Thursday, September 24, 2020

Lift Organizational Maturity via Systems Lens

Lifting the organizational maturity via system lens means the company needs to integrate its interdependencies, take multifaceted management disciplines, and structural approach.

Digital enterprises are inherently and intensely complex, changes do not happen in isolation from each other in predictable ways. Complex business systems are full of interdependencies, unpredictable, hard to detect any nonlinear responses. Business leaders today should apply systems wisdom to lift organizational maturity and drive digital paradigm shift smoothly.

Systems wisdom helps us get behind the "surface" validity and provides us deeper insight into the nuances of "why and how": Change is never for its own sake, it’s about solving large or small problems. You have to really dig beneath the superficial layer, get to the heart of the matter. Systems thinking enables us to see the interconnectivity between parts and the whole, the relationship dynamic, and create common rationale between different perspectives in order to diagnose the real cause of problems, get behind the surface validation, and gain a deep insight into “why does the problem happen,” and how or solve problems in a structured way. In reality, people often apply tools like linear extrapolation, based on linear models when the dynamic digital business system is not operating linearly. Thus, they often fix symptoms, not real issues, they run the business as a sum of pieces, not a cohesive whole. That further leads to silo mentality and culture inertia.

One characteristic of nonlinear systems is that small changes can have large impacts. A small error, inconsistency, or change in a system specification can totally ruin its performance. If leveraging systems thinking to fix the right problem, it perhaps makes a significant impact on fixing the chain of issues effectively. Therefore, the linear business system perception needs to be replaced by the adaptive digital system viewpoint, business leaders need to “step outside of the system, expand their vision lens to adopt different perspectives for truly coming up with a holistic solution without causing too many side effects.

Systems wisdom helps to bridge the gap between "raising awareness" and "internalization," which is not a single step but requires ongoing communication and structural efforts: With frequent disruptions, the organizational change shouldn’t be just a few random initiatives, it needs to become a differentiated business competency. It’s important to leverage system wisdom to bridge the gap between "raising awareness" and "internalization." As business transformation involves internalization of the defined values, culture, and conceptual model, the newly established behaviors will be in harmony with the internalized values. In practice, understand your work environment, understand what is required to be done, have the right resources and talent, and channel your energy into doing things that can make the difference and accelerate digital transformation.

To survive in today’s knowledge flow, don't judge anything until you can engage with the information flow, then look more closely at the mechanisms that are creating the knowledge flow. Business transformational leaders need to unfold systemic relationships, solicit feedback, listen to different opinions to avoid falling into linear thought traps, or only listen to one side of the story. Keep people awake, keep people engaged, and keep people informed, in that order, make ongoing communication, and take structural efforts to change.

Systems wisdom allows us to get “out of the box” by letting go of accumulated traditional wisdom: Unconventional wisdom often means fresh insight or “out-of-the-box” thinking. Conventional wisdom usually has a negative connotation about sticking to outdated concepts, traditions, cultures, or the old ways to do things. The big issue for many people is that with the conventional mind, you expect unconventional results. It keeps nurturing mediocrity and keeps expecting innovation out of that mediocrity. This is like walking on the treadmill. Taking steps, getting stressed out but not moving ahead. Knowledge is no doubt important but more than that is complete awareness of what is happening in the context from a system perspective, let go of accumulated traditional wisdom, and apply nonlinear logic and creativity to solve complex problems in an optimal way.

In practice, there is always a temptation to use simple linear models to understand highly complex or nonlinear scenarios. The reason people are struggling for true wisdom is that it means that they have to make a huge effort to get beyond rational linear thinking. With rapid changes and frequent disruptions, the predictive “cause and effect” in system dynamics perhaps include nonlinear cause and effect models. Gaining an interdisciplinary understanding of nonlinearity and a dynamic business ecosystem could be at the tipping point. We have to be determined to get better results somehow and it will help us try unconventional thinking processes and practices, with a better outcome.

Where being simple is more sophisticated nowadays. Lifting the organizational maturity via system lens means the company needs to integrate its interdependencies, take multifaceted management disciplines, and structural approach to drill down the critical business success factors that underpin every dimension of the business performance, and ensure the business long term prosperity.


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