Leading in times of “digital transformation”

Everyone is talking about digital transformation! Lectures are being given, projects worth millions are being launched, new structures and processes are being set up, and even a board position is being created: The CDO (Chief Digital Officer).

However, what exactly is behind the digital transformation, what goals does the transformation serve, and what demands on the management of the company arise from it, is rather nebulous and controversial. As is so often the case, the desired change is not clear, and thus the design of the corresponding leadership behavior is rather a product of chance.

We will certainly quickly agree that the digital transformation affects all business areas of the company: whether we are dealing with logistics, production, sales or even the supporting processes (finance, controlling, marketing, human resources), the aim is to reach internal or external customers more effectively and efficiently. Effectiveness can be measured by the success in satisfying customer needs, i.e. the degree to which new customers are acquired and existing customers are retained. Efficiency describes the effort we put into this. Digital media help to increase added value by making optimum use of existing data and information. So much for the theory.

But what does this mean for the manager? First of all, according to experience, something happens which we have all experienced, and which initially leads to the frightening realization that we become slaves to technology: Reaction times are shortening, KPI’s are coming to the forefront, requests must be answered immediately, whether by e-mail or in an application. Data volumes are increasing and need to be analyzed and evaluated. Complexity increases. The pressure on employees is growing! Not only because everything has to be done faster, but also because transparency about performance behavior is created, because expectations are raised in the customer’s mind that wants to be fulfilled.

Managers are usually neither mentally nor methodically prepared for this development. They stand virtually unarmed in the hail of internal and external resistance.

Leading means serving! But who exactly does the manager serve when he is asked to digitally transform his area of responsibility? The shareholder, the stakeholders, himself, the technology, the customers or the employees?

Looking at digitalization only through the eyes of IT is just as wrong as professional visions, which neither corporate culture nor organization can cope with. Digitalization is, therefore, a particular challenge for managers because it is once again necessary to look at all the building blocks of the company systemically: It is important to keep the objectives of digital transformation in mind, to monitor the key performance indicators (KPI’s) and, in the event of deviations, not only to transform structures, processes and systems but also to give people and the corporate culture the opportunity to live the change.

And this is where leadership responsibility is particularly important: perspectives must be shown, decisions must be made with clarity and attentiveness, with all appreciation for those affected. Digital technology should help us to be successful, it should not turn employees into victims. Managers are particularly called upon to prioritize, to focus on people and to support them in using new instruments and technologies sensibly. However, this should be done with inner freedom, sovereignty and self-direction. This requires not only professional and technical competence but also empathy and business ethics.

The digitization of business processes holds numerous opportunities if it is possible to include all the building blocks of the company and use them as a means to an end: The increase in company performance with optimal use of the available resources!