Digital Business is Just Business.
At some point during the pandemic, it seems that collectively many organizations came to terms with digital transformation, to move beyond the hype and just get down to work. I think we’ve also reached the point where digital business is now just regular business, where digital is no longer something separate, but just part of how an organization delivers value, strategizes, and operates. Separate strategies or departments for “digital” are seeming more and more illogical. Of course it is important to acknowledge though that the digital reality and maturity does vary for organizations across a wide spectrum, and may be especially higher or lower in certain industries or regions of the world.
I am inspired by the Digital Transformation Manifesto from The Institute[i] and all the people who have crafted and signed on to it, especially because its eight tenets define for us a vision for the organization of the future and how it should behave. Not one of the tenets are about technology directly, but rather they are “a collective of beliefs and guiding principles for an environment that can drive and sustain a transformative organization, supported by technology.”[ii]
As we strive to become these organizations of the future, we can draw new inspiration and ideas from nature.
Change is at the Heart of a Digital Enterprise.
One of the hallmarks of a digital enterprise is agility. Every organization of today and tomorrow needs to build the muscle for continual change, agility, and resilience. In fact, we see themes of agility in two of the Digital Manifesto tenets: “We proactively embrace change” and “We have the agility to pivot quickly.” Other tenets also support agility, such as “We create purpose-based value,” since every organization needs to have a north star to rally action, and “Our culture is one that empowers individual leadership,” since being a nimble organization that can quickly pivot requires that people at all levels are empowered to make appropriate decisions.[iii]
Resilience is “the capacity of a system, be it an individual, a forest, a city or an economy, to deal with change and continue to develop.”[iv] Agility is “the capacity for moving quickly, flexibly, and decisively in initiating, and taking advantage of opportunities and avoiding any negative consequences of change.”[v] In the business world, both of these concepts means that organizations needs to continue to operate, evolve, and move forward relentlessly to embrace change as an opportunity.
We Can Learn a Lot About Agility and Resilience from Nature.
I am a biologist, by training and in heart, so I always look to one of our greatest teachers: nature. I think it is a particularly good example in this case because nature has one important goal: to keep its operations running, so that life can continue indefinitely. To do so, agility and resilience are not optional. Nature is resilient and continually changing and innovating in ways that are beyond our full comprehension.
While it only scratches the surface, here are four ways that nature achieves agility and resilience, along with how they can apply to organizations.
Create Closed Loop Systems. The idea of a closed loop system is that there is no concept of waste. In nature, everything can be used and becomes “food” for something else. Basically, waste = food. For example, in a forest, plants and trees use energy from an unlimited energy source (the sun), and they use nutrients and water from the soil. They also consume carbon dioxide and release oxygen. Animals eat those plants, consume oxygen, and release carbon dioxide for the plants. When the plants and animals die, they decompose into nutrients that return to the soil and it all begins again.
What It Means for Organizations: A natural and closed loop system is a good way to ensure the reliability of an organizations’ supply chains, which have become increasingly fragile with global shockwaves such as the pandemic and political unrest. The opportunity for organizations then is to shift their model from linear to circular. Our current model in business is generally linear, where we take, then make, then waste. For example, we cut down trees, turn them into wood pulp, make paper, use paper, and then much of it may end up in a landfill. An excellent example of applying this closed loop concept to business, is industrial ecology or industrial symbiosis. This is where organizations in a business ecosystem work together and the outputs of one organization become the inputs of another. The industrial ecosystem in Kalundborg, Denmark is one such example where multiple public and private organizations work together and exchange 25 different resource streams.[vi]
Build in Diversity and Redundancy. Nature intentionally creates diversity and redundancy. In fact, uniformity would be a risk to the goal of continuing life. For example, the immune system is a powerhouse of adaptability and resilience. The human immune system creates redundancy by having millions of copies of leukocytes (white blood cells) ready before they are needed. This creates a massive buffer against the unexpected. It also creates diversity by having not just leukocytes but many different types of cells. This diversity can deal with a wide range of invaders to the body that it hasn’t even encountered before.
What It Means for Organizations: The opportunity for organizations is to shift from a narrow focus on efficiency to focusing on effectiveness and having some slack in the system. While this might seem contrary to typical efficiency efforts, having some slack in the system is not just valuable to prepare for the unexpected, but also for other business benefits such as giving employees time to serve customers in unexpected ways. For example, during the pandemic, 3M used its surge capacity and localized supply chains to increase the production of masks needed.[vii]
Learn and Adapt. Nature adjusts to the environment to improve chance of survival. Organisms can adapt to their environments biologically or structurally, meaning they alter their body functions. For example, people who live at high altitudes can function with lower levels of oxygen. Organisms can also adapt behaviorally, such as penguins that crowd together to share warmth.
