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Currently viewing the tag: "Digital Transformation"

Learning n Development

Survival of a business in this digital age largely depends on its ability to timely embrace Digital Transformation.  Digital Transformation entails using Digital Technologies to streamline business processes, culture, and customer experiences.

In order to compete today—and in future—and to enable Digital Transformation, organizations should work towards fostering a culture of continuous learning, since Digital Transformation depends on learning and innovation.  The organizations that holistically embrace this culture are called “Next-Generation Learning Organizations.”

The next generation of Learning Organizations capitalize on the following key variables; Humans, Machines, Timescales, and Scope.  These organizations incorporate technology in enabling dynamic learning.  Creating Next-Generation Learning Organizations demands reorganizing the entire enterprise to accomplish the following key functions to win in future:

  1. Learning on Multiple Timescales
  2. Man and Machine Integration
  3. Expanding the Ecosystem
  4. Continuous Learning

Learning on Multiple Timescales

Next-Generation Learning Organizations make the best use of their time.  They appreciate the objectives that can be realized in the short term and those that take long term to accomplish.  Learning quickly and in the short term is what many organizations are already doing, e.g., by using Artificial Intelligence, algorithms, or dynamic pricing.  Other learning variables that effect an organization gradually are also critical, e.g., changing social attitudes.

Man and Machine Integration

Rather than having people to design and control processes, Next-generation Learning Organizations employ intelligent machines that learn and adjust accordingly.  The role of people in such organizations keeps evolving to supplement intelligent machines.

Expanding the Ecosystem

The Next-generation Learning Organizations incorporate economic activities beyond their boundaries.  These organizations act like platform businesses that facilitate exchanges between consumers and producers by harnessing and creating large networks of users and resources available on demand.  These ecosystems are a valuable source for enhanced learning opportunities, rapid experimentation, access to larger data pools, and a wide network of suppliers.

Continuous Learning

Next-generation Learning Organizations make learning part and parcel of every function and process in their enterprise.  They adapt their vision and strategies based on the changing external environments, competition, and market; and extend learning to everything they do.

With the constantly-evolving technology landscape, organizations will require different capabilities and structures to sustain in future.  A majority of the organizations today are able to operate only in steady business settings.  Transforming these organizations into the Next-Generation Learning Organizations—that are able to effectively traverse the volatile economic environment, competitive landscapes, and unpredictable future—necessitates them to implement these 5 pillars of learning:

  1. Digital Transformation
  2. Human Cognition Improvement
  3. Man and Machine Relationship
  4. Expanded Ecosystems
  5. Management Innovation

1. Digital Transformation

Traditional organizations—that are dependent on structures and human involvement in decision making—use technology to simply execute a predesigned process repeatedly or to gain incremental improvements in their existing processes.  The Next-generation Learning Organizations (NLOs), in contrast, are governed by their aspiration to continuously seek knowledge by leveraging technology.   NLOs implement automation and autonomous decision-making across their businesses to learn at faster timescales.  They design autonomous systems by integrating multiple technologies and learning loops.

2. Human Cognition Improvement

NLOs understand AI’s edge at quickly analyzing correlations in complex data sets and are aware of the inadequacies that AI and machines have in terms of reasoning abilities.  They focus on the unique strengths of human cognition and assign people roles that add value—e.g., understanding causal relationships, drawing causal inference, counterfactual thinking, and creativity.  Design is the center of attention of these organizations and they utilize human imagination and creativity to generate new ideas and produce novel products.

3. Man and Machine Relationship

Next-generation Learning Organizations (NLOs) make the best use of humans and machines combined.  They utilize machines to recognize patterns in complex data and deploy people to decipher causal relationships and spark innovative thinking.  NLOs make humans and machines cooperate in innovative ways, and constantly revisit the deployment of resources, people, and technology on tasks based on their viability.

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COVID-19 has taken the world by a storm. Financial markets, manufacturing, services, and tourism have been hit hard.  In fact, it has also changed the way we work, communicate, interact, and shop more than any other disruption in the decade.

As a result, there have been key changes in Consumer Behavior. There is a growing reluctance to visit crowded places, the increasing shift of work from the office to home, and the higher propensity for digital adoption and Digital Transformation.  The changes are inevitable. For businesses to stay relevant, businesses have to adjust to the new norms.

We are now entering the Low Touch Economy, a new normal where there are behavioral shifts and entirely different rules and policies.

