Leadership in Times of «Digital Transformation»

Everyone is talking about digital transformation! Lectures are held, multi-million dollar projects are launched, new structures and processes are established…even an executive board position is created: the CDO (Chief Digital Officer).
But what exactly “Digital Transformation” means, what objectives the transformation serves and what requirements arise for the management of a company, is rather nebulous and controversial. As is so often the case, the desired change remains elusive and shaping the corresponding leadership behavior consequently becomes, if anything, a product of chance.

We can certainly quickly agree that the digital transformation will affect all business areas of a company. From logistics through production and sales to the supporting processes (finance, controlling, marketing, personnel management), it is about reaching both the internal and the external consumers more effectively and efficiently. The effectiveness of this process can be measured not only by the success of meeting the customer’s requirements, but also by the extent of customer acquisition and customer retention. The efficiency of this process describes the effort that we have to put into it. Digital media act as a value driver through the optimum utilization of existing data and information. That is at least the theory!

But what does this mean for the executive? We know from experience what happens first because we’ve all been there and initially made the alarming discovery that we become slaves of technology: response times are shortened, key performance indicators (KPIs) take precedence, inquiries have to be answered immediately, either by email or through an application. Data volumes increase and have to be analyzed and evaluated. Complexity is growing. The pressure on the employees mounts! Not only because everything has to be done more quickly, but also because the performance behavior becomes more transparent and expectations are raised on the customer level that have to be met.

These are developments that the executive is generally-both mentally and methodologically-unprepared for. He or she stands virtually unarmed in a hail of bullets from internal and external resistance.

To lead means to serve! But whom, exactly, does the executive serve, if he or she is asked to digitally transform their area of responsibilities? The shareholder, the stakeholders, themselves, the technology, the customer or the employees?

To view digitalization only through the lens of information technology is just as mistaken as visions based on technical objectives that neither the corporate culture nor the organization are able to achieve. Hence, digitalization in particular challenges the executive because it is time again to view all building blocks of a corporation on a systematic basis: It is imperative to continuously keep in mind the objectives of the digital transformation, to monitor the control indicators (KPIs) and-in the event of deviations-to not only transform structures, processes and systems but also to give the human element and the corporate culture the opportunity to adjust to the required changes.

And in this area leadership responsibility is particularly in demand: perspectives have to be indicated, clear and prudent decisions have to be made and the highest respect for affected stakeholders is required. The digital technology should help us to be successful but not victimize our employees. The executive is particularly called upon to prioritize, to put the people involved in the center and to support the employees in the meaningful use of new tools and technologies. But this should be achieved poised, self-directed and on the basis of inner freedom. And it obviously calls both for the required specialized and technical expertise as well as sensibility and corporate ethics.

The digitalization of business processes provides numerous opportunities, if it is possible to involve all building blocks of a corporation and to use them as means in the quest to achieve the ultimate goal: to enhance the business performance with optimum utilization of the available resources!

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