What It Means for Organizations: The opportunity for organizations is to shift from attempting to control predictability to leveraging the unexpected. This means not just adapting to survive, but to thrive by leveraging challenges to create new opportunities. A simple example is a fine-dining restaurant that reimagined their business model during the pandemic and began offering bagels, drive-thru burgers and a family meal delivery service.[viii]
Adopt Principles of Self-Management. Self-organization is “spontaneous creation of a globally coherent pattern out of local interactions.”[ix] In our human world, we often create things which are complicated, with many small parts, all different with their own precise role in a machine or system. However, nature is not complicated. Nature is complex, which means that its systems are made of many similar parts and their interaction produces coherent behavior where the whole is greater than the sum of the parts. For example, a school of fish or a formation of birds flying adapt this behavior to avoid predators and create efficiency. There are no “leaders,” but rather each organism follows a set of simple rules which produces emergent properties that can’t be predicted from the individual rules. The result is greater than the sum of its parts.
What It Means for Organizations: Applying principles of self-management leads to resilience by creating a redundant, distributed organization, so in the case of the unexpected, one part of the organization can make up for another. The opportunity for organizations is to shift from complicated to complex – and from focusing on parts to focusing on the entire system. This is important for resilience because when products, machines, organizations, or systems are complicated, they are more likely to fail when something unexpected occurs. There are examples of organizations which are adopting principles of self-management, wholeness, and an evolutionary purpose, as described in The Future of Management is Teal[x]. Self-management does not mean that all decisions are made by consensus but is about a whole set of interlocking structures and practices, so that decision rights and power flow to any individual who has the expertise, interest, or willingness to step in to oversee a situation.
Summary
Digital business is quickly becoming synonymous with business, and the tenets of the Digital Transformation Manifesto provide an important guide to help us envision the organizations of the future. At the heart of all digital enterprises is the ability for continual change, agility, and resilience. As we evolve towards those futures, we can take inspiration and ideas from nature, which is a particularly good teacher of agility and resilience. Organizations can improve their ability to manage change by considering a few key concepts from nature: closed-loop systems, diversity and redundancy, learning and adaptation, and principles of self-management. The opportunity – and necessity – for organizations now and in the future, is to embrace change as a positive influence and move forward with relentless evolution and innovation.
[i] “Digital Transformation Manifesto,” Institute for Digital Transformation, https://www.institutefordigitaltransformation.org/digital-transformation-manifesto/
[ii] Ibid.
[iii] Ibid.
[iv] “What is Resilience?,” Stockholm Resilience Centre, https://www.stockholmresilience.org/research/research-news/2015-02-19-what-is-resilience.html
[v] “The Difference Between Agility and Resilience, and Why These Concepts are important in Mastering Turbulence,” The Conference Board, 17 December 2012, https://www.conference-board.org/blog/postdetail.cfm?post=1342
[vi] Kalundborg Symbiosis website, http://www.symbiosis.dk/en/
[vii] “How 3M Plans to Make More Than a Billion Masks By End of Year,” Bloomberg, 25 March 2020, https://www.bloomberg.com/news/features/2020-03-25/3m-doubled-production-of-n95-face-masks-to-fight-coronavirus
[viii] “This Seattle Restaurant is Redesigning its Entire Business Model In Response to Coronavirus,” Fast Company, 16 March 2020, https://www.fastcompany.com/90477161/this-seattle-restaurant-is-redesigning-its-entire-business-model-in-response-to-coronavirus
[ix] Heylighen, Francis, “The Science of Self Organization and Adaptivity,” Knowledge Management, Organizational Intelligence and Learning, and Complexity, in The Encyclopedia of Life Support Systems (EOLSS), EOLSS Publishers, Oxford, 2001, http://www.eolss.net
[x] Laloux, Frederic, “The Future of Management is Teal,” Strategy+Business, 6 July 2015, https://www.strategy-business.com/article/00344
Whynde Kuehn is the Founder and Managing Director of S2E Transformation, helping organizations bridge the gap between strategy and execution, and achieve their greatest visions for business transformation in a practical and business-focused way. Whynde has extensive experience in enterprise transformation and planning and was a key player in architecting one of the largest digital business transformations in the world. She also led one of the largest business transformation and architecture consulting practices prior to starting S2E.
Whynde is a passionate advocate for using business architecture to enable effective strategy execution and digital transformation. She is a long-time business architecture practitioner, educator, author, recognized industry thought leader, and community builder, with extensive experience applying the discipline at leading Fortune 500 enterprises and a range of entrepreneurs, nonprofits and social initiatives. She is the Founder of Biz Arch Mastery, a dedicated online platform offering coaching and resources to simplify business architecture and facilitate its practical usage. She is also a Partner at Business Architecture Associates, Senior Consultant for Cutter Consortium, and a Co-Founder of the Business Architecture Guild.
A reminder that all too often, we make things more difficult than they need to be, by adopting a forced, unnatural approach