A Glimpse of the Low Touch Economy

A new economy will be shaped as a result of new habits and regulations. There will be reduced close-contact interaction, tighter travel, and hygiene restriction.

The global economy will transition into a Low Touch Economy as an aftermath of the COVID-19 2020 crisis.  A Low Touch Economy will be characterized by entirely different rules and policies, habits, and behaviors. New rules and policies will be passed that will limit the number of people gathering, restrict travels, hygiene requirements, and strict adherence to practices that will ensure the protection of vulnerable groups.

In the work organization, there will be more people working from home and there will be a greater need for access to e-commerce and logistics.  With the Low Touch Economy, traditional business and lifestyle norms will be greatly challenged and behavioral shifts occurring.

The 10 Trends in Consumer Behavior

While COVID-19 has made a great dent in the global economy, it has also triggered a shift in human behavior. There are 10 trends in Consumer Behavior driven by COVID-19 that are becoming more and more prevalent.

Let us take a look at the first 4 Trends in Consumer Behavior.

Trend 1: Mental Health

As a result of COVID-19, there is an increasing state of anxiousness, loneliness, and depression.  People have started feeling isolated, experiencing lower productivity, and even loss of a job. Relationships have also been affected and the cost of healthcare increased.

Trend 2: Hygienic Concerns

The second trend is geared more on limiting COVID-19 exposure on the job.  It is the ability to respond to varying levels of disease transmission through prevention and control measures.

As a result of this trend, there has been increased caution when interacting with people and products.  In fact, establishments, offices, and even individuals are increasingly demanding for formal proof of hygiene and current health status.

Trend 3: Travel

Travel and Tourism is the trend that has the biggest impact as an industry.  There are now extended travel restrictions, even within one’s country.

We can expect local tourism to flourish and there will be longer extensive holidays with quarantine taken into consideration.

Trend 4: Working from Home

Trend 4 is a COVID-19 preventive measure that used to be an office perk.  There is now a need to optimize remote work home setups, which are beyond typical office jobs. As a result of this trend, individuals and families will start figuring out news ways to balance work-life needs within the confines of home.

With more people working from home, we can expect a reduction in office space and infrastructure.  At the home front, there will be the presence of special equipment, machines, and advanced video/audio setups to accommodate the change in lifestyle.

There are 6 other trends on Consumer Behavior that have propped up as a result of the COVID-19 pandemic. With these trends, there are response mechanisms we can expect from organizations, families, and even individuals.

What to Expect

With the changes that the COVID-19 pandemic has brought, we can expect organizations to come up with response mechanisms that will address concerns arising from these trends. Relative to mental health, risk-stratified crisis counseling needs to be initiated as additional support to employees. In fact, it is essential that organizations provide comprehensive benefits for their employees that will center on mental health.

For each trend, a corresponding response mechanism must be put in place if we are intent on ensuring the well-being of our employees and the continuity and stability of our organization.

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Learning n DevelopmentTransformation of an organization into a Next-generation Learning Organization (NLO) is a challenging endeavor.  The main hurdles include convoluted hierarchies, bureaucratic red tape, delayed decision making, and complicated organizational systems and processes.

To develop a learning organization, leadership needs to trim down bureaucracy and complexities.  They should make the best use of technology to gather holistic real-time data, deploy Artificial Intelligence at scale, and develop data-driven decision-making systems.

Five Core Pillars of Learning are essential for the creation of a Next-generation Learning Organization, including:

  1. Digital Transformation
  2. Human Cognition Improvement
  3. Man and Machine Relationship
  4. Expanded Ecosystems
  5. Management Innovation

Let’s take a deep dive into the first 3 Core Pillars.

1. Digital Transformation

The first pillar is Digital Transformation.  Next-generation Learning Organizations (NLOs) are characterized by their speed of learning and their adeptness to take action based on new insights.  They use emerging technologies to automate as well as “autonomize” their businesses, without relying too much on human intervention and decision-making.

By autonomizing, the NLOs enable machines to learn, take action, and evolve on their own based on continuous feedback.  They create integrated learning loops where information flows automatically from digital platforms into AI algorithms where it is mined in run-time to gather new insights.  The insights are passed to action systems for necessary action that create more data, which is again mined by AI, and the cycle continues, facilitating learning at fast pace.

