Forward-looking organizations need to deal with their organizational design problems skillfully and develop a high mature business with fluidity, adaptability, and high performance.
The interdependence enabler: The digital transformation is now spreading rapidly to enable organizations all shapes and sizes across the vertical sectors to reinvent themselves. The “organizational design problem” would be to build the “best” mix of organizational elements that enable the organizational interdependence and coherence. In practice, with emerging digital technologies, dismantling bureaucratization is inevitable because of the ever-increasing speed of changes and expanding interdependence.
The larger the organization and inputs, the larger the number of rules necessary for business functions and to keep dependent variables and outputs delivery stable. To look at all key business elements such as organizational structure, process, culture, technology, including the human element, as an integrated system and functions as organic living things. You have to look at the “organizational design” problem domain holistically and apply “simplicity” principles to architect and design an ecological organization and proactively plan the total enterprise ecosystem to either make a profit for shareholders or generate prosperity of constituencies.
Hyperconnectivity transcendence: Connectivity is the nature of the contemporary business which has a better capability for dots connections across the geographical, functional, industrial, or generational boundaries. With emerging digital platforms and efficient collaboration tools, hierarchical structures will be transcended to the interconnected and networked structure that can balance welfare, freedom, and responsibilities.
In the corporate scope of modern business, some organizations are too complex and need to be more flexible and reorganized in a simple way for accelerating business performance. To handle the “organizational design” problem smoothly for adapting to the increasing speed of changes and emerging business events, the two organizational structures - hierarchy and relationship structure wrap around each other to ensure high responsiveness and accountability.
The different kinds of “control”: In many traditional companies with overly rigid hierarchy, the top-down “command and control” management style often stifles innovation and decelerates business speed. With the exponential growth of information and continuous disruptions, either individually or collectively, we should humbly let go and accept when circumstances are beyond our control, analyze known unknown and unknown unknown, and manage uncertainty skillfully.
To deal with organizational design problems smoothly for streamlining the business flow and unlocking business potential, design business processes by state flow instead of activity flow, and by using various categories of rules instead of the usual “command and control” rules. Define a framework for activities, and at the same time, keep the necessary flexibility in place, and pursue the different kind of control - the control of desired outcomes, keep the end in mind, not overly control the process of “how.” The “command & control' changes from commanding What to do, When, How and by Whom (micromanagement) towards “command & control” by defining the desired outputs, but encourage alternative and better ways to do things, without getting stuck with “we always do things like that” mentality.
Today’s digital businesses are nonlinear, volatile, interdependent, uncertain, they also face fierce competition and ambiguous digital environments. The “organizational design” issue is really about how to build the best mixture of organizational elements that enable the organizational interdependence and harness adaptability through less hierarchy, frictionless processes, and hyperconnected business dynamic, to enable the business responding to changes promptly. Organizational design is actually a cohesive effort of strategy management. The more effortlessly you can align, integrate, and optimize the important business factors inside an organization, the closer you can accelerate performance and lead digital transformation smoothly.
To deal with organizational design problems smoothly for streamlining the business flow and unlocking business potential, design business processes by state flow instead of activity flow, and by using various categories of rules instead of the usual “command and control” rules. Define a framework for activities, and at the same time, keep the necessary flexibility in place, and pursue the different kind of control - the control of desired outcomes, keep the end in mind, not overly control the process of “how.” The “command & control' changes from commanding What to do, When, How and by Whom (micromanagement) towards “command & control” by defining the desired outputs, but encourage alternative and better ways to do things, without getting stuck with “we always do things like that” mentality.
Today’s digital businesses are nonlinear, volatile, interdependent, uncertain, they also face fierce competition and ambiguous digital environments. The “organizational design” issue is really about how to build the best mixture of organizational elements that enable the organizational interdependence and harness adaptability through less hierarchy, frictionless processes, and hyperconnected business dynamic, to enable the business responding to changes promptly. Organizational design is actually a cohesive effort of strategy management. The more effortlessly you can align, integrate, and optimize the important business factors inside an organization, the closer you can accelerate performance and lead digital transformation smoothly.
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