Saturday, January 12, 2019

Reinvent Digital Organization with Necessary Breakdowns

Forward-thinking organizations today need to constantly adapt to the ever-changing environment, make some necessary breakdowns in order to reinvent the business for getting digital ready.

Organizations large or small across the industrial sectors are on the journey of digital transformation. It means that companies need to infuse digital into every aspect of the business. It is the paradigm shift from static to flow, silo to holistic, and mechanical to organic. In the rapidly evolving businesses and dynamic digital economic systems, making disruptive change is critical but challenging for the company’s long term surviving and thriving. How to make some necessary breakdowns and overcome barriers on the way to reinvent a digital organization?

Break down silos by understanding the views from outliers and improving cross-functional communication and collaboration: Organizations develop functional silos as they grow by necessity, it’s the by-product of the need for specialization of knowledge and a certain level of management efficiency. However, when the management and people get used to silo thinking - which causes business ineffectiveness and decelerates the speed of changes. It is the result of poor strategic thinking and root cause of mismanagement. Silo causes cross-functional communication and collaboration gaps, causing people who are supposed to be on the same team to work against each other, drag down the business speed. Silos have individual goals, but strategic goals need to be shared and common to ensure the entire organization accomplishing the high-performance business results. Silo self-perpetuates when the soft elements of the organization such as leadership or culture have some serious issues, such as encouraging people thinking the short-term, leading change inertia, or driving unhealthy competition, etc. To break down silo thinking or other types of outdated mindsets, digital leaders have to clarify the big “WHY” behind strategic changes, provide clear process guidelines, bring up views from outside-in, to ensure that the teams are embracing cross-functional collaboration and taking customer-centric effort for pulling in the same direction.

Fix the overly rigid organizational hierarchy by breaking down straight line functional, geographic or industrial borders: Business is a system, every system has its position in the hierarchy of systems. System hierarchy provides the system stability and resilience. However, system hierarchy is different from the command and control hierarchy. Overly rigid organizational hierarchy perpetuates bureaucracy and causes stagnation. Nowadays, we live in the information-rich and technological advanced society, knowledge work is more purpose-driven and self-management. Thus, the restrictive hierarchy will lose its steam; openness, trust, sharing, and collaboration are fundamental for productive and creative teamwork. To run a highly functional digital business, the business hierarchy must balance the fluidity, freedom, and responsibilities of the substems (functions) and the total system (the eco-business environment), to enable information fluidity, workforce creativity, and management holism. A hyperconnected organization can approach the flow zone when the positions in its hierarchy have clear and accountable tasks. Balance is key. There must be enough central control to achieve coordination toward the large-system goals, and enough autonomy to keep all subsystems flourishing, and functioning for achieving high-performance results.

Disrupt the status quo by breaking down the old rules: Digital is the age of innovation, and creativity is the most wanted skill in the 21st century. As the old saying goes: There is no innovation without disobedience. To become creative, one would have to break down some old rules, but you should learn and have an in-depth understanding of them first. Rule-breaking or rule-making demands insight, understanding, patience, persistence, and courage, among other things. In reality, although people consciously or subconsciously protect their status quo. To be truly creative means breaking down “We always do things like that” mentality, challenging conventional beliefs or industry best practices, discovering better ways to do things and developing next practices to change. The innovation is about doing something better than it currently is. Due to the fact that innovating in today’s digital world has become increasingly complex in nature, innovation management requires much deeper whole system understanding and taking emergent, generative, iterative, integrative, and holistic approaches. Rules are still necessary for framing, setting the standard or safeguarding the status quo, but not for stifling innovation.

With rapid changes and exponential growth of information, businesses today need nothing less than a paradigm shift in their thinking about the fundamentals of how organizations work to build an ever-evolving, hyperconnected and highly energetic digital organization. Forward-thinking digital organizations today need to constantly adapt to the ever-changing environment, make some necessary breakdowns, build coherent business competencies to reinvent a contemporary digital business and reach the next level of the business maturity.


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