2. Human Cognition Improvement

Next-generation Learning Organizations (NLOs) schedule time for their people to have unstructured reflection on their work.  While most organizations fear disruption of human work in future by AI and machines, NLOs assign unique roles to their people based on human cognition strengths—e.g., understanding relationships, drawing causal judgment, counterfactual thinking, and creativity.  These organizations are aware of AI’s advantage—in analyzing correlations in complex data promptly—as well as its shortcomings in terms of reasoning abilities and interpretation of social / economic trends.  NLOs make design the center of their attention and utilize human creativity and imagination to generate new ideas and produce novel products.  They assign roles accordingly, inspire imagination in people by exposing them to unfamiliar information, and inculcate dynamic collaboration.

3. Man and Machine Relationship

NLOs foster innovative ways to promote collaboration between people and machines.  They recognize that this helps them in better utilization of resources, maximize synergies, and learn dynamically.

To create effective collaboration between people and machines, NLOs develop robust human-machine interfaces.  The existing AI systems lack the ability to decipher everything, which is an area where humans excel.  NLOs supplement these shortcomings by setting up human-machine interfaces, where humans assist the AI by corroborating its actions and suggesting sound recommendations.  These learning organizations bifurcate responsibilities based on the risks involved, assign humans and machines appropriately against each job, and select a suitable level of generalization and sophistication between humans and machines.

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Organizations today are spending money on the latest technologies and working hard to solve problems as they arise. Yet, sad to say, this is simply not enough.

Today, to get on top of today’s fiercely competitive business environment, organizations need to take a strategic move: Develop an Innovation Mindset. What is an Innovation Mindset? What does it take to develop an Innovation Mindset? Often, this can be mindboggling as we get confused as to understanding what is an Innovation Mindset. Developing an Innovation Mindset is never the mere act or intent of investing in technology. It goes beyond spending money on the latest technology.

Developing an Innovation Mindset is to undergo the transformation from an innovation-averse to a forward-thinking organization.

Understanding an Innovation Mindset: What It Takes to Develop One

Developing an Innovation Mindset requires scaling innovations repeatedly and making it grow as fast as others. Companies need to depart from adopting technologies as point solutions to evolving future systems. This can be achieved by cultivating the mindset and methods of the top 10%.

The top 10% are the Leaders in Innovation Management that are already enjoying a considerable head start and are not standing still. The systems they have put in place are specifically designed to not only accommodate innovations but also scale them across the enterprise.

Developing an Innovation Mindset Starts with the Right Tools

To foster than Innovation Mindset, we need to put in place 5 key principles.

These 5 principles can provide organizations the foundation on developing Innovation Mindsets.  There first 2 are defined as:

  1. Adopt technologies that make the organization fast and flexible. Consumers now demand that companies are fast and flexible. The market is getting impatient when there are delays and so structured that it ceases to be an organization with a Customer-centric Design. Principle 1 focuses on making organizations fast and flexible. Achieving this call for efficient use of decoupling data, infrastructure, and applications to achieve greater flexibility and a faster-moving IT culture.
  1. Get grounded in cloud computing. This principle is focused on catalyzing innovation. Adopting this principle will enable organizations to maximize the use of the cloud to successfully utilize other technologies, including Artificial Intelligence and analytics.

There are 3 other principles that organizations must take notice of and focus on. The other 3 principles are recognizing data as being both an asset and a liability, managing technology investments well across the enterprise, and finding creative ways to nurture talent.
Integrating these principles in the organization’s journey towards Digital Transformation will promote the development of an Innovation Mindset. When this happens, we can expect our organization to keep up with the pace and catch up.

What Does It Take to Have an Innovation Mindset

Developing an Innovation Mindset has led leaders to take command and be in-charge of market demands. Leaders are adopting DevOps, automation, and continuous integration/continuous deployment at a faster rate than Laggards. Let us take a look at a Travel Industry disruptor. The company migrated its platform to microservice as part of decoupling initiatives.

As a result of taking this initiative, rapid response to change was achieved. This also enhanced its capability to add new features as the company experiences explosive growth.

Let us take a look at a more internationally recognized company: Ant Financial (formerly known as Alipay), the Alibaba Group’s financial arm. The organization embedded cloud services and AI across multiple processes and product lines. Furthermore, AI capabilities were offered to external ecosystem partners.

Today, Ant Financial can instantly assess the credit risks of underserved people who may not have bank accounts and even target them with loan offers. The overall cost was reduced by 50% and the company experienced a 10-fold increase in daily visitors.

Developing an Innovation Mindset is key.

