No board member or business leader can as an individual say – or influence – how his or her own company will look in three to five years. It‘s also unclear how the competition will react or which technologies will triumph. The only thing that is mostly certain is that there will be competitors that no one knows today. Market leaders that seem unassailable today could disappear from the landscape, like Nokia a few years ago. Even for “digital native” companies that once were market leaders, success can quickly become a thing of the past, as was the story of MySpace or currently Yahoo.
This dynamic through volatility and insecurity, complexity and ambiguity not only shortens the planning horizon of technological developments in a previously unknown way. Pressure also increases on companies and their leaders to attempt to calculate the incalculable. The result is in the complex world of today companies can no longer be guided centrally. Many buzzwords are currently being discussed as alternatives: “agility” and “dynamism” will be increased by “collaboration” and “participation”. Methods such as “design thinking” or “Scrum” will raise the power of innovation, customer orientation as well as speed, and not just in the IT industry.
Company leadership is changing correspondingly. But the question remains: how?
Researchers have investigated the status and perspectives, the demands and challenges to changes in company leadership. In a study carried out by the Centre for Leadership and Behaviour in Organisations (CLBO) at Goethe University in Frankfurt, management and workers were polled about their thoughts, then they discussed the results with experts and finally with the help of renowned cooperation partners, possible processes for the company were designed and tested.
All customers in focus
In summary, digital leadership shows a consistent orientation to the “customer” – from inside and out. For a successful outcome to this “user-centricity”, company leadership should have “a joy for a loss of control”, above all bringing together the right people and creating the basic conditions for target-oriented work, but no longer making every decision by themselves. This position is based on the conviction that complexity cannot be grasped and influenced in all its facets by digitalisation. This sober insight is an important condition for flexibly and agilely taking advantage of – instead of merely reacting to – the constantly changing demands of competition. The survey has however showed that employees are not very good at evaluating the competencies of their managers, and in the opinion of the leadership itself there was still much to do in this regard. This is because currently the skills of the individual and the competencies in the company are rather lowly valued. At the same time, it was mostly unclear where the needed competencies can be increased or expanded.
Digital leadership has to start at the top
Without support of the company’s management, digital leadership will never be successfully implemented – in this, all those surveyed – independent of branch or company size – were united. Just as united were those polled in saying that the example of prominent CEOs in the US or impressive “digital native” companies did not provide the impetus toward introducing or implementing digital leadership. Only when direct competitors had
success with new leadership practices or when the first successes were recognised in their own companies, did those surveyed find motivation for further development in digital leadership. Furthermore, desire and reality are markedly different. While on one side, the topic of digital leadership is considered important for all business areas now and in the future, it is currently still weakly applied. For nearly half of those surveyed a discussion around digital leadership in their own company was “so far not an issue”. Frank Kohl-Boas of Google Germany has spoken out against this lethargy: “It is high time to tackle this topic radically, faster, with more courage and on the basis of its importance.”
But how will the discrepancy between the desire and the reality, especially with regard to the demands on leadership on one side and their underdeveloped competencies on the other, be harmonised? The bottom line of the study was that there is no silver bullet to digital leadership, that is, there is no identifiable toolkit that is eective in every situation. Therefore, we have to ask: what can a company do?
Every beginning is agile
This is the aspiration for the so-called Think Digital Screening that was worked out in the context of the study from the resulting hands-on experience. The goal is make company management willing and able to value digital leadership and to decide on the processes within the company, processes that are appropriate for the company’s needs. What is special about this is that an increase of status was already marked by a higher level of agility that would be later reached in the entire company through digital leadership. Think Digital Screening shows for example how management currently operates in hierarchy-free, selforganised teams. In the teams, a task can be, for example, how the company leadership in the future will look in order to able to better fulfil the demands of customers (non-management employees also participate in this).
Two steps to starting
The screening is a very lean method that delivers operatively useful results in a short time. First, the inventory will be looked at as a whole – from the current instruments (such as leadership principles, measures for development of management personnel, etc.), targeted results (from surveys, performance evaluations, etc.) to formal procedures (such as meeting culture, decision processes, etc.). From here possible capabilities will already emerge for the transformation toward digital leadership. Emphasis is laid on moderated group dialogues with leadership members who are selected at random. ´In this are simulated how different teams can organise themselves in a short time into flexible and agile leadership processes. These focus groups make it possible to evaluate the current preparedness and ability for digital leadership. Depending upon the company, its size and structure, it is usually enough that a few groups working two hours each decide on the most important management issues and needs as well as the best options for further progress.
Building types and scenarios
The screening builds the foundation for the company to build its own future leadership style. This is because digital leadership will develop and be eective dierently in each company. It is important for each company to create its own model. The ideal type of leadership can in addition be presented as very malleable, for example through a targetperformance comparison for leadership behaviour. Alternatively, scenarios can be created: The future agile day-to-day of managers will be graphically imagined, again in contrast to their current tasks. ´From this emerge the demands on management and their competencies, and if necessary also the needed changes in structures and processes in the company, for example, how decisions are made.
Just let it rip and learn from experience
Every company has to find its own way in implementing new types and scenarios. In practice, it is often worth it to first create free places or platforms, such a think tank. There new methods and forms of cooperation can be rehearsed concretely that lead to improvements and useful innovations faster. Mistakes and negative experiences are thereby an elementary part of learning. In order for this to work, currently existing hierarchies and structures for decisions that exist in parallel to them must not be immediately slipped in. Management has to unlearn the famous statements “yes, but” or “I know this already”. Then digital leadership will awaken much undiscovered potential in the company and use it successfully against the competition.
Dr. Michael Groß
Groß & Cie