The business nonlinearity comes through different characteristics such as mixed structures, diversity, volatility, ambiguity, unpredictability, and increased flux.
Linear thinking is viewed by many as being simply the opposite of closed-loop thinking (thinking in a straight line rather than circularly). As linearity often implies cause and effect with no feedback. in the industrial setting, business management often practices linear thinking with a set of linear skills; it perhaps works in the considerably static and silo business environment. However, in today’s dynamic digital business environment with hyperconnectivity and interdependence, the traditional management based on linear thinking and reductionist logic is outdated, causes silo or frictions, and decelerates business speed.
Because of traditional management with linear logic, the business units often do not work in collaboration: Linear systems are those that follow a generalized superposition principle (doubling the input doubles the output, adding two inputs together leads to adding their two outputs.) The linear logic allows you to break any input into simple pieces and compute the output due to each piece separated, then add the results. Linear thinking implies the whole is equal to the sum of its parts, but it’s only part of a story. It does not encourage cross-functional collaboration and thus, it’s not effective from a business perspective. The traditional management approach is based on linear thinking - thinking the business as a mechanical system. Traditional management is inside out with linear processes to drive efficiency. The consequence of all of this is that the “classic” management doesn’t take a systemic approach to management. In the real and physical world or business world, most relationships are nonlinear. Digital management is about leveraging Systems Thinking to set general management principles for understanding how the “part” interconnected with the ”whole.” It’s about seeing interrelationships rather than isolated things, to enforce collaboration and ensure the organization as a whole is optimal than the sum of pieces.
Problem-solving based on linear logic and analytics can sometimes cause more problems later on: The reason linear thinking is in many cases, not so effective for solving many business problems because there is always a temptation to use simple linear models to understand highly complex or nonlinear scenarios. While the linear analysis help to break down thing to the pieces, but it often ignores the interconnectivity between parts and the whole. A simple variable can be both cause and effect. Thus, the problem-solving based on linear logic and analytics can sometimes cause more problems later on. For solving complex problems, leveraging Systems Thinking for problem framing helps to take on a broad open perspective and solve them via “putting them together” seamlessly without creating too many new problems. Synthesis needs to follow the analysis, with the process to not only putting the bits or bytes together but blending them in such a way that emergent whole is somehow superior to the sum of its parts. Synthesizing problem-solving looks at the context in which it has happened, and then expanding into being a larger picture to solve larger problems with premium solutions. The digital management approach is about leveraging nonlinear processes and interconnectivity between problems in a managerial context to improve the overall business problem-solving competency.
The business nonlinearity comes through different characteristics such as mixed structures, diversity, volatility, ambiguity, unpredictability, and increased flux. It is transformational to 'step outside' of the system for having different perspectives to gain an in-depth understanding, and take a comprehensive, anticipatory and design approach to manage a high performance and highly innovative digital organization and ensure the health of the business ecosystem.
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