More and more companies are taking measures to meet the growing demands of digitalization. For a long time, the focus was on adapting technologies and processes. Websites and online shops were created, CRM and ERP systems were implemented and digital product versions were introduced. In many cases, however, these initiatives have not been enough. Not only profound interventions in the organizational structure and in the business model of the company are crucial in order to ensure future  competitiveness, but also interventions towards a new, digital leadership.

Many traditional management tools are limited to use in modern day-to-day work. There is a need for new management methods tailored to the digital transformation that put employees and collaboration first. Digital leadership is required! 8 important components of digital leadership are of particular importance.

8 components for successful digital leadership

1. Network instead of line

The management structures in companies are becoming increasingly complex. On the one hand, employees are increasingly confronted with tasks that are subordinate to several superiors. Project work in particular is often carried out across several departments or companies. On the other hand, many employees are now working on several projects simultaneously. Managers should therefore attach great importance to efficient communication among themselves and with their employees.

2. Agility

In times of digitalization, the demand for companies change constantly and often at high speed. Therefore, long-term detailed planning is neither useful nor purposeful. Only those who react quickly and flexibly to new requirements and keep an eye on the entire value chain can build and maintain a competitive advantage. Methods such as "Scrum" or "Objectives and Key Results" (OKR) are excellent means of promoting the agility of companies.

3. Personal responsibility and autonomy

In digital companies, teams must act independently. This reduces the need for time-consuming agreements with superiors and ensures the necessary speed and agility in achieving goals. In addition, the greater freedom of action promotes the employees' motivation and their willingness to contribute to the achievement of company’s goals.

4. Coach and facilitator

Digitization emphasizes the role of a manager as a coach and facilitator. As a kind of service center for employees, managers should guarantee optimal working conditions, remove obstacles in the achievement of goals, and proactively initiate strategic measures with foresight to both demand and encourage the assumption of personal responsibility at the same time.

5. Value orientation

As complexity increases, the standardization of work processes becomes more difficult. That is why digitalization requires "smart creatives" who face new tasks and challenges with intelligence and creativity, instead of just following rules. In order to attract and promote these employees, companies must place particular emphasis on value orientation.

6. Entrepreneurship

The pressure to innovate resulting from digitalization demands entrepreneurial thinking from managers. In order to be able to guarantee the overview required for this, a strong network of different company areas and a holistic development of products and services are necessary.

7. Leadership instead of management

Management stands for planning, directing and controlling processes in the company. Managers delegate tasks, demand work results and are responsible for the performance of their employees. Leadership, on the other hand, means inspiring employees and supporting them in their further development.

8. Transparency

In order to enable self-organization and commitment, employees must have access to all the information they need within the organization. This requires an open and trusting culture in all parts of the company. Transparency is therefore also a prerequisite for the successful application of methods such as Scrum, Management 3.0 or OKRs.

Summary

Digital leadership is one of the most important building blocks of tomorrow's organization. Agile methods such as Scrum have already found their way into project management in many companies. At management level, however, the outdated “Management by Objectives” (MbO) framework is often still used instead of the modern and agile “Objectives and Key Results” (OKR) framework. At this point, a rethink should take place. Leadership needs to put the employees at the center in order to meet the demands of digital transformation. Find out more about digital leadership in this interview with Ursula Vranken.