The design of effective public digital organizations 💪

The design of effective public digital organizations 💪

Society needs effective public organizations, and no organization can be called effective unless it can also be called digitally effective. In today's digital age, it is essential for public organizations to embrace technology and leverage it to better serve their constituents. Transparency is also crucial, as public works should be equally, if not more, accountable for their performance than private organizations.

Successful digital products are almost always built by long-lived multi-disciplinary teams that have broad power to shape their own work. These empowered product teams are responsible for translating organizational strategy into actionable plans that multiple product teams can efficiently execute on. An executive team designed consciously to support empowered product teams is more likely to be successful than one that is designed around other goals.

In the private sector, companies like Amazon have set the bar for effective digital organizations. Amazon's success can be attributed to its focus on optimizing its selection, pricing, and inventory of products. Founder Jeff Bezos understood the importance of thinking small and focusing on the customer. He designed an algorithm that prioritized offering a wide assortment of good quality merchandise at the lowest possible prices, backed by guaranteed satisfaction and friendly service.

However, Amazon didn't stop at just optimizing its physical stores. The advent of the internet provided an opportunity for the company to explore infinite shelf space. Amazon's unbound search for the optimal selection of SKUs led to the creation of Amazon Marketplace, where third-party sellers could offer their products on the platform. This not only allowed Amazon to rapidly expand its catalog but also solved the problem of negotiating pricing with a growing SKU base.

In a similar move, Amazon recognized the bottleneck of computing power and data storage. To overcome this constraint, Amazon Web Services (AWS) was born. AWS not only solved Amazon's infrastructure challenges but also opened up its technology services to external developers, turning it into a platform.

Platforms became Amazon's answer to every growth obstacle it encountered. Amazon Advertising enabled sellers to feature sponsored products at the top of search results, providing a solution to the problem of product discovery. However, this also created a new challenge as sponsored listings favored high-margin products pushed by savvy digital marketers, potentially leading to a suboptimal customer experience.

Despite its success, Amazon is not immune to missteps. As it continues to accumulate marketplace sellers, there is a risk of losing focus on being the most customer-centric company. The sheer size of Amazon may also lead to the need for self-disassembly along its own preferred lines rather than being forcibly disassembled by regulators.

To design effective public digital organizations, there are valuable lessons to be learned from successful private companies like Amazon. Here are three actionable pieces of advice:

1. Empower multi-disciplinary teams: Give teams the autonomy and authority to shape their own work, allowing for consistent product innovation and better execution of organizational strategy.

2. Embrace transparency: Public organizations should be transparent and accountable for their performance. This builds trust with constituents and ensures that public works are delivering value to the community.

3. Embrace technology and platforms: Leverage technology to optimize processes and overcome constraints. Platforms can provide solutions to growth obstacles and open up opportunities for collaboration with external partners.

In conclusion, effective public digital organizations require a focus on empowering teams, embracing transparency, and leveraging technology and platforms. By learning from successful private companies like Amazon, public organizations can better serve their constituents and deliver value in the digital age.