Tuesday, April 13, 2021

Reinventing Business to Get Digital Ready

Reinventing business to get digital ready is an evolutionary journey with ups and downs, promises and perils on the way. 

We are stepping into the digital economy with the very characteristics of nonlinearity, diversification, interdependence, and hyperconnectivity, etc. The intensity of darkness varies with each of us, and so is our understanding and action under the same situation or different circumstances. 

A well developed strategic planning provides direction, sets guidelines, diagnoses issues, and outlines the preferred course of actions. But with unprecedented uncertainty, how to balance the varying factors to ensure the business management effectiveness and achieve high performance business results.

Comprehensiveness and simplicity: Plan is nothing, planning is everything. The degree of planning has a positive correlation with the degree of uncertainty and unpredictability. The paradox of digital management is that there is one side pressure to strategy to be comprehensive. On the other side, there are requirements to strategy to be simple as the world becomes more dynamic. With today’s business velocity and frequent digital disruptions, if you plan in detail as far ahead as the end state, much planning time and effort will be wasted. The right attitude is: “Keep one eye on the operation, the other on the horizon.” Besides a clarified vision, abstract level of guidelines, a comprehensive strategic planning needs to get to the level of specifically achievable goals via “5W+1H” navigation, such as "who is doing what, with whom, how are they doing it and when or where does it need to be started and finished by.” 

From an implementation perspective, there are always constraints in the businesses, so simplicity implies to build as little as possible, to maximize the amount of work not done and maximize outcome to benefit customers. Simplicity is an aspect of “appropriate” abstraction. It’s important to understand the big picture, removing complexities such as assumptions or dependences and adding clarity and purpose. Something more balanced and interpreted is called for, to keep things simple, but not simpler. The dynamic digital organization needs to be simplified and elaborated in a well-organized effort for adapting to emergent business changes in its own functions, structures, and behaviors. You are not only building the system but also renewing and maintaining the system for long-term.The art of abstraction is to imagining, the science of abstraction is to unifying. Simplicity is a mental attitude to see things as and what and where they are and be content and cool as it is. To achieve simplicity, you would have to address the complexities of the subject matter. Ideally, the conscious recognition and use of the complexity inherent in organizational systems leads to greater simplicity. There is a structural beauty in truly complex or self-organizing systems.

Differentiation & alignment:
Differentiation is one of the many strategic options in generic strategies available to any business. You have to plan it right and make it a true value differentiator from a different perspective. For many companies, it is increasingly difficult to differentiate from their competitors. The question of whether differentiation is the best strategy has to be answered case by case. Thinking that differentiation is always good and you have enough resources can be a great error. Differentiation just for the sake of being different isn't a strategy, it's a tactic. The real differentiation is to create true value, look forward, not backward, and present the uniqueness to shine through.

Besides differentiation, alignment is fundamental and multidimensional to ensure a seamless strategy implementation. Strategic alignment is a structural process and the result of linking the organizational strategy and its objectives with every business function and employee. Misalignment is usually caused by silo thinking, miscommunication, lack of cross-functional understanding and collaboration, or simply wrong people put in the wrong position to solve the wrong problems. Strategic alignment occurs on multiple levels, but it presupposes the ability of each link to articulate their strategic intent. Alignment is a continuous process that demands continuous attention, deliberately close alignment among the company’s strategic direction. Those organizations that have a high mature strategic alignment via integration, collaboration, harmony, etc, outperform their competitors and tend to be more responsive to the business dynamic.

Commitment and flexibility: The degree of planning has a positive correlation with degree of uncertainty and unpredictability. Because it is easy to look like you are making progress by focusing on the tactical issues. It is very hard and requires courage and skills to really tackle what is wrong at the strategic level and make a commitment to enable and sustain changes. Top management teams should mentally review the pros and cons, potential cause and effect to other areas, short and long-term financial implications and the overall impact on the company, prior to making a commitment and suggesting an alternative approach.

Flexibility is about figuring out alternative ways to do things and make seamless strategy execution. Digital organizations achieve strategic flexibility by developing the lego-like module design architecture and capabilities with quality and reusability. The agility and flexibility are manifested in the ability of managers to change their style of decision-making in response to a wide range of parameters such as urgency, level of risk, time constraints and the regional and cultural differences. With a flexible attitude and focus on the arrival point, success will be contingent upon culture, the state of the business, leadership, communication, team membership, and the overall commitment to the goal. The high mature digital organizations are highly conscious about what’s happening in their environment, with the ability to adapt to change timely, grasp opportunities, and prevent risks effectively. Strategic planning deals with horizontal scanning environmental and social monitoring, distributed sensing capability and knowing what to look for, how to set guidelines when to make choices.

The digital business cycle could be viewed as resulting in emergent means of finding a vision or mantra reflecting the “mind and soul” of the company to accelerate the pervasive digitization via continuous balance cycles of participation, adaptability, expansion, innovation, and optimization. Reinventing business to get digital ready is an evolutionary journey with ups and downs, promises and perils on the way. It’s important to know how to strike the right balance, drive an iterative planning and execution continuum, make a stride toward the future and lead their organization to become a competitive differentiator.


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