"We didn't do anything wrong but somehow we lost" - Stephen Elop (former Nokia CEO)
We are in the early throes of a Great Restructuring. Our technologies are racing ahead, but our skills and organizations are lagging behind.
Due to the effects of digitization, the complexity of markets, regulations and dependencies is continuously increasing. New competitors and start-ups are pushing into markets that were believed to be stable.
Our world is changing, change is the new normal. Recurring, fully describable tasks will be automated, even in areas where we did not think this was possible just a short time ago. What remains are the exceptions, the situations that only humans can judge correctly. This is not a case for lone warriors, but for decentralised decision-making groups, very close to the local context.
In the future more and more tasks will be taken over by knowledge workers of machines. As a consequence, humans will have to take over more and more complex situations and exceptions. In order to understand and correctly evaluate these, cooperation in teams, across departmental and organizational boundaries is becoming increasingly important. Our linear approach, trained for efficiency, stands in its way.
The quality and speed of corporate decisions is continuously decreasing
The value of a company is ultimately determined by the sum of the decisions it makes and how it puts them into action. Its assets, capabilities and structures are useless if executives and managers are not able to make the essential decisions more often right than wrong. This ratio deteriorates dramatically with increasing size and usually also with increasing age of organizations. What are the reasons for this?
Organizational structures from the past
In order to deliver scalable solutions, companies of increasing size need to deal with a growing number of processes. This is a great approach for a world where both the problem and the solution are known. Processes reduce the risk to an entire organization, but each layer of processes reduces the ability to be flexible and adaptable and, increasingly importantly, to respond to new opportunities and threats.
Effects of digitization
Neither an algorithm nor a person alone can master the challenges of the dawning exponential age. Emotional intelligence and the ability to look beyond silo boundaries are required.
Because complex problems almost always have to be solved across domains, too many people are often involved for too long. With each additional perspective, however, the effort increases exponentially. Managers therefore spend more and more time in coordination and more and more often without any result.
As a consequence, essential decisions take longer and longer, or are ultimately made simply on gut feeling - and only occasionally in consideration of the corporate strategy. The number of wrong decisions is increasing.
This leads companies to act even more conservatively and make decisions at even lower speeds.
Most companies try to approach the problem as if it were a pure software problem. They invest massively in new technologies - and thus miss the core of the problem. Modern and better technology alone cannot turn the future of established companies from black back to rosy.
We can no longer continue the way we have been going.
In order to solve the challenges of the 21st century in a sustainable manner, we need a completely new, holistic approach. beeBlum.