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Today’s C-suite is making a significant investment in new technologies.  Yet, it is failing to achieve full value. Technologies are being deployed in pockets or silos pic 1 Innovation Leadership Mindsetwithout a Strategy for scaling the Innovation from these technologies across the enterprise. Unable to scale their Innovation, organizations are not realizing the full benefits of their technology investments.

An Innovation Achievement Gap exists. What is the Innovation Achievement Gap? This is the difference between potential and realized value from technology investments. When new technology does not achieve its full value, the Innovation Achievement Gap exists.

What Companies are Facing Today

The enormous challenge of Innovation Management with legacy systems is facing companies today.  The conventional IT stack is not built or designed for the world of tomorrow. These are our software applications, data, hardware, telecommunications, facilities, and data centers.  Today’s cloud-oriented world is full of analytics.  There are sensors, mobile computing, AI, the Internet of Things (IoT), and billions of devices. Digital Transformation is changing the face ob business.

True, companies have started in the cloud. But the systems have not been adopted at the pace of technological change.  As a result, there are distinct Leaders and Laggards when it comes to the adoption and penetration of technologies. Leaders are seeing more than 2X the revenue growth of Laggards. Laggards, on the other hand, often adopt technologies as individual point solutions without a strategy for enabling systems than can achieve enterprise-wide, game-changing innovation. While they might have pockets of brilliance, Laggards cannot maximize the value achieved. To be a Leader is to have an Innovation Leadership Mindset.

Simply said, adopting technologies does not guarantee success. This requires a systematic and sequential strategy in line with Next-gen Enterprise Systems. This needs an Innovation Leadership Mindset.

Doing Things Differently: The Innovation Leadership Mindset

Leaders differ much from Laggards. Embedded within their whole being is the Innovation Leadership Mindset.

Having an Innovation Leadership Mindset is clicking the future into place. There are 4 core pillars of the Innovation Leadership Mindset.  Let’s define the first 2:

  1. Invest in innovation. Leaders invest more in innovation. Organizations with Innovation Leadership Mindset direct a greater percentage of its IT budget toward innovation.  They accelerate investment innovation over the next 5 years. Leaders are far advanced from Laggards when it comes to investing in innovations. Leaders invest 93% on innovation and are expected to increase this to 97% in the next 5 years. On the other hand, laggards invest only 64% on innovation with a planned investment of 74% in the next 5 years.
  1. Develop Innovation Systems. Leaders show a consistently higher rate of technology adoption.  Organizations with Innovation Leadership Mindset adopt new technologies earlier and develop higher levels of expertise. They prioritize and sequence implementation in optimal ways. Leaders have been found to adopt a fundamental general-purpose technology at a rate of 98%. An example of this is Artificial Intelligence. Laggards, on the other hand, have faith in a fast follower approach. They take technology haphazardly leading to patchwork across the organization.

There are 2 other core pillars that are equally important. One is Scale Technology Innovation and the other is Evolve Next-gen Enterprise Systems.  Leaders that set their sights on innovating at scale target 3 times more business processes with technologies. Leaders have also drummed up their resources towards building the Next-gen Enterprise Systems.

Next-gen Enterprise Systems are systems that are capable of repeatable and scalable innovations. It is Boundaryless, Adaptable, and Radically Human. Outpacing others calls for organizations to start envisioning their own version of Boundaryless, Adaptable, and Radically Human Next-gen Enterprise Systems.

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Richard Branson, British business and philanthropist once said: “One day, offices will be a thing of the past.”pic 1 Virtual Teams Challenges & Benefits

While organizations still need to travel to reach their physical offices, the rapid changes in the world are requiring business

Virtual Teams work well for an organization and is effective even from a communication perspective. In fact, it is known to complement well the Lean Management approach used by organizations. Studies from previous years have shown that well-managed, widely spread, Virtual Teams have been outperforming those that share office space. In fact, it has shown that using Virtual Teams can improve employee productivity by 45%.es to form Virtual Teams. A Virtual Team refers to a group of individuals who work together from different geographic locations and rely on communication technology such as email, voice conferencing services, fax, etc.

In today’s highly competitive global economy, to be able to work smarter, organizations must be able to leverage the manifold benefits of a remote workforce. Likewise, organizations must also be able to manage challenges that come with working with Virtual Teams.

The 4 Core Challenges of Going Virtual

More organizations are opting to work with virtual teams. Virtual teams may have their benefits but it also has its challenges. Being able to manage these challenges will enable organizations to seize the benefits of remote workers.


