performance, and quality from a holistic perspective, such as: Make sure your customer wins. Learn something of value every day. Focus on execution and results when innovating ideas. Etc.

Process: The process management effectiveness and efficiency directly impact strategy management success and business performance. Traditional organizational management with siloed processes often causes bureaucracy which is criticized for its inflexibility, inefficiency, silo, stagnation, unresponsiveness, or lack of innovation. Strong business processes have a better chance to deliver a better result. The reality in most organizations though is the process which is forcibly jammed within an existing organizational design. The goal-driven business process is primarily defined prior to process implementation. A hybrid organizational structure and process management can bring greater awareness of the intricacies and the systemic value of digital organizational systems, processes, people dynamics, technology, resource allocation, and economies of scale, etc. Business leaders should get a deep understanding of issues facing businesses today, building transparent problem-solving processes and making continuous improvement. Creative and knowledge workers demand broader flexibility to be creative and to problem-solving. The digital computing technology enables seamless collaboration by mixing both virtual platform and physical interactions, hybrid processes, encourage broader conversations and interactions within its business ecosystem.

The best practice and training: The best practice is not a “one size fits all” formula. Every organization needs to develop a set of customized practices for the specific situation and challenges that are faced and that actually requires different priorities as compared to others. These practices might be different across organizations, across departments, and affiliates within an organization and can change over time. When the enterprise is at risk of being defeated by smaller, nimbler, more innovative competitors, and then, the silos’ owners understand it is for their own benefit to collaborate and build “horizontal” organizational interdependencies and develop the best and next practices to achieve better time to market and build the unique business competency. Training is also important, you need to first define the business competencies required to achieve your organizational goals at a technical/functional level, behavioral and attitudinal, core competencies including values, the generic and foundation skills/training that affect all employees, the management and leadership competencies.

Metrics: Measurement is part of management. The performance measure setting should focus on achieving the ultimate goals of the organization as a whole, not just the individual or the team’s performance. The organization that didn’t have a systematic approach to measurement and analysis at both the strategic and operational level has a giant blind spot that is impairing their performance and business effectiveness. The peril of measurement management such as the wrong metrics selection or ineffective measurement practices perhaps causes management conflicts or resource misalignment. The usual argument about measurement is being what you want to provide a service at the lowest possible cost, both in terms of acquisition cost and ongoing "care and feeding." But keep in mind, the digital management cost-benefit analysis is multifaceted, it is flawed if only economic costs and benefits are considered.

Digital management is both science and art. The traditional linear management practices working in the considerably static industrial organizations are simply not sufficient to manage the "VUCA" digital new normal. Interdisciplinary science can be applied to digital management which involves applied Science (Engineering), Art (Design), principle (Philosophy), Cognition (Psychology), Social norms (Culture) and group behavior (Sociology), etc. The scientific part of management helps to set the policy, guidelines, structure, and methods to achieve business effectiveness and efficiency. The art of management will take the more crucial role in change management, innovation management, talent management and beyond in order to lead the business’s digital transformation seamlessly.


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