What is Digital Leadership?

https://open.spotify.com/episode/3SBvigNTuC4jCDuHoOUpfj

The rapidly advancing digitalization of all divisions does not stop at the demands on people themselves. The veteran hranly hrmanager suddenly has to become an influencer for his company on LinkedIn, the backend developer is suddenly required to be involved in product development in the agile team and the manager…. Yes, what actually happens to the manager? What does Digital Leadership look like? And where are the differences to “analog management”? We have investigated these questions for you.

What features does a Digital Leader need?

Führung und Lernen bedingen sich gegenseitig small

The bad news first: there is no checklist of digital manager attributes that you just need to tick off to become a certified digital leadership expert quickly and with 100% certainty. Just as digitalization is flexible and constantly evolving, the executive must always reorient at the changed requirements.

Various digitization frameworks, blueprints, strategy papers, etc. have been published in recent years, discarded in whole or in part, further developed or nailed to the office wall as lip service. The topic of digitization suffers from the sheer mass of input in the often lack of qualifications of the authors: managers who declare full-bodiedly that the digital transformation is completed in their company (“Completed” is by definition impossible) write books in self-publishing, which are guaranteed to lead to digital success. Hordes of psychologists offer in obscenely expensive seminars to attest to the necessary “digital skills” to analog leaders, but without changing their attitudes or ways of thinking…
It is therefore necessary to examine all these sources extremely critically and with the necessary distance. However, if one compares these results with the experiences of leading companies with a digital focus, some points can be filtered out, which are mentioned again and again when it comes to digital leadership. In the absence of a long-term, scientifically validated list, they form the best framework for modern leadership that we currently have. These include:

A digital leader and his team develop visions instead of controlling the implementation of targets and the achievement of goals.

You’ve probably encountered the metaphor of the wolf pack, in which the leader symbolizes the alpha animal. For decades, this corresponded to the self-image of managers: the leader of the pack, the strongest/smartest wolf, who is in complete control. Where simple employees put their feet up after work, he was (or “they” – but let’s face it: it was almost always an “he”) also available around the clock on weekends or on holiday. Work-life balance? Rather work-work balance! Hahaha, who will be well received at the next board meeting.

With the digital transformation, a new level was added to the metaphor: the aerial view of a pack of wolf in a snowy landscape made the rounds in many networks. It showed an aspect in the behaviour of wolves that has so far been deliberately ignored: the alpha animal is by no means a “leader” in the direct sense of the word. He does not march in front of the pack to show the way. No, the lead wolf is always behind the other animals at the end of the group. From there, he can ensure that none of the other wolves fall back, are attacked, or take another path. The alpha animal does not boldly pave the way for others through its superior strength and endurance; it ensures that the whole group is successful through its foresight and the ability to make the pack one.

Hardly any picture describes digital leadership better. After all, the manager is not a locomotive that pushes ahead and pulls the less qualified employees behind him. It is an enabler, an enabler that holds the team together, eliminates difficulties and thus enables individual members to reach their potential. After all, let’s not deceive ourselves: who creates the real values in a digital company? Who is really replaceable? The AI expert with a degree from the elite university, who hasn’t opened his LinkedIn mailbox for months because he gets 4 job offers every day beyond the 250,000/p.A.? Or the manager who, like hundreds of thousands of others, is still looking for his role in digitalization with his business studies + MBA and the motivation posters on the wall of the individual office?

This does not mean that digital transformation will make executives redundant – on the contrary! They are more important than ever. Only the requirements profile is now a significantly different one. They must succeed in bringing together the highly qualified employees of their team under a common vision (a vision that they could only develop through the input of those employees) and enable them to apply their skills. This means that the Digital Leader keeps his team’s back and provides the environment, processes and structures needed to implement the common vision.

The classic metrics against which successes of companies, departments and their executives were measured have also become largely obsolete due to digitalization. How do you measure the success of the business intelligence team? The size of the data warehouse? The ratio of unstructured to structured data? The number of requests from other departmentsthat have been answered?

And if Team X has been working on the new app for two years, which will bring in millions directly on the first day of release, but has no measurable results by then – what is the point of insisting on old analog measurement and control systems?

Finding an answer to such questions is one of the fundamental problems of digitization and the search for it is one of the many difficult tasks of digital leadership.

A digital leader uses as extensive a data base as possible to make decisions and avoids, as much as possible, incorporateing his subjective opinion into a decision.

Another image, which often subconsciously swung along in the self-image of the analog managers, was the idea of the leader as a great general, who outmaneuvers the enemy through clever tact and, with ingenious moves, also astonishes his own troops. The “enemy” here is the competition, inside and outside the company. If we are honest, the customer was often painted a goal shift – after all, before digitization,he was a mystical being whose behavior apparently did not follow any discernible rules and who decided with his benevolence on personal success.

