Digital transformation for chiefs and owners. Volume 2. Systems thinking. Dzhimsher Chelidze
and turnover. Instead of one or two universal «working horses» there will be a distribution of tasks, the uncertainty that causes stress and burnout will be reduced;
– unload yourself as a leader: you do not have to often interfere with processes and understand conflicts, as the system will become transparent, everyone will understand their area of responsibility. It’ll be easier to pick up people and prepare job descriptions.
In addition, in the early stages, including the start of digitalization, your business processes will change too often, and constantly change and update them – too expensive a pleasure. Additionally, if you describe and «freeze», you lose the main advantage of the young team – its flexibility. The exception is critical processes with high risks and back-office processes, they are often stable and better dealt with initially.
However, after the initial stage is completed, it is necessary to engage in business processes. It is not necessary to fix everything and detail, but the most critical processes, where the risks are high, where problems begin to occur, should be described at least at the upper levels. Top-level approaches have the main advantage – speed and simplicity. And this will have an effect, and therefore, resources and motivation for in-depth work.
For grown-up companies there is another problem – bureaucracy. There is already a reverse approach – simplification of business processes. In general, as always, the search for a balance between chaos and entrepreneurship and order with bureaucracy.
As I said earlier, the right org is important. structure, proper distribution of authority, resources, responsibility and people, taking into account their psychology, system and personality balance. Additionally, if you listen to the classic science of Peter Drucker’s administration, you have to initially describe who you need, and then you have to choose the person for these tasks. This is the key message of his work «Effective Leader». But I have a slightly different opinion here.
This approach in a pure form is viable in an already mature company, where the requirements for candidacy are grounded, and the structure is balanced. In addition, such a company is attractive in the market due to the decent payment and the established reputation. If you are still young, you do not have a balanced system and/or you do not have a queue of applicants, then a certain flexibility is required. Yes, it is better to base on the principle of Peter Drucker, but the organizational structure needs to be adapted to the available resources and people, their psychological qualities, soft skills and competencies. That is, as usual, remember how to, but seek balance with what is.
This is basically the basic rule of life, and there is no ideal solution or methodology for either organizational structures, business processes, or project management approaches and so on. It is impossible to get rid of the psychology of people and technologies or tools to solve all problems, but to strive for an effective and autonomous system is necessary.
If you decide to approach the search for a new employee systematically: describe the functionality, requirements, its KPI, what characteristics should have, it does not mean that you will find the ideal, but it means that you are likely to find someone who will be useful to the company, will be suitable for its culture, although in some details will differ from the image of the ideal candidate.
How to build a suitable organizational structure? And how often to revise it?
I recommend the following algorithm:
– Define the goals of the company, its strategy: rapid growth, smooth, holding positions, scaling to new markets. It also determines which areas of the organization to focus on.
– Evaluate a company: what industry and its potential, what product, what technology lies at the core, and how often will have to implement projects, what markets.
– Assess available technologies and resources, including digital ones.
– Choose a structure and describe for each unit and position 4—6 key functions, target product, required competencies (professional, personal) and, where possible, available resources.
– Describe the main business processes, starting with the VAD-approach. Here you need to see the main stages of product creation, understand which of the participants in the process creates value and what.
– Assess: Do all these people and units create value? Where are the losses? What can be abandoned with digital technology or outsourced? If you only build a company, it will provide minimal costs, and if you transform, you will release resources to priorities.
Another recommendation: When goals are achieved or after the introduction and mastery of new technologies, revise your organization. structure. Or make it a rule every 6 to 12 months.
With regard to business processes, I can make the following recommendations:
– initially make a VAD-scheme throughout the company;
– prepare a process registry (first, second and third level processes, process owner, process participants);
– then take advantage of product management and system restriction theory to select priority business processes;
– it is also important to describe those business processes that are stable and are the best practice for others. Or, conversely, useful description of problematic business processes;
– does not need to describe every business process, only those tasks that are either standard or carry risks for business;
– begin to describe processes with approaches that you understand and who will use them;
– describe business processes so that they fit on one sheet A4 if you want to start the process, and in the notation BPMN if you want to analyse and optimize the process. Additionally, only after optimization do IDEF to deal with automation;
– describe the processes and prepare instructions or memos as if all the employees will leave tomorrow, and the replacement will come fools or 8-year-old children.
At the beginning of the book, I said that digital transformation should be your strategic goal, and therefore, this role should have a place in the organizational structure. Simply put, someone has to be responsible.
In general, I believe it is necessary to proceed from:
– your scale and availability of resources;
– the current level of digitalization and readiness;
– the limitations of the system (which will be discussed in the next chapter), global goals (to overcome the crisis, to ensure growth conditions, active growth) and objectives (to restore order, create new products, improve product supply).
There are many variations, and therefore, and possible structures. That is, to begin with, you need to pass a diagnosis. It is as with health: before treatment, it is better to undergo an examination and make a diagnosis, from which there will be a plan of treatment or recovery. But given that digitalization and digital transformation are strategic tasks, and the price of error may be too high, it should always be its driver.
If you are an entrepreneur or owner of a small business, it is better to find an experienced mentor who will help you to manage this direction, giving to outsource only some tasks on automation and software implementation. You can also find a team from the outside that deals with digitalization and turn-key digital transformation, with all the skills and necessary experience. The second option suits medium-sized businesses. But in any case, you have to understand automation, digitalization and digital transformation at least on a basic level.
If your business has grown from small to medium, in connection with which there are signs of chaos and lack of work with data, then you need to restore order and eliminate losses (in the chapter on thrifty production talk about this concept), remove internal restrictions, CDO 1.0 and 2.0 in data management. To do this, it is better to give the role of the leader of digitization to the operating director.
If the problem is a weak food