Agility, Guidance

Digital leadership: How to lead successfully even in turbulent times.

You will find out what digital leadership is, what you need to consider – and how you can apply digital leadership in your company. And what unfortunately often goes wrong…

Digital leadership – new times, new leadership!

Definition of digital leadership

Digital leadership is the management style that companies need to be successful in the digital age.
Digital leadership strengthens the ability to deal constructively with rapid change (agility), promotes digitalization in the company and adapts leadership to virtual collaboration.
The term was coined by the Social psychologist Prof. Dr. Utho Creusen.

Rolf Fischer, 58, has been running a chain of car dealerships for decades. His parents built up the company and he expanded it. For him, the company is much more than just his workplace. After all, he was already playing with toy cars under Father Fischer’s desk here as a 4-year-old. And he was immensely proud when he was allowed to move a used car on the company premises as a teenager. It was always clear that he would take over the company one day. The car dealerships are his life’s work.
He sees retirement age approaching with some concern. He has been doing all this for so long that he can hardly imagine that anyone can hold a candle to him. What will happen when he no longer sits in his black leather executive chair every day?

The Fischer Automobile dealerships stock a premium brand as well as new cars from other brands. High-quality used cars of all makes can also be purchased at Fischer’s dealerships. Business is quite stable. And stability is one of the most important things for Rolf. And reliability. Up to this point, the concept has worked really well: The car dealerships and the Fischer family have a really good reputation in the region. But somehow there is movement in the stable car dealership idyll.
And, as we all know, movement and stability don’t go together very well…

The pandemic has – involuntarily, of course – brought about some changes in the company. Before coronavirus, some younger employees already wanted to work from home. Female employees in particular wanted more flexible working models in order to be in harmony with the needs of their families. Wasn’t in it for a long time, but now the facts have simply emerged.

What’s more, the car market is no longer what it used to be.

And anyway: Rolf has been observing the shift of work, orders and customer contacts to digital for years. He recently picked up the word digital leadership from his golf buddy Stefan while playing golf. Stefan, CEO of a small publishing house, swears by it. A lot has changed for the better in his company since then.
I see.
Rolf can’t get this digital leadership out of his head. What is that actually? Digital leadership? What exactly is digital about it? And does he need it?

What is digital leadership? What does digital leadership mean in the company?

Digital leadership means leading in such a way that the company can cope with the world shaped by digitalization.

First things first: there is no special method, no toolbox called digital leadership – even if there is currently an incredible amount of talk about digital leadership. So what is digital leadership?
In principle, there are several definitions:

1. leadership in times of digitalization

Nothing stays the same: the ability to communicate with the whole world in seconds, rapid change and VUCA mean that companies have to adapt to rapid change on a permanent basis. Digital leadership is a management style that enables companies and employees to react quickly. To achieve this, existing organizational structures must be made more flexible and agile.

The basis for quick reaction times are, for example

New, decentralized structures <instead of> many hierarchical levels, which slow down decisions and the flow of information
Stimulating creativity <instead of> walking on well-trodden paths
Co-creation <instead of> departmental silos
Dealing constructively with mistakes <instead of punishing> deviations from the rule.

2. leadership to digitize the company

In this case, digital leadership means driving digitalization in your own company. This means exploiting the possibilities and opportunities that digitalization brings. Managers must lead people and companies through digitalization. That means

Keep your eyes and ears open for developments, changes and development opportunities,
Use new digital working methods
and accompany the transformation/change towards a digital company.

This requires skills such as decision-making competence, change management and digital competence.

3. digital leadership in the sense of virtual leadership/leadership of virtual teams

Many people understand digital leadership to mean leadership in virtual space or leadership at a distance. Digital working methods such as working from home, teleworking and online conferences are a central component of digital leadership. This poses different challenges than on-site management; these include technical basics, empathy and communication behavior adapted to the situation.

Summarized

Redesign organizational structures and the corporate culture so that your employees are able to react quickly to changing circumstances!
Keep your eyes and ears open for changes, development opportunities and new digital ways of working!
Join the transformation to a digital company!
Use digital working methods such as teleworking and online conferences!

Digital leadership – for whom?

Now that Rolf knows what digital leadership is all about, he considers it useful for his company too.
He can do something with all three approaches to digital leadership:

the adaptability required today,
the upcoming digitization of the company and
of the leadership at a distance.

1. flexibility and responsiveness

Everyone at Fischer Automobile has now realized that times are changing.
The new times are manifesting themselves in the form of impatient customers. They demand quick and flexible responses to their wishes. Young employees also bring a different understanding of leadership and collaboration:

Laura, 26, works in the marketing department. She joined the company straight after graduating. It is actually their job to use social media and break new ground in marketing. “Sounded really great in the job description”. But unfortunately it’s not that easy when you have a boss who swears by glossy printed brochures. And doesn’t really know what Insta is. “Yes, my grandchildren have that too” is all he can say. Laura is annoyed. Man, what she could get going if she wasn’t constantly slowed down!

