Digital Maturity: Take a Journey of a Thousand Miles from Functioning to Delight

Digital Maturity

Take a Journey of A Thousand Miles from Functioning to Delight

Pearl Zhu

Copyright @2018 Pearl Zhu

All rights reserved. No part of this book may be reproduced, stored, or transmitted by any means –whether auditory, graphic, mechanical, or electronic –without written permission of both publisher and author, except in the case of brief excerpts used in critical articles and reviews. Unauthorized reproduction of any part of this work is illegal and is punished by law.

ISBN: 978-1-387-66947-9

Contents

Introduction

Chapter 1 The Characteristics of Digital Organizations

Chapter 2 The Interdisciplinary Aspects of Orchestrating a Digital Business Ecosystem

Chapter 3 Fine-Tune Organization Structures to Get Digital Ready

Chapter 4 The Next Practices to Orchestrate Digital Paradigm shift Seamlessly

Chapter 5 IT Maturity is Proportional to the Overall Business Maturity

Chapter 6 Taking a Holistic Approach to Measure Digital Transformation

Chapter 7 The Pitfalls in Digital Management

Chapter 8 From Doing Digital to Being Digital

Acknowledgment

About the Author

Introduction

A-thousand-miles journey of digitalization is to improve business maturity from functioning to firm to delight.

Figure 1 Digital Maturity Introduction

The organization or company may be in business for many years but has not matured its management disciplines and structural flexibility. Digital disruptions are inevitable, and digital transformation is unstoppable. Organizations shouldn’t just respond to them in a reactive way. It is the transformation that is reshaping our thinking, recasting the way we view ourselves and the hyperconnected world surrounding us, re-adjusting our lens to see the dynamic and expansive digital ecosystems of which we are the part of the environments. Companies need to embed digital into the very fabric of the business, explore digital management practices in a structural way. Digitalization is a journey of a thousand miles to make a seamless shift from functioning to firm to delight, and reach the higher maturity of the business to get digital ready.

The purpose of the book "Digital Maturity: Take a Journey of a Thousand Miles from Functioning to Delight" is to envision the future of the business, articulate the very characteristics of digital organizations; reimagine the interdisciplinary and hyperconnected digital ecosystem; fine-tune processes and structures of the digital business; develop the best and next practices to charter the digital paradigm shift seamlessly; leverage information & technology as the linchpin of the digitalization; take a holistic approach to measure digitalization effort; avoid pitfalls and barriers on the way; and make a leap from doing digital to being digital effortlessly.

Chapter 1 The characteristics of digital organizations: Digitalization implies the full-scale changes in the way the business is conducted so that simply adopting a new digital technology may not be sufficient. You have to transform the company's underlying functions, processes, cultures, and the organization as a whole with adjusted digital speed. Otherwise, the company will begin a decline from its previous good performance. More specifically, what are the characteristics of digital organizations, and can you make an objective self-assessment of whether your organization is a digital master or a laggard?

Chapter 2 The interdisciplinary aspects of orchestrating a digital business ecosystem: The digital business ecosystem is dynamic, nonlinear, and complex. Hence, digital management discipline also needs to be nonlinear and transdisciplinary to deal with the VUCA characteristics of the Digital Era. Overall speaking, trans or interdisciplinary approach can be applied to management with integrated multi-disciplinary methodology; it enables digital leaders to frame bigger thinking boxes, and approach problems via multifaceted lens, technically, scientifically and culturally.

Chapter 3 Fine-tune organization structures to get digital ready: Due to the VUCA nature of digitalization, the business complexity is unavoidable and change is inevitable. Organizations that are skilled at managing complexity can gain advantages by pushing the boundaries of a more complicated business mix that provides opportunities to create inter-business value. Tuning the organizational design and structure to achieve the high level of autonomy is the symbol of the digital maturity. The democratic processes will overtake hierarchical control, and that culture will become a more fundamental organizational asset.

Chapter 4 The next practices to orchestrate digital paradigm shift seamlessly: A digital paradigm is an emerging digital ecosystem of principles, policies, and practices that sets limits or boundaries; also offers the guidance for problem-solving or creating something new under the digital rules, keeps information flow and achieves a state of dynamic balance. The digital paradigm has many dimensions, it’s important to develop the best and next practices to expand systematically and charter the digital paradigm shift seamlessly.

