Insights

Reframing The Organization For A Digital Future Pt.1

It's a change problem more than a technology problem.

It’s hard for incumbents to organize themselves to effectively build a digital future. Why, and what can be done about it?

One problem is that many companies are organized around compartmentalized silos that have consolidated functions over many years. Aggravating the problem is that various people in different units invest in digital independently, and the mélange of systems doesn’t create a consistent customer experience, or an integrated infrastructure and architecture. This no longer works in digital. Haphazard investment is not efficient or productive, at least not for the whole organization.

The hallmark of successful digital organizations is to organize around digital platforms and the consistent customer experiences they deliver at the core. This requires converging business, technology and functions into agile teams with autonomy and accountability. This redesign has a ripple effect through many of the organizational systems and mechanisms: leadership, mandates, performance management, budgeting, matrix design, skills, talent, culture and how work is done.

You can design through that in a logical way, and figure out how to design an agile organization around digital platforms. But people don’t always respond well to logic. Many people feel digital approaches rob them of power. That their skills are no longer relevant. That the blending of business and technology in new teams overshadows individual contributions. That speed and agility requires autonomy and management by output, and allowing people to fail. That new roles and skills are emerging and may require new talent.  And not everyone’s a change agent. 

The challenge is to learn from fast-moving digital and technology players and acknowledge the paradigm shifts. This is a job for the CEO, and the Chief Human Resource Officer also plays a critical role. But it can be as tough for them as it is for managers and employees. Decisions about the new organization are predicated on understanding the nuances of digital, and its configurations for agility and speed. 

Given this situation, it’s close to impossible for many organizations to “self-cure” or self-correct. Outside help is critically important to make the right decisions and accelerate towards the speed and agility that a digital transformation promises, by:

  • Relying on insights from others who are further ahead in the journey.
  • Committing to interim management to access scarce leadership capabilities.
  • Partnering effectively to plug skill gaps.
  • Taking an unbiased look at talent and building effective skill development plans.
  • Getting coaching to move towards team-based performance management.
  • Accelerating along the right, gradual path moving from pilot to scale.
  • Effecting change at the very top of the organization, and to the culture overall. 

In the end, the digital challenge is more of an organizational challenge, and it’s often much harder to solve than the technology challenge. The CEO must drive this reorganization and cultural change, empowering teams organized around digital platforms and the consistent customer experiences they deliver.