The analog-leitwolf-general manager saw only himself as being able to develop the right plans and strategies through his imaginary genius – and a good dose of glass ball use – that would bring the enemy to its knees. Others lack the necessary foresight and intelligence, he said.

At every opportunity, it was always emphasized that there was a huge predominance of difficulties that would be against the analogous manager. Not a bad idea: if the analog manager failed with his plans, he could always blame the circumstances and the incompetence of others. If he was successful, his victory became all the more impressive in view of the resistance swayed by him.

But digitalization has completely overturned the basic prerequisites for this kind of self-expression. The customer is no longer an inexplicable mythical creature! Today, it is illuminated in all facets, its wishes and goals recorded and accessible at any time. The big change that has come in is that our entire world, both entrepreneurial ly, and privately, is now digitized and data-driven. The use of digital applications, which a digital leader always focuses on, and the ever-increasing performance of our technologies, has significantly increased the data wealth.

Data – and with it knowledge – is now the most important asset of a company, because it determines the success of products and services. Thanks to powerful BI, market potentials can be discovered in seconds. What does our product need in order for our customers to offer it preference over the competition in the future? A call in market research is enough to find out the result. And if it turns out that we lose disproportionately large amounts of sales in the second step of the checkout of our online store, our UX team can find and fix the reason after a short analysis.

The previously popular presentation, the many difficulties and problems would have made it impossible for the manager to succeed/would have made success almost impossible and could only be overcome by the unbelievable talent of the manager, now no longer works: if these difficulties actually exist, they would be proven with data and facts. By insisting on subjectively perceived resistance, the analog manager only makes himself ridiculous in a digital, evidence-based environment.

With better data and a better understanding of the personality of our customers, the demands on management change: where the analog manager made decisions that, in their opinion, could have a chance of success, digital leaders act according to the data situation. It is true that no human being is able to act completely objectively; the continuous experiment, however, is what distinguishes analog from digital guidance.

This may also mean that the Digital Leader’s prestige project is sacrificed to the red pencil if the data shows that success is questionable. Digital leadership therefore also places great demands on the manager’s ego: Only those who can put back here and are able to orientthemselves coolly and objectively to the data situation can keep up with the digital transformation and show lasting success.

This shows once again the particularly large discrepancy in the characteristics that have traditionally been linked to the management level and what is actually in demand due to digitalization. The days of big egos, great speeches and big gestures are over. The time for flexible team players to make data-based, objective decisions is dawning.

A digital leader develops strategies that focus on the customer and ask about their wishes and needs, rather than thinking from the company’s point of view from the beginning.

In the end, this is a continuation of the “great general” metaphor: companies also develop something like an ego through their culture. “We are market leaders, we design our products as we think it is right” is a good principle – until suddenly a competitor appears who listens to the wishes of the customers and literally rolls up the entire market overnight.

The importance of corporate culture for digital transformation cannot be overestimated. It determines depth, speed and ultimately also about the success or failure of digitization. All areas must therefore be aligned with the customer’s vision – a process that should be pushed forward by digital leadership.

As already mentioned, this includes first of all the acquisition of knowledge through appropriate data collection and processing. If the company has gained the best possible insight into its customers, their needs, interests, dislikes, idiosyncrasies, etc., this information must be consistently implemented. A high speed and flexibility is absolutely necessary for this, because profound social changes are taking us at an ever-increasing pace.

Global events reach billions of people through ubiquitous networking and influence your opinion. A new example of structural sexism in the US is spread over Twitter, and suddenly a German company is facing negative publicity because its board is made up of old white men. An app ecosystem like WeChat is an indispensable part of China and opens up the race to develop a comparable system in Europe. Hundreds of other examples could be found. Those who do not adapt to such developments and adapt their communication, processes and economic activities flexibly will be overtaken by the competition. Once these two steps, data focus and flexible and fast implementation, have been met, the path towards customer-side thinking has been taken and long-term success is possible.

Instead, if a company decides to plan and act from its own point of view, the course is set to be overwhelmed by digitalization. Do you market your products along the path that corresponds to your company’s self-image, even though your customers are on the move in completely different channels? Then you’ll probably feel like the dozens of luxury brands that steadfastly refuse to switch from stationary to internet retail, even though 90% of their customers prefer to shop online – and then go under.

Are you resting on your position and past achievements? Then you will probably suffer the same fate as the German car industry, which relies on oversized SUV road armour while customers are interested in agile electric vehicles – and have therefore been left behind by international competition.

But the customer’s view is not just a company-wide aspect; it is a core competence of every single digital leader. The customer is the focus of all aspects of his actions. Digital leadership therefore also means courageously deviating from company requirements if they serve the end in itself. A difficult field that quickly gives the digital manager a reputation for being “uncomfortable” in an old-fashioned company. This inconvenience, however, is preferable to the rigid work in the corset of an analogous corporate culture. Because while a company that is unable to adapt to the new circumstances is on its way to ruin, your customer centering will reward you with success for a long time to come.