Chapter 5 IT maturity is proportional to the overall business maturity: IT has become strategically important. It is imperative for IT and business leaders to work effectively and efficiently together to ensure that they are leveraging IT across their companies to attain enterprise-wide digital maturity; not just using IT as a digital extension, but running IT as a digital engine. IT maturity is proportional to the overall business maturity.

Chapter 6 Taking a holistic approach to measure digital transformation: The effects of an increasingly digitalized world are now reaching into every corner of businesses and every aspect of organizations. Digital transformation is not a one-time project or a stand-alone initiative; it is a continuous journey to adapt to the digital new normal of the business world. Metrics are part of transparent visual management allowing pulling.

Chapter 7 The pitfalls in digital management: Change is inevitable, and the speed of change is increasing. How capable the business is handling change and mastering digitalization would directly impact on the business competency. In fact, there is a high failure rate of Change Management statistically, and more than two-thirds of business change efforts fail to achieve its expectations. Thus, it is important to identify the big barriers and potential pitfalls which stifle changes and impede your progress in reaching the high level of digital maturity.

Chapter 8 From Doing Digital to Being Digital: Organizational digitalization is not just about leveraging the latest technology gadgets or applying the fancy tools. At the high maturity level, organizations have to stretch out in every business dimension for driving the full-fledged digital transformation. There are a couple of evolutional ecosystems stages businesses have to experience in order to ride above the learning curve and move up the business maturity from Doing Digital, to Being Digital.

With the increasing pace of change and unprecedented uncertainty, enterprises of the future are increasingly exhibiting VUCA characteristics in various shades, intensity, and extensiveness. Companies have to stretch out in every business dimension for driving the full-fledged digital transformation, in order to adapt to the new business dynamic.

Figure 2 Digital Flow

●       The state of digital flow: Digital means flow - mind flow, energy flow, information flow, idea flow, and business flow. The classic organizational management usually enhances silos and overly rigid hierarchy. But digital organizations, like individuals, are living things; need to be in flow to operate smoothly and to exercise for keeping energized and achieving the state of delight. From information management perspective, a highly intellectual and highly effective digital organization has a higher level of responsiveness because information can flow to the right people, allow them making right decisions at the right time to bring better results and accelerate digital speed. In fact, in this information-abundant digital era, there isn't really much of an enterprise without the massive oceans of information that flow through the enterprise at any given split second. It is so critical to streamlining information flow across functional boundaries because information brings about business ideas and insight to enable organizations grasping business growth opportunities and preventing potential risks, to build a people-centric organization. Information flows and penetrates through the business to make the digital organization more responsive, dynamic, antifragile, and therefore, delightful.

●       The full spectrum of digital innovation: Digital is the age of innovation. Innovation is to have a new perspective on things and gain the benefit by doing something different. Leading only through operational considerations is not the way forward. In most organizations, innovation is still serendipity. When organizations just follow the old rules, have we always do things like that mentality and less appetite for change, they are getting stale, without maximizing its full potential. To improve the business maturity, digital organizations should build innovation as a differentiated business competency, learn how to solve problems creatively and manage a balanced innovation portfolio systematically. Innovation follows basic rules, which are adapted depending on the company's situation and ambition. Digital innovation has a broader spectrum, it can be categorized as empowered innovation (creative disruption), sustainable innovation (better version of product/service), efficiency innovation (process improvement), and soft innovation (management/communication/culture rejuvenation). Innovation is one of the core activities of the digital revolution and societal progress, in order to move up the digital maturity from functioning to firm to delight.

●       The delightful working environment with harmonized minds, hearts and hands: Statistically, there is the very low employee engagement rate in many organizations across the industrial sectors. There will be better business results achieved if it's a place where people look forward to coming to work, know that they are appreciated and trusted, have work that interests and challenges them, and have some fun. It means the challenge for today’s business management is how to win hearts, minds, and profits to improve the top line business growth. Build an open environment to encourage inquisitiveness and inspire innovation, push teams to think in the bigger box and develop a culture of learning and creativity in the workplace where the only thing you get fired for not asking hard questions. In the high-mature digital organizations, thinking differently is the foundation to build an inclusive and innovative team. One of the key determinants of whether an organization can move to new digital structures is the development level of the people, either at the cognitive level or skill/capability level. In practice, creating positive change and building a delightful working environment is a joint effort and co-responsibility of management and employees. It needs to involve your entire team at all levels, exhibit positive thinking and proper behaviors at all times. Shifting a team's focus to bigger picture objectives is key and that managers are the owners of this messaging. The goal is to overcome the barriers and roadblocks that have so far hindered people engagement and harmonize minds, hearts, and hands to unleash collective human potential.

