Wednesday, August 5, 2020

Perils of Digital Transformation

Business transformation isn’t just an extension of continuous improvement but a breakthrough. 

With rapid changes, the exponential growth of information, fierce competition, and continuous disruptions, businesses today need nothing less than a paradigm shift in their thinking about the fundamentals of how organizations work to build an ever-evolving, hyper-connected, and highly energetic digital organization. 

The "VUCA" new normal forces digital leaders to be cautious of barriers and pitfalls on the way, be proactive, and get really creative on how to apply multidimensional disciplines to manage a system paradigm shift.

Multiple versions of the truth: Lots of data and information are floating around companies, more does not always mean better, in many companies, silo mentality dominates the organizational management philosophy and practices. And in many cases, each manager developed a specific business unit or individual agenda and not necessarily linked to what drives or could improve the business as a whole. At times, they only want to see things from their own point of view- see what they want to see, or, hear what they want to hear. So there are “multiple versions of the truth” existing across the company, people, especially management get confused and make poor judgment and cause conflicts and slow down the business speed. To improve the organizational maturity, what can be unifying is looking at each function in the enterprise as a subsystem and then finding a unified means of looking at the essence, and enforce the "middle ground" digital management practices.

Developing a fact-based change strategy is challenging. Data is raw, but the information is contextual. When making strategic decisions, for example, two different business units will come up with two very different conclusions based on the same data, depending on how it is analyzed and presented. That perhaps compromises the overall cohesiveness of strategy management at the company scope. To avoid such pitfalls, we all should walk in others’ shoes and see the problem or situation from the others’ point of view. And then unify into a common understanding by bridging cognitive differences. Fact-based decision making at the strategic level is a collaborative activity that does require concrete buy-in from all stakeholders. It is also important to understand the whole meaning of functional dialects and business cultures or subcultures without "getting lost in translation," in order to set the right guidance in a cohesive way to drive change smoothly.

Boil the ocean: With the exponential growth of information and overwhelming change dynamic, we no longer live in the world that runs in years, but one that runs in minutes. Complexity, velocity, ambiguity, etc, are the new normal, with so many distractions or disruptions, leading business forward is extremely challenging because there are so many things going on with a mixed bag of opportunities and risks, and it’s easy to get into “boil the ocean” syndrome. The organization has limited resources, time, and talent, they can’t chase all emerging opportunities or capture everything that looks shiny.

In fact, the organizational ecosystem environment is constantly changing, forcing the business to keep adjusting and streamline flow. To decompose complexity or deal with possible stagnation, organizational management needs to dig into the root causes of mismanagement by checking: Is it caused by a disconnected or distant layer of management or leadership or disengaged employees? A sea of administrative bureaucracy? Lack of clarity or direction, mistrust, or unclear priorities? Etc. Digital Transformation requires a commitment to well-set goals. The imbalanced business priority will perhaps get the business stuck and make the company fragile, and cause the business to fall into the “boiling the ocean” syndrome or “busyness” cycle without going anywhere.

See the trees, not the forest:
Digital Transformation is a large scale of change, and it takes a holistic approach. Too often, the pitfall is that transformational change is acted on the basis of improving one part of an organization at the expense of other parts of the organization. Because the management sees the trees but ignores the forest. They do not build up a body of interdisciplinary knowledge about underlying attributes for change success. Or some key management roles go under-resourced and often misunderstood the very purpose of business transformation.

Modern digital organizations are not just the sum of functional pieces, but an integral whole. Digital Management is about how to leverage Systems Thinking for setting general management principles to understanding how the “part” interconnected with the” whole.” Someone above the silo is supposed to piece all the individual puzzle together. It’s about seeing interrelationships rather than isolated things, for understanding patterns of changes. Business transformation isn’t just an extension of continuous improvement of the current business, but a breakthrough. It requires digital leaders to think outside the current constraints and comfort zones, shape a different vision, and raise the courage to pursue it, harness cross-functional communication and collaboration to ensure change success.

The digital transformation is a radical change, with all sorts of ups and downs, bumps, and curves, roadblocks, and pitfalls on the way. The digital mindset needs to be nurtured and the change mechanism should be embedded into every aspect of the businesses, so the transformation will happen naturally, and the organization can reach the next level of business growth and maturity.


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