Thursday, September 12, 2019

Three Fatal Mistakes Cause the Business Mighty Fall

Digital leaders must ensure the business having a clear vision, well-defined business goals, and gain the contextual understanding of the inter-connectivity of both visible and invisible business success factors.

Due to the “VUCA” business new normal, the digital organization and its business ecosystem today become hyper-connected and interdependent. It’s important for the management to understand the business as a complex adaptive system with different functions, structures, layers, and teams. Every organization today sooner or later will step into the uncharted water or blurred territories, it is also critical to avoid these fatal mistakes or hidden pitfalls, which cause the business mighty fall, in order to lead the company forward at steadfast paces.

Confuse means with ends: With the high velocity and an unprecedented level of uncertainty, business management today needs to see the whole picture, determine what the future needs to look like and what digital transformation must look like. The wrong end can lead to catastrophic business setbacks. More often than not, organizations have to adjust their directions accordingly in order to adapt to frequent changes promptly. In reality, many companies focus on the transactional level of activities, keep the business spinning but going nowhere. The stagnation will further make the business irrelevant gradually and lose its competitive advantage. If some companies thought they are playing with fancy technology gadgets, thus, they are riding the tide of digitalization, perhaps they also confuse means with ends. Keep in mind, information technology is the means to an end, not the end. Information is the gold when it has been used to make an informed management decision to develop the right products, services, or business models, enter a new market, or explore a new digital channel, etc. Technology is the savior if it can improve customer satisfaction, empower employees to change, or catalyze innovation. When the organizations can focus on problem-solving, they are able to dig into underlying business processes and pain areas, bring out customer-tailored and technology-driven solutions, and devote more attention to what organizations really care about. Digital transformation is not just about technology, it has to expand into every direction of the business for unlocking business performance and improving organizational maturity.

Put the wrong people in the position to solve wrong problems: As always, people are the most invaluable business asset and capital, but often the weakest link for business transformation. Putting the right people with the right capability to solve the right problem is simply the biggest challenge facing businesses and our society today. And it’s much easier to say than doing because it involves multiple intelligence judgment and assessment processes to evaluate people and problems in an objective way. In today’s VUCA new normal, complex problem solving takes interdisciplinary understanding or integral professional competencies to both frame the right problems and solve them in the right way. When organizations make talent assessments only based on linear logic or conventional talent management methodology, more often or not, they miss the point and put the wrong people to solve wrong problems or even create more problems. Cognitively, often people are both the cause and the center of the problem. Diagnosing the problem from the mindset level is a critical step for digging into the root causes of many problems today. Thus, the assessment should start at the mindset level, quality counts, dynamic counts, and learning agility counts. Select the right people who possess the advanced mind with multidimensional intelligence, proficient knowledge, nonlinear skills, and unique problem-solving competencies to move the business forward and accelerate digital transformation.

Ignore measuring something important or measure the wrong things: You can only manage what you measure, mismeasurement, and ineffective performance management cause the business mighty fall. From a strategic management perspective, one of the most dangerous pitfalls of performance measurement is when the performance system is connected with the motivation system on an operational level, but disconnected from the strategy management. Sometimes, metrics motivate people to game the data, rather than make real achievement; encourage mediocrity, rather than creativity; or the metrics only tell part of the story but ignore the full pictures, etc. Keep in mind, the right metrics are requested in the right context; it’s important to explain to the upper management of why they are requested, to ensure the management buy-in. To avoid varying performance measurement pitfalls, the management needs to clarify which culture you would like to shape and what kind of behavior you should encourage. It’s critical to ensure that digital performance measures are both qualitative and quantitative, correlate to build differentiated business competency and achieve better business outcomes. The effective performance management directly impacts on day-to-day decision-making, business adaptability, and overall organizational maturity.

There is no one size fits all formula to build strategy competency and run a high-performance digital business. Digital leaders must ensure the business having a clear vision, well-defined business goals, and gain the contextual understanding of the inter-connectivity of both visible and invisible business success factors. Each organization just has to "walk the talk," avoid the hidden trap or fatal mistakes and explore their unique way to enforce inter-organizational linkage and take step-wise actions to improve digital management maturity.


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