Tuesday, August 18, 2020

A Couple of Management Negligences Cause Business Obsolescence

With “VUCA” digital normality, business leaders today need to keep navigating unknown and build up the team which includes the complementary mindset, diversified background, and different skillsets to co-solve over-complex problems smoothly.

Businesses are complex, people are complex, and the world is complex. With overwhelming growth of information and continuous disruptions, many organizations are at the crossroad, either making a radical digital transformation by taking out-of-box thinking or continuing with “we always do things like that” mentality” and become irrelevant gradually. 

The high mature digital organizations should be complex enough to act intelligently and nimble enough to adapt to changes promptly. Here is a couple of management negligence that possibly causes business obsolescence.

Companies do not want to accept that the old business model is sinking: With rapid change and fierce competition, companies across vertical sectors face the larger than ever pressures to survive and thrive in the long term. The most difficult situation is when a company has been successful in the past, and people do not want to accept that the old business model is sinking, and some best practices are outdated already. When systems are dysfunctional, silo thinking or bureaucracy is propagating. It’s important that business management shows objectivity and humility to realize that some of their systems and processes are out of date, the business model needs to be updated as well, and they have differentiated competencies for adapting to change promptly.

Tuning a business model is about applying emerging trends to capture business growth opportunities, and therefore, it’s related to a business strategy in time. It’s important to understand relationships, ecosystems, market dynamics, and the connections for accelerating strategy management. In reality, many legacy businesses come with a legacy mindset, the old way to do things. Silo self-perpetuates when leadership or culture has some serious issues to encourage change or lack courage and important soft business elements to spark innovation and make progression. It’s reasonable to understand anything that has strategic or even business operational implications. And it's helpful to perform analysis/research, ask several "levels of why" to diagnose real problems and solve them innovatively.

Business management doesn't believe that their company is in danger of perishing because they just cannot or don't want to see it:
Nowadays change comes so fast, when business leaders or managers are comfortable with the status quo, they often miss the big picture and become complacent. They ignore the sign that their business is in danger, because they get used to reacting, not being proactive, or lack an effective governance system or mechanisms to test it. The key to successful change management is to know what you are doing, being transparent, and enforce governance discipline so everyone knows what they are to execute on.

To avoid being disrupted, business leaders should be cautiously optimistic, have the right dose of risk appetite to explore the various environments and ecosystems to chase growth opportunities proactively. Governance is a mechanism for monitoring the actions, policies, and decisions of corporations, for improving the functioning and transparency of the company, its business strategy, and management performance. Implementing governance requires effort and expense. A good governance approach needs to clarify the ways of working, political equations among key leaders, and decision-making scenarios in the organization.

Any differing view is considered destructive negativism in lagging organizations: Today’s businesses are interdependent and ever-expanding, in traditional organizations with silo mentality and “command control” management style, many senior leaders fail to deal with blind spots because they have a very homogeneous team who always “think the same.” Different views are considered destructive negativism in those lagging companies. Problem-solving is a challenge in the dynamic change environment, how you find a solution to a complex problem depends on your perspective, but every problem has numerous angles to take into consideration and they may look very different depending on your perspective. Thus, collective insight is critical to make effective decisions, especially at the strategic level. 

We are idea-rich and vision clear through inclusiveness. Truly best of breed organizations should leverage diversified thoughts, real-time feedback, come up with actionable insights and recommended actions. Business engagement is absolutely important for the strategic viewpoint and governance effectiveness. The “flavor” of feedback or criticism actually well reflects the culture of the organization. Businesses are stronger through diversity, it allows them to explore options that one individual or a homogeneous group might not have uncovered.

The company with a dysfunctional management approach is going to struggle to make the transition to the digital paradigm. With “VUCA” digital normality, business leaders today need to keep navigating unknown and build up the team which includes the complementary mindset, diversified background, and different skillset to co-solve over-complex problems, and deal with unprecedented changes and high business velocity, to lead the journey of digital transformation confidently.

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