Saturday, January 18, 2020

Key Design Characteristics of Digital Organizational Structure

The high degree of the team’s or the organizational self-management capability reflects its maturity to be disciplined to do the work well in a dynamic and highly innovative environment.

As we are going forward towards the radical digital transformation, business management is responsible for enabling a collaborative, innovative, and productive working environment. Design thinking does need more recognition as a “mainstream” thinking in business management disciplines and problem-solving processes and practice.

From an organizational structure perspective, what is it comprised of, and what is the future of digital business and what are the key design characteristics of the digital organizational structure?

The right mixed structure to keep business fluid: The traditional pyramidal structured organization brings up a certain level of efficiency, but overly rigid hierarchy often becomes the very obstacle to slow down the digital flow and stifle change or innovation. Flatter structure will help to speed up the organizational response to changing markets. With emerging digital technologies and collaboration tools, many companies across the vertical sectors have the right mix of the physical structure and virtual settings to enforce cross-boundary communication and collaboration; adopt the hybrid organizational structure that creatively blends structured and unstructured processes to run with bi-modal speed.

Digital means exponential growth of information, continuous disruptions, and shortened knowledge life cycle. Limited hierarchy works best in a creative environment in which the free flow of ideas and their prompt implementation is a key element of ultimate business success. In an ideal digital workplace, the organizational structure is solid enough to keep people or things in order; but fluid enough to keep information and ideas flow. The right mixed structure is the one that allows the right mentality and culture to bloom. Organizations can put more effort into innovation rather than overcoming organizational hurdles and pushing against structural boundaries. Within a well-aligned structure, digital transformation is a natural process and rather effortless to maintain.

The premium Employee Engagement to improve productivity and innovation: Tuning organizational structure, either managerial hierarchy or information flow structure is an easy part. The digital organization is an integral business system with policies, culture, people (employees, customers, partners, etc.) and processes. There must be some compelling reason of personal interest for a person to go to work, and there must be reasons for them to stay and deliver high productivity. There are many different views on employee engagement. The very goals are to align corporate goals with employees’ career goals, put the right people in the right positions to solve the right problems, encourage talent growth, inspire change, and create enterprise synergy.

In reality, many traditional businesses treat their people as cost, headcount or resource only. With silo and bureaucracy, people fear to step out of their comfort zone and adapt to changes. The overall employee engagement is very low, and the overall employee experience is not so optimistic. Reinventing digital organization does not happen in a vacuum, the ability for people to self-assess in well-built hybrid working environments, and for early "warning signs" to be identified across the board, open many doors for prescribed interventions. It’s critical to empower people, nurture trust, or inspire peace by organizing self-managed digital organization to define circles, roles, and authority through the members of your organization to catalyze innovation.

Business leaders need to make an objective assessment of the overall employee management systems maturity by clarifying: Are we going to afford to deliver the experience being designed? Do we know the system will produce the returns we expect? What are the quality of the output delivered (new ideas, accurateness, value, positive culture influence, etc.)  Make a further assessment of:

-The speed at which the information is delivered or communication is conveyed.

-The amount of work (productivity)

-The innovation of work

-The time ratio spending on production, innovation, and administration tasks

-The level of open leadership influences

The hyper-connected and self-adaptive ecosystem with a high level of autonomy: Consider nature and culture as to self-organized and interlaced environments, teams naturally gravitate towards self-organization. Digital organizations are self-adaptive organisms with flexible structures and information-driven processes, keep evolving and sustaining. With an unprecedented level of high velocity and uncertainty, organizations need to cultivate a dynamic climate that is conducive to growth rather than using catch-phrases that make things look good but causing disconnectivity and incoherence.

To deal with today’s complex problems and overcome challenges, individual work and group work cannot be done as segregated from but within the framework of an entire business ecosystem including policies, systems, processes, culture, and customers, etc. Traditional hierarchical lines will phase out and a collective of business partners will emerge working collaboratively to set and achieve the strategic business goals. Ideally, the digital organizational structure needs to be fluid enough to interact with the expanded digital ecosystem seamlessly. The whole business ecosystem needs to communicate, negotiate, reciprocate, and cooperate with each other to reinvent for harnessing innovation and improving organizational maturity.

Fine-tuning underlying business structure and processes is a critical step and continuous effort for improving digital business fluidity, flexibility, and overall digital fit. The high degree of the team’s or the organizational self-management capability reflects its maturity to be disciplined to do the work well in a dynamic and highly innovative environment. Forward-looking organizations work proactively to dismantle business bureaucracy for the amazing capacity these structure innovation experiments or practices unlock for feeling into the evolutionary purpose and digital exuberance.


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