There are 4 core challenges that organizations face when working with Virtual Teams. Let us take a look at the 2 core challenges.

  1. Virtual Communication. Having different time zones can be a challenge. This can lead to layers of complexity to the logistics of everyday communication. When time zones do not match, it can lead to less and less information being transmitted and can cause miscommunication. When working in a different time zone, there is a tendency to exchange information using email or instant messaging. But these may not be enough as it cannot convey as much meaning compared to vocal tone, facial expression, and physical gestures.
  1. Virtual Project Management. When working with virtual teams, the business must have a proper system and people in place. Virtual Project Management may cause some confusion and even delays. While digital tools are in place to facilitate remote project management and collaboration, it can be difficult at times to tell what each person is contributing. In fact, organizations need to put up a system to track whether the members of the virtual team are doing their required tasks.

In this digital era, Virtual Teams are becoming the new face of business operation and aligning itself with Digital Transformation. This is a global reality that businesses must accept. However, working with Virtual Teams brings a lot of challenges not only in Project Management and Virtual Communication but also in Talent Development and Technology Support. Talent Development and Technology Support are two other core challenges that can make an impact on the Virtual Team. How it is managed will define the success of your Virtual Team.

In hindsight, Virtual Teams can also bring so many benefits. Hence, it is not surprising that despite the challenges, a lot of businesses still prefer to work with Virtual Teams.

One core benefit is increased access to top talent. The world has become a global market for expertise and talents. Businesses can extend their reach to other countries in their search for needed expertise. In fact, working with virtual teams will open opportunities for businesses to work with experts in various fields with various experiences. Being able to employ the best and the brightest is more than enough for businesses to continue working with Virtual Teams and conquering challenges. Businesses just need to have appropriate support programs to give Virtual Teams a home-field advantage.

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The global economy is currently producing nearly 300 million tons of plastic every year, Half of these is for single use. With the population CSR Circular Economy pic2agrowing at a fast rate, we are requiring more resources than ever before. Yet, our finite resources are diminishing

Our economy has been built on the concept of a Linear Economy. This is Extract, Manufacture, Distribute, Use, and Dispose of. However, over the past few decades, we have transitioned to a disposable society as we generate waste at an unmanageable rate.

Today’s Business Transformation calls for a shift to a Reuse Economy or the Circular Economy.  Moving towards a more Circular Economic activity could deliver benefits such as reducing pressure on the environment, improving the security of the supply of raw materials, increasing competitiveness, stimulating innovation, and others. Moving into a Circular Economy also means that companies are considering sustainable approaches to balance out opportunities for business and the preservation of the environment.

The Shift to a Circular Economy

The Circular Economy is an economic system aimed at eliminating waste and the continual use of resources. It employs recycling, reuse, remanufacturing, and refurbishing to create a close system. With Circular Economy, it minimizes the use of resource input and the creation of waste.

A Circular Economy has a great impact on sustainability. It maximizes the conservation of resources and the reduction of environmental pollution.

In a Circular Economy, industries can increase profitability while reducing dependence on natural resources.

Discovering the 6 Core Activities of a Circular Economy

The 6 Core Activities of a Circular Economy are stepping stones towards increasing productivity, cost savings, and generating greater economic benefits.

A Purview of Circular Economy in Action

Taking the 6-step journey to achieve greater sustainability can lead organizations to draw on the power of the Circular Economy to achieve greater value. Let us take a purview of a Circular Economy in action: The Waste Management Case Study

The Waste Management Case evolves in a scenario where the economic growth in emerging markets has raised living standards resulting in massive waste. As such, municipalities in these markets are spending up to half of the budget on solid waste management.

As a result of economic growth, there is massive consumer and industrial waste generated. In fact, metals extracted from tires in open backyard fires can cause great harm to human health and the environment.

We are in this dilemma right now. With the application of the Circular Economy, we can better address these problems by creating infrastructures to organize and manage waste supply chains. This can include digital transformation.

What is the underlying Circular Economy Principle? It is AGGREGATION. With this principle, we can aggregate volumes substantial enough to justify the business investment. We can enable companies to build the business from waste.

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“The only thing that is constant is Change.” – Heraclituspic1 Leavitt's Diamond

An epidemic of change is happening globally–reengineering, restructuring, and revamping! Workplaces seem to be launching one change initiative after another.  Digital Transformation is happening everywhere. Yet, the hard truth is that many change initiatives fail.

