Both organizational design and process are important elements in digital transformation.
Compared to the mechanical nature of the industrial organization, digital organizations are like the living systems that can self-adapt and self-renew in thriving as high-performance businesses. From the organizational structure perspective, the design of a digital organization will have a significant impact on how performing and considerate the organization is.
Is the business structure interrelational: Due to rapid changes, the business complexity has increased exponentially due to less structure, fewer rules, high velocity, over complexity, hyper-diversity, unpredictability. The business management needs to check up their organizational hierarchy and scrutinize their management discipline: Does the chain of communications flow seamlessly, or does it stop at one level? Can the right people get the right information to make the right decisions timely? How to optimize business structure and process to enforce cross-functional communication and collaboration.
Are management structures and processes developed to reduce tensions, frictions, and conflicts that arise? Organizations become more fluid to adapt to the rapid changes. Digital management processes should be developed to help communicate with the “two-way” street and keep business flow across the boundaries without friction. Business management fosters communication, collaboration, and accountability so the large group of people can interact, form, and amplify collective capabilities to deal with common business challenges and achieve well-set goals.
Business management practices need to be informative, interactive, and intelligent, the inter-relational management processes need to be developed to reduce the tensions, frictions, and conflicts that arise. It also helps to diagnose business issues with a holistic viewpoint and take actions via continuous interaction and cross-functional collaboration. To harness the business interconnectivity and improve business changeability, it will be effective to examine, challenge, and perhaps even shift the underlying paradigms, breaking down silos, flattening organizational hierarchical layers, increasing horizontal linkages, and harnessing cross-functional collaboration.
Are the practices of business management interactional? In traditional organizations, the business processes and structure are formal and even overly rigid, often there are frictions existing between underlying functions, structures, or overall strategy management practices. Organizations deliberately make the close alignment among the company’s strategic direction. The management processes should enforce interrelational interactions and harness cross boundary collaboration. It requires that you understand your business from a cross-functional process perspective in some detail, leverage the emerging digital technologies, apply quality information to improve process intelligence and make continuous improvement
When the speed of change is accelerated, organizations have to improve structural resilience for speeding up products/services deliveries and improving business agility. Due to the hyper-connectivity of the digital nature, the trend toward softer and flatter organization structure is clear. New generations of digital technologies such as a social collaboration platform are enabling not only the structured processes of the past but also the unstructured processes of business interactions. In fact, business process management is moving into an unstructured, more collaborative age for enforcing cross-functional communication and collaboration, harnessing innovation, and accelerating business performance of the entire organization.
Both organizational design and process are important elements in digital transformation. The organization structure and its impact on efficiency and innovation could play either a positive or negative impact. Organization development or reinvention is to help organizations reinvent itself by providing an environment within which employees at all levels are inspired and allowed to commit their best in the organization’s long term success. The harmonization of intertwined leadership structure and organizational structure can accelerate business performance unleashing organizational system potential and improve organizational maturity.