But how can this customer focus be implemented in everyday life? The answer to this must be: depends on the case. From the perspective of product development, for example, the question changes from “what can we sell to the customer?” or “what does the market want?” to: “How can we inspire people?”. In production or in the service segment, the questions are no longer “how can we make our product better?” or “how can we sell more?” but: “What need does the customer have – and how can we satisfy it?”.

A digital leader focuses on the result, not the output.

Digital Leadership understands that digital transformation is first and foremost a transformation of strategies, cultures, structures and the understanding of customers. By using modern digital technologies, the Digital Leader achieves a higher quality of results. Yes, it is true that digitisation can speed up and improve the old work processes and procedures – but this is a very short-sighted approach. Real added value results instead in the change of the retracted patterns. Instead of increasing the previous output, the focus should be on creating new, potentially completely different results.

For example, you can transfer procurement applications for your administrative buildings from paper to digital format, increasing output (faster applications, cheaper, easier, etc.). At this point, however, you could also directly ask why 100% of your administrative staff still have a job and do not work through work-anywhere from home or anywhere else. This would have made little difference to the output, at least initially, but would have had a significant impact on the result (more efficient, happier employees).

The Digital Leader is therefore aware of the current “key figure problem”, i.e. the difficulty of grasping and measuring digitized work entrepreneurially, consciously and always strives not to fall under its spell. A departmentthat has taken the first step towards digital transformation may not be better in absolute terms, or perhaps even worse, than one in which “everything is the same.” However, due to the profound changes in its processes and ways of thinking, it will react faster, more comprehensively and more successfully at the first sign of change. Thanks to the digitalization that has begun, flexibility has become part of their DNA.

This long-term result is therefore preferable to short-term improved output.

Another extreme here would be the “over-motivated digitizer”, which throws all known patterns overboard and immediately and exclusively relies on a digital transformation that is as comprehensive as possible. Only in very few cases (e.g. building completely new teams) is it possible to ignore the day-to-day business in this way. The right speed, which deviates from familiar metrics and shifts to digital results, depends on the respective company, the industry,the culture and much more.

A digital leader pursues the vision holistically, instead of optimizing individual key figures through isolated actions.

The task field of the analog manager is often divided into many, small to-dos. Here a bottleneck in controlling, there a project in arrears, here the technology is not sufficient and one of the employees has slipped into a task for which he is not qualified at all. If the manager has managed to extinguish all these fires with a lot of personal commitment, the next problems are already waiting. The work was carried out in isolated actions that did not improve the overall situation.

The Digital Leader, in comparison, concentrates on changing the structure and culture of his remit: by empowering the team, i.e. consistently equipping him with all the necessary powers to work independently, he has already created the foundations that enable his employees to solve problems. Thanks to the consistent use of digital systems, which is an indispensable part of digital transformation, this positive effect is amplified.

Thanks to the common vision that the Digital Leader has developed with his team and which is constantly being developed, not only are everyone pulling together – they are also pulling in the same direction.

This vision, which is closely linked to the respective product and its characteristics, forms a brace around the work of the entire team. Instead of the thousand construction sites, digital leadership can now limit the focus to just two things: on the one hand, the further advancement of the digital transformation in order to amplify the positive effects and to benefit new ones. On the other hand, by removing obstacles, whether technical, bureaucratic or social, the digital manager enables his employees to make full use of their talents and thus to do the best work.

It is this type of work – fast, flexible, digital, independent, customer-oriented – that makes a digital transformation such a worthwhile goal for companies. The competitive advantages that arise from this are so significant that they can quickly decide on success or failure.

So you could see the Digital Leader as a leader who has a stronger impact on structure and processes. Digital Leadership is the support and enhancement of the values of digital transformation. The focus moves as far away from daily content as possible and instead creates help for self-help. The modern digital manager is a supporter, amplifier and motivator – and no longer a controller, self-promoter or driver.

Digital Leadership summarized

Digital leadership is thus reflected in a manager’s ability to understand, drive and transform digital transformation into customer-effective results. It is important to be careful and not too drastic in changing the historical structures and processes of a company. A lot of empathy is also required if employees are to adapt to the new, digital management style. To ensure the success of the changes, a clear, common vision is needed – it distinguishes the analog “everyone on its own” way of working from the digital, which is characterized by empowered work by team members, the consistent use of digital systems and absolute customer focus.

“Getting all these aspects under one roof” is a mammoth task for any executive. It is almost impossible to achieve good results in any sub-area immediately. This makes it all the more important to constantly examine one’s own achievements and to adjust where there is a need. Digital leadership is not a single trait that could be trained, but a sum of different ways of thinking and acting that influence each other and must be treated accordingly.

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