Organizational maturity is assessed based on the overall business effectiveness, efficiency, operational excellence, responsiveness, performance, innovation, intelligence, resilience, and people-centricity. There are different types of organizations and they are at the different stages of the growth cycle in their business maturity; equally, individuals have their own learning, growth, and maturity cycles as well. In practice, taking the digitalization journey of a-thousand-miles is to improve business maturity from functioning to firm to delight.

Chapter 1 The Characteristics of Digital Organizations

Going digital is more like a journey than a destination. Predicting and preparing the next level of digitalization is an iterative learning and doing continuum.

Figure 3 The Characteristics of Digital Organizations

Just as the industrial revolution did a century and a half ago, the digital revolution is reshaping the way we live, we think, and the way we work. The digital world is dynamic, interconnected, and interdependent, with the abundance of information. A digital paradigm is an emerging digital ecosystem of principles, policies, and practices that sets limits or boundaries; and also offers the guidance for problem-solving or creates something new to achieve a state of dynamic balance. Leadership is all about making directions and driving changes. How to predict and prepare the next level of digitalization?

●       The next wave of digital disruptions: Organizations large or small are on the journey of digitalization, adapting to changes in faster speed and expand digitalization in every dimension of the business. The matter of fact is that the changes sweeping the world are hugely disruptive and there is nowhere to hide. The emergence of potential opportunities for exploiting digitization is likely to follow a nonlinear pattern as the pervasiveness of an organization's digitization journey increases. Though technology is often the disruptive force of digitalization, the next wave of digital disruptions will become more volatile, unpredictable, diverse, and overwhelming, due to lack of linearity, increased flux and complexity. The digital ecosystem with all aggregates challenges and opportunities propels organizations further towards the challenges. Digital organizations become more complex due to the accelerating speed of changes; nonlinear connectivity, and exponential growth of information, etc. These are emergent digital new normals affecting organizations to a different degree, and how promptly the organization can respond to changes, grasp the opportunities and manage risks will make the business stand out as the digital master.

●       The next chapter of innovation: Digital is the age of innovation. The hyper-connecting nature of digital offers particularly fertile ground for developing cross-industrial ecosystems and innovation opportunities, in part because ways of doing business and customer expectations both tend to be more flexible than the siloed industrial age. To envision the next generation of innovation, digital leaders need to ponder further: Is it possible to integrate the innovative concepts into a comprehensive approach that can generate better solutions to the seemingly insurmountable large-scale problems? How to deal with both innovation management and management innovation in a structural way? Can we develop an approach with a mix of hard innovation and soft innovation, which also places social, political and ethnic differences within a common framework to generate meaningful progress toward the next level of innovation? What’re the best or next innovation practices, what is the structure for innovation? What can you do differently? You need to listen, convey, inspire, motivate, and bring in people to share the vision, inspire the mission, communicate ideas, and advocate people-centricity. There are many components in an effective innovation environment or ecosystem: Each component by itself may not cause a good environment, but collectively, they can weave an innovation ecosystem with the important elements such as leadership, culture, capacity, practices, tools, recognition system measurements, and risk management.

●       The next round of digital practices: The real power of digital technology comes from the innate appeal of interacting socially and intellectual stimulation that people derive from sharing what they know, expressing opinions and learning what others know and think. The real power of the digital organization is based on its intelligence to decide, the capacity to innovate, and the speed of changes. One of the key determinants of whether an organization can move to the digital new normal is the digital maturity of its people. There are many who do not feel comfortable with self-direction, nor do they look to their jobs for the level of potential that is possible. Therefore, the next round of digital practices are people-centric, how to build a work environment for people to communicate and collaborate, how to create the right mix of automation and collective creativity; how to grow a heterogeneous team, and how to define digital fit. Organizations today need to constantly improve the business and see change as an opportunity while keeping a holistic overview of the business are the core messages of the text. When people are ready for changes and processes are not overly rigid, organizations are frictionless to catch up the change speed. A high-mature organization always looks for opportunities across the business to increase the usage of emergent digital technologies accordingly and charter the digital paradigm shift seamlessly. The next round of digital practices should focus on building a set of differentiated digital capabilities which are modular, dynamic, and nonlinear.