Laura clearly shows that the company is ponderous, slow and, for her, unpleasantly hierarchical. She does not simply take the hierarchies and convoluted bureaucratic channels in the company for granted, but questions them without mincing her words. “How am I supposed to react quickly if I have to visit a few offices for every little thing?” She also expresses critical words calmly to superiors. Again and again. This seems to come naturally to them. Some people don’t like it at all; others are happy about this breath of fresh air. At last someone is saying something.

2. digitalization of the company

And the new student, Denis, recently had a fit of laughter when he looked at the work surfaces on the computer for the first time. “Are you serious now?” was his comment. The rest of the day he had to spend with the ridiculed program, he didn’t laugh anymore, but just shook his head and sighed. Rolf saw him speeding out of the yard on his racing bike that evening, as if he just wanted to get away. Yes, that’s right, he’s not wrong – Rolf knows that the technology needs to be upgraded in many respects.
It would be unthinkable if Denis or Laura were to leave the company. Finding young employees is not so easy these days. Recruiter Jutta, 42, often complains to Rolf that it takes months to find someone suitable. Gone are the days when 200 application folders piled up on Jutta’s desk…

3. virtual teams

And then there are all the mothers in the company who have been wanting more flexible working hours and home office for years. The fathers are already starting to do this…
Since the pandemic and lockdown, this has simply become established and it’s not easy to take it back.
Rolf will probably have to learn to deal with it. Everyone has to.

Yes – somehow the wind is blowing differently. Except on his golf course, of course. The fact that some things in his company need to be digitized can be postponed less and less. It’s time for him to get to grips with digital leadership!

Why is digital leadership important?

Quite simply, circumstances and the world are changing rapidly and unpredictably.
With digital leadership, you enable your company to cope with this (ongoing) change.
Again and again we hear: “Yes, but there has always been change. And the way we’ve always done things has been great so far. We don’t see any need for action.”
Aaaaabut:
We have to strongly disagree! Sure, something always changes, but never before have there been such fundamental changes in business models, customer requirements and technologies. Entire industries have been changed in the course of digitalization and large companies have gone bankrupt, including companies that were in the top ranks of indices. The entire market has been turned upside down: huge companies such as Kodak and Nokia have disappeared in no time at all or have not been able to build on their former success, while new companies such as Apple, Google, Facebook and Microsoft have risen to the top and after a relatively short time are already worth trillions.

Digitalization is bringing about changes in many areas. – Companies must adapt to this if they are to remain successful in the future. That is why digital leadership is essential.

What changes must digital leadership respond to?

Change through digitalization: new business models

Rolf sums up: Yes, there have been some changes in recent years. What exactly is there? What changes have taken place in his sector, the automotive industry?

In the decades before digitalization, the automotive industry was constantly evolving. Cars became faster, engines improved, designs were adapted to physical conditions and trends. But one thing has remained the same for over 100 years: customers buy cars to drive from A to B.

Digitalization has changed this business model: people want to be mobile, but still see no need to own a car. The use of smartphones makes it possible to rent a car only when you need it, where you need it and for as long as you need it. No more and no less.

You stand in the city center of Berlin, check the nearest Drive Now car, drive off and simply leave it when you no longer need it.
Or a different model: in the summer you speed through the green countryside in a convertible, on vacation you drive a van because you need plenty of space for your family and luggage, and in the winter you are chauffeured around in a chic sedan. You don’t own any of the cars.
Or a train concept: you have a ticket and can use a scooter, a car and of course the train. Car travel is included, even though you are actually a rail customer.

Other customer habits have also changed: Companies such as Amazon, which deliver everything to your doorstep, and increasingly due to the coronavirus pandemic, customers have developed the desire to do their business digitally from their sofa – with a pad on their lap. So why does he still have to come into a car dealership to have his service done or to buy a car?

As you can see, digitalization has brought a lot of change and, above all, new customer requirements, new opportunities and new flexibility.

Rolf has been observing this for a few years now. However, he didn’t really feel threatened by it. After all, the car dealerships are in a rural area and you need a car there. But there is a lot more change to come…

Change through digitalization: new technology

Let’s stay with the example of the car. Other parameters have also changed here: previously, the durability of the car, especially that of the engine, was what distinguished one car from another. The quality of their engines was one of the reasons why Mercedes-Benz, for example, was so successful. Germany was the market leader in engines. But the market is changing.
Tesla, for example, is no longer simply bringing cars onto the market, but rather electric devices that drive. The engine, which was previously the heart of a car and also its most complex component, can simply be removed and replaced. No great effort. The small navigation display is suddenly a huge screen with a touchscreen: Tesla is preparing for autonomous driving. It goes in the direction of computer technology. This means that digitalization is also changing the market, particularly at a technical level.