Change Management initiatives fail because of the way organizations view change. Often, change is seen as an isolated process. Organizations tend to focus on only one part of the organization in isolation. This can be a fatal error.

Everything in an organization is connected, and changing one piece can impact another. Hence change can only be successful if all interconnected pieces are considered. In 1965, Harold J. Leavitt designed an integrated approach to change, the Leavitt’s Diamond.

What is Leavitt’s Diamond?

Leavitt’s Diamond is a framework for understanding the connection between the key factors in an organization, and building an integrated change strategy. This is an essential element in Strategy Development.

The Structure, Tasks, People, and Technology are the 4 essential components of the Leavitt’s Diamond.

pic 2 Leavitt's Diamond

  1. Structure – The Structure refers to the organization’s hierarchical buildup and the layout of the various departments. However, this is not limited to its hierarchical buildup. It can also refer to the mutual relations that exist between departments and employees, the coordination between various levels of management, and the communication patterns.
  1. Tasks – The Tasks refers to the functions individual employees are assigned within their jobs. This relates closely to the organization’s goals on the strategic, tactical, and operational levels.
  1.  People – These are your people – your staff, your employees. Beyond its physical countdown, this component also refers to all skills, competence, knowledge, and efficiency that employees bring to the organization.
  1. Technology – Technology refers to the upgraded machines and devices, as well as systems and software applications that build up the performance of tasks within an organization.

Between these 4 components, there must be the right balance. Only then can change be successfully implemented.

From the Drawing Board to the Ground Running

Having a good understanding of the Leavitt’s Diamond is important for organizations. However, the most critical is having it on the ground running. Each of the components must be identified, defined, and determined–your main tasks, your people, your tasks, and structure.

This is critical because you are building a basic framework for starting the change model. Without the right balance of Structure, People, Tasks, and Technology, the Business Transformation necessary will never occur.

Organizations must also take note that a primary change will always have an impact on each of the 4 components. A change in one component comes with changes in other components of the Leavitt’s Diamond. When this happens, there is a need for necessary adjustments.

Taking The Impact of Change on Tasks As an Example

  • Change in People Component: Training or specific hiring policy can change staff and employees’ knowledge and expertise.
    • What is the impact on Tasks? There is a change in individual tasks within the employees’ job.
  • Change in Structure Component: Restructuring of departments, change in the arrangement of job positions, or even reorganization.
    • What is the impact on Tasks? A different way of working is expected from employees to include different ad/or additional tasks.

This is also expected when there is a change in Technology and a corresponding impact on Tasks. Organizations must need to take note that changes in any component must be aligned with changes in other components. Again, there must be a balance for Leavitt’s Diamond Change Model to succeed.

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Companies often know where they want to go when it comes to Strategy Development. Companies want to be more agile, quicker to react, and pic 1 Next-gen Operating Modelmore effective. They want to deliver great customer experience, take advantage of new technologies to cut costs, improve quality and transparency, and build value.

Yet, while most companies are trying to get better, the results tend to fall short. One-off initiatives in separate units do not deliver big enterprise-wide impact. Improvement methods that were adopted almost invariably yield disappointing results.

Senior leaders have a crucial role to take in making things happen. Business Transformation cannot be a siloed effort. A Next-generation Operating Model is essential to break through organizational inertia and trigger step-change improvements.

Understanding the Next-gen Operating Model

Companies need to commit to a Next-gen Operating Model if they want to build value and provide compelling customer experiences at a lower cost.

pic 2 Next-gen Operating Model

  1. Integrated, Organization-wide Operational Improvement Program. This approach is focused on Customer Journeys and distinctive customer experience. The Integrated, Organization-wide Operational Improvement Program is a holistic approach towards how operations can contribute to delivering distinctive customer experience. It cuts across organizational siloes in both customer-facing and end-to-end processes. This approach is a preferred organizing principle. Having multiple independent initiatives within separate organizational groups can deliver incremental gains. However, the overall impact can be underwhelming.
  1. Holistic Customer Journey. This is an approach that makes use of multiple capabilities instead of individual capabilities to achieve greater impact.

The holistic Customer Journey is achieved when the 5 core capabilities are utilized.

Discovering the 5 Core Capabilities

There are 5 core capabilities essential in unlocking the most value in the shortest possible time. Two of the 5 capabilities are Digitization and Advanced Analytics.

