Friday, August 28, 2020

Improve Organizational Manageability via Deepening Systems Understanding

The digital organizations are not the "closed system" but the dynamic digital ecosystem which is complex, interrelated, and interconnected, full of opportunities and risks. 

Digital organizations are the hyper-connected and interdependent complex dynamics of the ecosystem within which the business is competing and with which the business is unavoidably entangled. They could be disrupted by emerging trends or disturbed by nonlinear events. 

Thus, it’s important to leverage systems wisdom to deepen understanding of interfaces and interactions associated with complex businesses and engenders new perspectives or actions as part of the process of creating a cross-disciplined management approach to build dynamic business competency.

It is gaining the knowledge necessary to understand and manage a complex business system: The business ecosystem is complex and the organization is hyperconnected, nonlinear, and contextual. Think of digital businesses as nodes along a timeline, a change in each node will have some effects internally on that node but also with other nodes along with the same and even other timelines. In some cases, a small effect in one place can cause a cascade of events that produce unproportional impact. Therefore, business management needs to gain a systematic understanding of both visible and invisible success factors, apply system lens and interdisciplinary approach to planning, collect, process, and refine real-time information to gain business insight, fine-tune underlying business structures and systems, enforce inter-organizational linkage, and take step-wise actions to achieve expected business results.

Organizations generally consist of varying intersecting and interacting systems that can be perceived through the lenses of sociology, psychology, technology, anthropology, and economics, etc. Thus, it’s important to leverage System principles to understand the interconnectivity and do an in-depth cause-effect analysis. Without an in-depth knowledge of business context and the contextual understanding of people, processes, and technology at the system level, the blind spots and gaps are inevitable.

It is to understand how people factor affects the business system: The digital era upon us is about people. It’s important to understand the organization as a complex system and the people of the complex system. It is about applying a system's lens to understand how the people factor affects the business system, and then, manage the complex system and the people of the complex system as the organic living thing. In fact, people are the center of the interwoven business ecosystem within which there are multi-layer and multi-dimensional relationships such as cross-functional relationships, vendor relationships, customer relationships, and other important shareholder relationships, etc, and there is multidimensional shareholders’ value the business management needs to achieve for reaching the next level of organizational maturity.

The arising new paradigm is all about people-centricity. Digital adaptation is faster if made with the full involvement of people by breaking down silos and overcoming barriers such as outdated processes, procedures, practices, etc. From the people management perspective, shaping the digital business is all about framing a structure that encourages growth mindset, cross-functional communication, and collaboration; continually delivers what the business needs and takes further steps to maximize business potential. Digital leaders should empower people with effective tools, motivate people to explore growth opportunities but understand the learning curve, seek additional knowledge and experience, develop problem-solving competency, and truly make change happen and sustain.

It is to understand business as a living system with a set of interdisciplinary “best & next” practices: Fundamentally, the purpose of Systems Thinking is to solve problems and create desirable futures. With unprecedented uncertainty, the management needs to dig through: Is the “unknown” factor not identified with the scope of the business planning or is it caused by “unknowable” - beyond the knowledge and understanding of management. Every organization needs to develop tailored practices via leveraging effective system tools or methodologies and use them wisely with the expertise to really add value or manage “VUCA” new normal smoothly.

A shift from what a system is to what it does to its context is truly about applying system principles to develop a set of interdisciplinary best and next practices with a combination of people and how they are used to doing things for either framing the right problem or solving it effectively. From a Change Management perspective, the real challenge is to understand where and how you can and should improve to get the biggest effect, focus on managing a portfolio of relevant cross-border strategic synergies, and scale-up across the digital ecosystem.

The digital organizations are not the "closed system" but the dynamic digital ecosystem which is complex, interrelated, and interconnected, full of opportunities and risks. The business management style should shift from the ” hard force” driven, and out-of-date disjointed top-down management paradigms to a large dash of “freedom to manage,” with fluid and proactive style having some “soft touch.” So collaboratively, they can improve organizational manageability and drive transformative change smoothly.


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