Change through digitalization: new competitors

In this respect, it could be that the biggest competitors in the near future will no longer come from the automotive industry, but from companies such as Apple and Google, or the vacuum cleaner manufacturer Dyson. They already have the topic of autonomous driving on their radar. This is fundamentally changing the industry.

Change through digitalization: new customer requirements

We have already talked about the fact that people want to be mobile and therefore do not necessarily want to invest several thousand euros in a car.
Customers and their demands are changing. While members of the older generations still want to underpin their social standing by showing off status-laden motor vehicles, this is hardly the case with Generation Y or even Generation Z; they no longer position themselves through ownership.
Even the brand and release date of your own smartphone are no longer important; if you want, you can get a new one every few years anyway. Otherwise, self-worth is based more on skills, attitudes and actions: One person is particularly good at skateboarding, the next has a cool style of dress, others are vegan or take part in Fridays for Future.

As values change, so do the demands placed on the product. If someone just wants to get from A to B quickly and comfortably, they no longer need to buy a car. The question is: How can old, conventional manufacturers like Mercedes or VW keep up? What can you offer that is interesting for young people and that they want to spend money on?
Electronics are extremely important for digital natives. Here, the comparison is no longer with other cars, but rather with the iPhone. Why does Google’s navigation system predict traffic situations to the second, but the car’s does not? Admittedly, most manufacturers now also have traffic data accurate to the second – but for a long time even premium manufacturers lagged behind.
Nonetheless, customers compare and look for what they can find elsewhere in a better design or at a lower price. It’s all just a few clicks away.

Rolf feels caught out: he doesn’t quite understand the young people either. In the past, men in particular were keen to drive a smart car. As soon as the initial driving phase with used cars was over, young men usually quickly turned their attention to new cars. But that has subsided. He has also observed this in the young people in his family. Initially, he thought that this attitude would change when he turned 30 and started a family – but not so.
Potential customers are less likely to simply drop by. In particular, people who want to buy used cars now come exclusively via the relevant Internet portals. Except perhaps customers of retirement age.

Change through digitalization: Buy quickly, directly, digitally

Digitalization has brought us all speed. That’s really great: if you order something online today, you might get it delivered in the next few hours. As customers, we are now used to everything being done in a flash. Or do you like waiting for deliveries that won’t arrive for another 4 weeks? And if something goes wrong or you have questions, you expect a quick answer and not next week. We all want direct accessibility, direct solutions, direct deliveries.

Let’s stay in the world of cars. Suddenly, there’s no need for salespeople here, because customers can configure their car from the comfort of their own home with red wine and slippers.
However, this is how many new car dealerships operate: they have to give up sales. Sales are handled by the manufacturer, with customers configuring their future cars via the website. Deliveries are still made by the retailer, but the salesperson’s job is no longer absolutely necessary.

In a world where everything is delivered immediately, customers no longer want to take their broken car to the garage. The customer reports the damage to the workshop via the website and the workshop sends an employee to collect the vehicle – and bring it back after repair. Voilá. But what will become of the car dealerships?

Yes – what will become of the car dealerships? Now customers want to order cars from home?! Rolf can’t understand that at all. Wasn’t it always the festive highlight of buying a car when the whole family gathered at the dealership, dressed in fine clothes, and spent hours getting advice? And this is supposed to happen with a few mundane clicks at the kitchen table?
The customer buys a car! For thousands of euros! – Surely he can come by…

Change through digitalization: Rethinking society as a whole

What has driven the topic of electromobility?

– Including opinions and comments on social media. This is where a large part of opinion-forming takes place nowadays. Awareness of climate-related issues has largely been raised here. Without social media, without digital networking, the topics of climate and CO2 would not have spread so quickly.
The burning rainforest in Brazil, high water and floods, drought, major fires – we see all of these more frequently. On the one hand, because it is unfortunately becoming more frequent; on the other, because we don’t just see it briefly in the evening news. It quickly becomes clear that we have to act. If you want to know more, you can read studies online or watch videos.
Before the age of digitalization, this topic would most likely not have been able to spread so quickly and intensively. And as a result, electromobility might have been pushed forward less consistently.