Digitization is the process of using tools and technology to improve journeys. It has the capacity to transform customer-facing journeys by creating the potential for self-service. It has the power to reshape time-consuming transactional and manual tasks that are part of internal journeys more so when multiple systems are involved.

Another core capability worth knowing is Advanced Analytics. This is the autonomous processing of data using sophisticated tools to discover insights and make recommendations. It provides intelligence to improve decision making and enhance journeys when nonlinear thinking is required. This is very useful in claims triage, fraud management, and pricing.

There are 3 other core capabilities that are essentially important in these days of Digital Transformation. These are Intelligent Process Automation, Business Process Outsourcing, and Lean Process Design.

Intelligent Process Automation is an emerging set of new technologies that combine fundamental process redesign with process automation and machine learning. It can replace human effort in processes that involve aggregating data from multiple systems taking a piece of information from a written document and entering it as standardized data input.

Business Process Outsourcing works best for processes that are manual. It uses resources outside the main business to complete specific tasks or functions. Back-office processing of documents and correspondence is an example of BPO.

The Lean process Design is one capability that helps companies streamline processes, eliminate waste, and foster a culture of Continuous Improvement. It is considered a versatile methodology as it can be applied in multiple processes.

Organizations can use these capabilities to achieve the greatest impact. The maximum effect, however, can be achieved when specific implementation guiding principles are followed.

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Lean Management plays a significant role in putting in place processes, capabilities, and tools to improve how businesses operate. But, the pic 1 Digital TransformationDigital Age has increased both the opportunities for businesses who know how to react and the difficulty of getting it right.

Tasks performed by humans are now more complex be it accessing information in multiple formats from multiple sources or responding to changing market and customer dynamics at an ever-increasing speed. As an increasing number of tasks become automated or taken over by cognitive-intelligence capabilities, companies need to learn from lean management. Like a sprinter who needs all her muscles to be finely tuned and working in concert to reach top speeds, fast-moving institutions must have a system to continually synchronize strategies, activities, performance, and health.

Many organizations understand the need to change how they work and have embarked on numerous initiatives, yet few have been able to get beyond isolated success cases or marginal benefits. Most companies recognize the need for a Next-gen Operating Model to drive their business forward their Digital Transformation initiatives. But, how they develop it makes a big difference.

The Next-gen Operating Model

There are 4 core pillars of a Next-gen Operating Model. Putting these in place will ensure its successful implementation.

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  1. Autonomous, Cross-functional Teams. The first pillar is focused on empowering the team to own products, services, or journeys. Having autonomous, cross-functional teams, organizations can become nimble in building skills across their teams. They make anchor hires for key roles, set up rotational and train the trainer programs, and commit to ongoing capability building and training for key roles.
  1. Flexible, Modular Platform. The second pillar is focused o supporting a faster deployment of products and services. Having Flexible, Modular Platforms will enable technology teams to better collaborate with business leaders in assessing which systems need to move faster.
  1. Connected Management System. The third pillar focuses on driving a culture of continuous improvement that cemented on customer needs. A Connected Management System will ensure that Management systems are evolving to create feedback mechanisms with and between various operations and teams.
  1. Agile, Customer-centric Culture. The fourth pillar is focused on speed and execution over perfection. Having an Agile, Customer-centric Culture is critical to success. It leads the change from the top and builds new ways of working across organizational boundaries. When functions and teams collaborate, effective time to market to reduced as well as operational risk.

The path to building up the Next-gen Operating Model follows well-defined approaches to guide organizations. These approaches will be every organization’s guide to operating model transformation during the first 12 months.

Following the 4 Critical Approaches to Operating Model Transformation

The 4 critical Approaches to Operating Model Transformation works well when there is a broad and top-down organizational mandate for change. Before anything else, organizations must make sure that the change mandate is in place so that the entire organization is aligned with the proposed change.

One of the 4 Critical Approaches is the Innovation Lab. The Innovation Lab is a dedicated unit set up to be entirely separate from the historical culture, decision-making bureaucracy, and technical infrastructure of the main business. It hatches new business models in an informal setting. It is best used when there is a need to move very quickly in response to market pressures.

Mastering these various approaches will enable organizations to better go through the Operating Model Transformation in the most effective way to achieve Operational Excellence.

Interested in gaining more understanding of Operating Model Transformation? You can learn more and download an editable PowerPoint about Digital Transformation: Operating Model Transformation here on the Flevy documents marketplace.

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