Sunday, January 19, 2020

How to Drive Iterative Business Continuum

To run a high-performance business, it takes a holistic approach to connect all important dots with multifaceted perspectives; continuously try to improve, develop, or change everything in prioritized order and manage iterative business continuums.

The digital business dynamic has “VUCA” characteristics, you can’t predict every turn or curve that the business will face, you need to enable the desirable emergent business property, allow the organization to morph as the business conditions and organizational capacities change to allow a better fit for the purpose, enforce the broader scope communication and collaboration, and creates synergy for achieving high-performance business results. Here are three pairs of iterative businesses continuum.

Strategy and execution as an iterative business continuum: A strategy is a planned direction to act and provides the first steps but can be radically changed as demanded by the environment and experience of execution. Due to the rapid changes, the "right" strategy can't be completely defined by the planning space. A finger without a hand is akin to a strategy without execution. Strategy and execution are complementary processes that only balance each other and can produce meaningful outcomes.

Often, strategies fail either because of improper execution or more likely because the strategy was flawed. There are varying potential points of failure in strategy management: Poor organizational capability in assessing the business environment and setting strategic direction. Poor organizational management capabilities that translate strategic direction into real changes within the organization. Or poor organizational governance competency that is needed to maintain the strategic fit.

If a strategy can be thought of as a bunch of hypotheses about how the business executes to achieve the desired outcome, then, execution is the testing of those hypotheses in the real world as it attempts to implement the strategies. The key is to achieve outcomes. When you start getting the business imperatives addressed and taken care of by setting priority right, then you know, the strategy is working. Both strategy and execution are the two equally important facets of the same coin, and iterative business continuum in order to reap the success in the business.

Innovation and standardization as business process continuum: Standardardization is a process of embodied technical knowledge accessible to all types of businesses that enable effective and efficient product and process development. Innovation is a management process of transforming novel ideas to achieving their business value. Some may equate out-of-the-box thinking with innovation and similarly equate inside-the-box thinking with standardization. Hence, organizations need both, and in fact, cannot really exist without a healthy balance of both.

In fact, innovation and standardization are also the two poles of the business strategy: profit through standardization (volume) and profit through innovation and flexibility (diversification). There could be diverse levels of standardization. Usually, companies want standardization of internal reasoning such as capitalization of previous experience, cost control, convenience, etc. There are different types of innovations such as incremental innovation or breakthrough innovation. The business should always be open to, conscious of, and feel empowered to act upon out of the box thinking to spark innovation. Consider the iterative continuum between innovation and standardization. Imagine yourself rising above that continuum, and look down upon the balance between the two. What you've just done is to raise your consciousness of that balance, and that, in and of itself, makes a world of difference.

Management and governance as an iterative business continuum: Corporate management is an overarching concept covering multiple disciplines such as strategy management, change management, information management or performance management, etc. Corporate governance has a direct link to each business and its processes. Not only from the financial results, but also from the involvement and signs being displayed inside the organization, about what guidance, values, and principles governing the company's commercial activities.

Implementing policy is a management activity, and monitoring policy compliance is a governance activity. The distinction between the two sets of activities is essential to understanding the difference between management structures & processes and governance structures & processes. The governance structure is independent of management structure, but the governance process/mechanism can be embedded into the business process seamlessly, and governance practice should be shared cross-enterprise collaboratively. Some old school of management thinks governance is only for the bottom line, statistically, the organizations with better governance discipline will outperform competitors significantly.

There are varying degrees of understanding of the scope of corporate governance and the distinction between corporate governance responsibilities and management responsibilities; such as governance structure, governance process, governance mechanisms, governance practices, and governance metrics, etc. Governance can begin with frameworks and policies to be put in place, depending on the nature, scale, and complexity of the organization, understanding one's risks and conducting. Sound governance is part of eliminating risk and doing the right thing, so it is a framework and the standards to improve business effectiveness and maturity.

To run a high-performance business, it takes a holistic approach to connect all important dots with multifaceted perspectives; continuously try to improve, develop, or change everything in prioritized order and manage above business continuums as long as it creates a more long-term business advantage and solves the critical business challenges.


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