Thursday, January 31, 2019

Five Pillars of Digital Stagnation

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.

Either for individuals or businesses today, change is inevitable, some of us get it quicker than others. But too often changes are made as a reaction to outer impulses, disruption, or crisis. The digital transformation is all about the rapid changes with blurred functional, business or industry territories and expanded organizational horizons. Forward-looking organizations have to stretch out in every business dimension for driving the full-fledged digital transformation. However, many companies get lost or get stuck on the digital journey. What’re the root causes and pitfalls on the way? Here are five pillars of digital stagnation.

Silo mentality: The industrial organization with silo functional setting is to achieve a certain level of efficiency. However, the overly steep organizational pyramid with strictly rigid processes causes silo and bureaucratic management redundancy. It leads slowness, small-thinking, and digital stagnation. Silos are a product of organizational insecurity and internal competition for resources. They are also the results of poor strategic thinking and inflexible organizational design. Silo isolates teams and limits creativity. The duplication of efforts led by silo driven management approach results in wasting valuable resources and time and decrease productivity. To break down old school silos of thoughts, enforcing cross-functional communication, collaboration, and transparency is the key to allow the organization keeping evolved and invested in the greater purpose or vision. Every department in the company needs to work together cross-functional borders when necessary, to ensure that the business as a whole is superior to the sum of pieces. In fact, the hyper-connected nature of digital organization offers particularly fertile ground for building innovation capacity of the business and developing the highly adaptive, dynamic and ever-expansive cross-industrial ecosystem.

Idea bottleneck: Ideas are like water, keep flowing; when ideas get stuck, businesses get stagnated. Most good ideas emerge from business interactions, not a single individual. Thus, organizations need to build their idea reservoir to keep ideas up and manage them effectively for achieving their business value. Innovation happens at the intersection of people and technology. Thus, to break through idea bottleneck, it’s important to identify important technology trends, learn what the trend of such new idea is, as well as learn innovative ideas across the industrial border. It’s also important to develop a highly collaborative platform to manage innovation in the given culture, operating environment, and governance, which can be part of innovation management planning and implementation. As a result, ideas can flow seamlessly, innovation becomes a persistent, shared reality even across silos and geographies.

Communication gap: Communication clarity directly impacts on the business effectiveness, speed, and maturity. However, in many organizations, miscommunication or misunderstanding is prevailing and leads to conflict and malfunction. Communication gaps are often caused by cognitive difference, ambiguous process, mistrust culture, internal politic, or other management bottlenecks, etc. Communications are the tools to solve problems, and languages are the tools to make communications. To bridge communication gaps, it’s important to respect your audience's cognitive diversity and professional interest and try to send the message which appeals to them. It’s critical to initiate information-based communications to connect the minds or open touch-feely talks to touch the hearts, for leading into a virtuous communication cycle. When communication leads to rumor, blame or fingerpointing, it’s gone to the vicious cycle. In practice, bridging communication gap starts at the mindset level. Thoughts are the first order, actions or words are said to be the second order.

Process friction: Organizations, like individuals, need to be in flow to operate smoothly and adapt to changes with less friction. With fast-paced changes and technology-led disruptions, many of today’s organizations are running in between - the mix of old and new; the different departments or divisions within an organization have different speeds. Thus, business managers need to make an objective observation on how their group works with other groups, any frictions existing to decrease productivity, diminish innovation, or decelerate business speed. Lack of systematic processes or having overly rigid processes can be the cause business stagnation. Digital platforms enabled by emerging technologies, efficient apps, and tools, help to lubricate processes, flatter business hierarchies, allow people across the business ecosystem to share knowledge for solving problems and overcoming common challenges. An organization can approach such a flow zone when people are ready for moving to a fluid structure, and digital leaders are eager to set stages and drive a frictionless, immersive, and relentless digital transformation.

Learning disability: Digital means the abundance of information and shortened knowledge cycle. Both at the individual and organizational level, if you fail to climb the learning curve, you will get static and lag behind. Organizations with a learning disability will become stagnated. Learning disability is often caused by static or close mindset with “we always do things like that” mentality. At the business level, Organizational leaders should make an objective assessment of their organization’s learning competency. Having learning curve awareness means to understand how change capabilities are underpinned by change processes, people, and technology, and how much change capability is really required for the change effort you are kicking off. To improve their learning capacity, digital organizations and their people must learn through their interactions with the business environment, then, they apply their learning, act, observe the consequences of their action, make continuous improvement. It is about how to ride the learning curve to get into actions in creative, positive, and productive ways that educate, support and celebrate every critical step of the change curve and the business transformation journey. The business becomes more successful when the corresponding learning curve has reduced uncertainty to the point where both the strategic synergy and organizational interdependence can be structured.

There are many causes of digital stagnation and there are numerous roadblocks to changes, such as lack of direction, culture inertia, misalignment of system/process, overly rigid organizational hierarchy or centralization, functional silo or groupthink, comfort zone or status quo (pass success will come to future success), lack of creativity, etc. 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. The ultimate goal of running a fluid digital organization is to get the mass collaboration, create business synergy and accelerate digital speed through less hierarchy, cross-functional communication, and seamless resource, technology, and talent alignment.


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