Sunday, April 17, 2022


Nowadays, businesses are steadily moving into the digital era with characteristics of hyper-connectivity and interdependence, linear management has its limitations

Nowadays, the characteristics of the digital era are hyper-connectivity, hyper-complexity, and interdependence; with increasing speed of changes, the traditional management is just not fit enough to respond to the emerging opportunities and risks. 

As most “classic” management principles date from the industrial revolution, people are treated as human resource aligned in the rigid hierarchy to accomplish specific tasks. The consequence of all of this is that “classic” management doesn’t take a systemic approach to management discipline. The organization has been run as the sum of pieces, rather than a holistic business that keeps growing and maturing.

Classic management is a significant part of the root cause of silo thinking:
Because of traditional management, the business units often do not work in collaboration, as they are driven by a culture of silos, they fight for the limited resources in order to do what they believe is “locally” right instead of working together in order to do what is “globally right.” Traditional management runs in silos; silos introduce lots of delays, waste, queues, and bottlenecks. The industrial organization with a classic management style based on functional silos focuses on achieving business efficiency. However, it creates gaps and often causes unhealthy internal competitions.

If the majority of organizations at the industrial age are manipulated by silo thinking and management style; to bridge functional gaps and improve business effectiveness, the interrelational management processes is being developed to help reduce the tensions, frictions, and conflicts that arise; the interactional management processes can be developed to help communicate concepts without “losing translation”; fostering collaboration is the key to creating a seamless organization when in pursuit of a good strategy, loose control, spur innovation and improve overall strategy management effectiveness.

The classic management enforces hierarchical relationship and “command & control” leadership style:
Organizational structure is a tool of strategy and leadership structure is the technique of management engineering. The overly rigid hierarchy stifles changes and encourages command & control. Digital is full of uncertainty, velocity, complexity, and ambiguity. The organizational management short-sightedness and running the business in a transactional mode with rigid processes and structures causes digital ineffectiveness in the long run.

With emergent technologies, the digital platforms and tools enhance cross-functional communication and collaboration. The classic management expects command-control, younger generations demand engagement; the classic management focuses on hierarchy; the digital management strives for collaboration. To avoid the trap of nearsightedness, the long-term business plan needs to be a cross-functional collaborative effort, not something one team does alone in a corner, in order to improve the entire digital business effectiveness

The classic management is inside out process oriented and efficiency driven:
Traditional companies are organized through rigid functions, often they are inflexible to changes. The negative side effects of traditional management styles are distrust, disengagement, and disempowerment. Just consider the time/energy/money wasted by the patterns of blaming others. Consequently, silo functions and divide-and-conquer methodologies are promoted both in organizational design and work responsibility or accountability distribution. The reductionist approach comes from attempting to isolate and understand the dynamics of the individual functions in the enterprise, some of which for the time frame will be as good as linear.

The organization that operates remaining on more linear systems thinking and silo management control systems often lag behind rapid change. In adapting to the dynamic business environment, speed matters for everyone, individually or collectively. The speed to market, the speed of change, the speed of operations. These are often the difference between success and failure. It means there is a radical shift from a silo, linear classic management style to holistic and nonlinear management discipline, with goals to improve business management effectiveness and maturity.

Nowadays, businesses are steadily moving into the digital era with characteristics of hyper-connectivity and interdependence, linear management has its limitations. One of the critical steps is to close the gaps between classic management and digital management in order to enforce cross-functional collaboration and improve business effectiveness and maturity. Holistic management is about applying systems thinking to manage resources, recognizing initiatives which take a comprehensive, anticipatory, and design approach to radically advance human well-being and the health of business ecosystems.


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