The Organizational Fragility Caused by Imbalance

Growth, balance, and harmony are not fixed, they are flowing. 

The black and white boundaries continue to diminish in the 21st century due to the occurrence of increased economic integration, hyperconnected, and interdependent nature of the digital organization. Ad hoc business change is doomed to fail. The digital transformation is a radical change, with all sorts of ups and downs, bumps, and curves. It brings both opportunities for business growth and risks as pitfalls. From a business management perspective, the imbalance of any sort will cause change fatigue, decision ineffectiveness or business fragility, To lead change smoothly, how to identify problems and fix them smoothly?

Imbalanced cognitive skills: Hyperdiversity and superfluidity are the characteristics of the digital era. Change is a team effort, to harmonize and move forward, it’s important to embrace cognitive difference, be open to diverse viewpoints, enforce empathetic communication, and harness cross-functional or cross-regional collaboration. The imbalanced cognitive skills often create cognitive gaps, cause group thinking, generate blindspots, and lead to ineffective decision-making. Therefore, cognitive performance is important for both problem-solving and creativity development. Individually, to develop multidimensional intelligence and sharpen cognitive skills, it’s critical to frame a bigger box of thinking, let the "out of the box" thought to come into your own thinking box, to think both broader and deeper, critically and creatively in order to make sound judgments and effective decisions. Collectively, talented people with cognitive differences can understand things from different angles and bring new perspectives to the table. It’s important to set up a heterogeneous team with balanced cognitive skills, and its team members can proactively stimulate the creative energy and their collective psychology shapes the culture of innovation.

Imbalanced business priority: Nowadays there are so many things going on in the business, with so many distractions or disruptions. the organization has limited resources and they can’t chase all emerging opportunities or capture everything that looks shiny. The imbalanced business priority will perhaps get the business stuck and make the business fragile, and cause the business to fall into the “busyness” cycle without going anywhere. The high mature digital organization gives a balanced focus on achieving both short term and long term objectives. Therefore, the toughest part of the strategy is the trade-offs, organizations need to keep one eye on today’s performance and the other eye on the future performance of the business. It has to strike the right balance of exploration (planning, designing, developing, investing, innovating, monetizing, and orchestrating) for pursuing growth opportunities and exploitation (consolidating, rationalizing, modernizing, integrating, securing, or optimizing) for achieving operational excellence. In practice, sometimes business managers focus on improving the processes or implementation of performance management or evaluation but fail to look into the system holistically or think long term to shape the future. Thus, the business leaders today must be able to prioritize well, switch confidently between strategic and tactical, transformational, and transitional in order to run a high-performance digital business in the long run.

Imbalance of speed: Companies adapt to the “VUCA” digital new normal with varying speed. On one side, driving too slow will leave the business irrelevant and cause the business to lose the game as the competitors will take over the market and win over customers. On the other side, driving too fast perhaps fail the business as well due to the unprecedented level of risks and uncertainty if the company is not well prepared for challenges. We live in an era in which every piece of information has the potential to plunge a company into a falling spiral or a global reputational crisis. The imbalance of speed will cause the business fragile and decrease their business effectiveness. Forward-looking organizations explore the new arena to speed up, but silo mentality, overly restrictive hierarchy, or functional segmentation often create barriers that surface between different departments within a company and limit the pace of their digital transformation. To strike the right balance of acceleration and stability, flexibility and standardization, creativity and process, some organizations run with a hybrid speed, separate the exploitation of the existing technologies, methods, and practices from the exploration of new ways to do things. Highly intelligent organizations can capture business insight almost at the real-time, in order to respond to changes promptly and run the business at the premium speed.

It’s important to understand that digital management is multifaceted and holistic. Striking the right digital balance is a never-ending business life cycle. Growth, balance, and harmony are not fixed, they are flowing. The digital organizations need to get away from letting things fall through, start creating “integrated wholes,” strike the multitude of digital balances that impact with each other in order to achieve such a state of dynamic equilibrium.

Posted in: Digital Master,Digital Pitfalls,Digitalization,Lessons from Failures