●       The characteristics of digital organizations: Organizations large or small are on the journey of digital transformation. Being digital ready goes beyond just applying the latest digital technology, or renovate IT organization only. Digitalization implies the full-scale changes in the way the business is conducted so that simply adopting a new digital technology may not be sufficient. You have to transform the company's underlying functions, processes, cultures, and organization as a whole with adjusted digital speed. Otherwise, companies will begin a decline from its previous good performance. More specifically, what are the characteristics of digital organizations, and can you make an objective self-assessment whether your organization is a digital master or a laggard?

(1)   Holism: the holism is the concise word to describe the very characteristics of the digitalization - hyperconnectivity, and interdependence; it means the parts of a whole are in intimate interconnection, because they cannot exist independently of the whole, and it means the digital business has to break down the silos and ensure the business as a whole is greater than the sum of its part.

(2)   Autonomy: Digital disruptions are inevitable, and digital transformation is unstoppable. Organizations shouldn’t just respond to them in a reactive way. The new paradigm that is emerging is a digital organization that is more responsive, holistic, vibrant, self-driving, innovative, and above all enhances and supports the living organization. In fact, autonomy becomes one of the most critical characteristics for digital organizations to thrive as well as the distinctive symbol of achieving high-level digital maturity.

(3)   Hyperconnectivity: Hyperconnectivity is one of the most critical characteristics of the digital business. Digital organizations arise when the scale of the interrelations, interactions, or interrelational interactions brings the new cycle of the business growth, information flow, innovation, and maturity. The digital organization is a living thing, it cannot be taken apart. As you cannot understand a cell or a living thing if you isolate it from its context. It is a cohesive whole.

(4)   Simplexity: Because uncertainty comes with complexity. Simplicity vs. complexity is not only an age-old dilemma but also the opposite ends of the same spectrum. Complexity can either stimulate or stifle innovation. Thus, simplexity is a portmanteau word to reflect the digital reality and how to strike the right balance to achieve the next level of digital maturity.

(5)   Interdependence: Humans progress has gone through three stages: Dependence, independence, and interdependence. What works and what doesn´t, depends on the nature of the organizational interdependence that needs to be enabled. The collaboratively interdependent organizations can reach the higher state of business maturity because limited hierarchy works best in a creative environment where the free flow of ideas and their prompt implementation is a key element of business success.

(6)   Nonlinearity: Digital is fluid, digital is also complex. It becomes complex if things do interact, particularly in the case of non-linear interaction, you can't separate things properly or you cannot predict the actual effect of interaction straightforwardly. In fact, nonlinearity is one of the very characteristics of digital business ecosystems.

(7)   Coopetition: Competition is part of the natural dynamics of life. In nature, competition is for evolution; in business, competition is for surviving and thriving. In the silo industrial age, competition is about commanding and controlling to keep the status quo; and now we are stepping into a deeper and also far more advanced digital era steadily. Coopetition (cooperation + competition) is perhaps the right approach for running a highly energetic and highly collaborative digital business.

(8)   Plasticity: The neuroplasticity is the brain’s ability to rewire, connect, and adapt; the business plasticity is the organization’s capability to change, adapt, and innovate with speed. Many organizations are on the journey of digital transformation which represents the increasing speed of changes, the overwhelming growth of information, the shortened life cycle of knowledge, the new chapter of digital innovation, and the next stage of business maturity. Thus, organizational plasticity is the digital trait of the organization.

(9)   Adaptability: While turbulence is not new, and uncertainty is the new normal. Adaptability is to be understood as the ability of systems or people adapts themselves smoothly and fast to changed circumstances. Adaptation is an inherent characteristic of humans to survive. Self-adaptation is a phenomenon strictly linked to see learning and knowledge increasing if shared and consumed. In the ever-changing digital dynamic, adaptability is not just a soft skill, but the hard capability.

(10)Balance: The black and white boundaries continue to diminish in the 21st century due to the occurrence of increased economic integration, digital dynamic characterized by the movement of information, people, and businesses. Therefore, it is more critical than ever to maintain the right level of digital balance. In fact, striking the right digital balance is a never-ending business life cycle. 

(11)Inclusiveness: We are stronger through diversity, it allows us to explore options that one individual or a homogeneous group might not have uncovered; we are idea-rich and vision clear through inclusiveness. Diversity is the engine for creativity and inclusiveness is a facilitator for merging building blocks of new ideas, fresh insights, and ultimate wisdom.

(12)Hybridity: We live in the world with both old and new, embracing digital is inevitable as that it is now part of reality. The latest enterprise digital computing technologies enable seamless virtual platforms, enhance physical organizational structures, empower workforce sharing the thoughts and