Rethinking within companies

As a result, companies have to rethink and realign themselves: They need to upgrade their workshops and learn new things. There are also digital sales processes, paperless service processes and so on. People who have done a job in a similar way for decades suddenly have to completely reorient themselves. Their job profiles are changing, and some will soon no longer exist at all. Anyone who is still tinkering with engines today will find nothing to tinker with tomorrow. As already mentioned, electric motors are extremely easy to replace. The crew of a car workshop now has to deal with the digital aspects of a car and learn a lot. Distribution is also changing completely. Whereas in the past it was all about direct customer contact, today the music often plays on social media. This is where people get information, where you can reach them directly and where you can build and maintain customer relationships.
The industry is undergoing change in many areas…

Rolf swallows. That’s true. It can’t go on like this. Even if that doesn’t suit him. There is much more to do than accepting home offices and self-confident trainees. He experienced this first-hand with his buddy Stefan. A few years ago, he had huge problems with his publishing house. He was on the verge of ruin. And now everything is running again. And Stefan makes a really relaxed impression. He even has more time to improve his handicap on the course.

Digital business models

Would you like another example?
Then let’s take a look at the journalism, media and information industry. If not, then simply skip the chapter.

During the next round of golf, Rolf asks his friend Stefan why he came into contact with digital leadership in the first place. Stefan tells us:

“Do you remember that? The newspaper used to be next to the coffee in the morning; if you needed to look something up, the Brockhaus was on the shelf; in the evening there was the Tagesschau and on Sundays the Tatort. Sure, that’s still the case for us older people. But for those under 40, information procurement and entertainment looks completely different.”

Digitization in the information industry

And Stefan is right: the younger generation may not even know what Brockhaus and Langenscheidt actually are. Or were. After decades of high revenues for the Brockhaus encyclopaedia and the Langenscheidt dictionaries, Wikipedia suddenly entered the information arena. On top of that, Wikipedia was created by someone who didn’t want to earn any money with it. When Jimmy Wales launched Wikipedia in 2001, he wanted to make all the world’s knowledge accessible to everyone free of charge. As we know, he succeeded. Good for the world, bad for Brockhaus.
Also gone are the days when you had to lug heavy, yellow Langenscheidt tomes around the world in your suitcase or school bag. It’s hard to imagine nowadays, when every cell phone offers much better services, including pronunciation help.
The Langenscheidt publishing house tried to keep up and brought out a CD with the contents of the Brockhaus encyclopedia. But it was too late – nobody wanted them anymore. The idea of how knowledge is transported had already changed fundamentally in the meantime – and with it the corresponding business models.

Digitization in the media industry

The world of journalism is also changing: publishers used to sell information printed on sheets of paper. Today, this information is available online. So why should the customer pay for it? What’s more, information is even expected to be provided free of charge. How can a business model be developed from this?
What’s more, what was hot news yesterday evening shortly before the print deadline is no longer news in the morning when the newspaper is on the table.
This new situation is catastrophic for journalists – what business model pays for their work?
There are now various subscription models in the newspaper industry: portals such as Blendle sell individual articles, some newspapers such as Die Zeit finance some articles through advertising, Der Spiegel offers some information free of charge, others only for subscribers, and taz relies on voluntary payment.

Here and also in the television sector, everything is changing. New players (such as Netflix) are suddenly leading the way, and requirements are constantly changing.
And this is the case in many sectors.

Therefore: Use digital leadership to make your company fit for times of change!

Stefan has found his way as a publisher, but the transition to a modern, digital company was not easy for him. He stuck to the tried and tested for too long and only just managed to get his act together.

Corona and digital leadership

Whether we wanted to or not, the pandemic has pushed us all towards digital leadership.
On the one hand, there was the unpredictable change: nobody had any idea what the situation would be like in four weeks’ time. Planning was not possible. At least not for longer than 14 days. Many had to come up with alternative concepts. On the other hand, many things suddenly only worked digitally. Meetings, for example, or workshops. Where previously there had been a lot of digital fiddling, now there was suddenly action. There was no other way!
And now we can see that it works – that digital forms of working are not as difficult and inconvenient as we initially assumed; that we can save time, money and CO2.

Corona has shown us that our country is a developing country when it comes to digitalization: many companies are not geared towards their employees working from home or communicating via video conferencing . And some employees simply don’t have enough network to take part in online meetings…

It’s the same at Fischer Automobile: the service staff are of course on site, but Rolf is seeing less and less of the sales staff with their laptops; they are working from home more often. He doesn’t yet know what to make of it. Somehow it works. Most employees in administration, on the other hand, are tied to the company due to their somewhat older fixed computers. There has already been a small uprising here: colleagues have demanded new equipment with laptops. Is that really necessary?

Site manager Uwe, 55, sees no need for this either. “Where do they want to go with their laptops? – Their workplace is here.” Uwe is the old school. It is “never change a running system” made flesh. That’s how he learned, that’s how he did it, that’s how it worked – what’s the point of making fisimatums now?
However, a lot of things were left undone during the lockdown because employees were not equipped well enough at home. For others, everything went well. He has to admit that. They also worked well from home.

What consequences must companies draw in the face of digitalization?

Of course, digitalization doesn’t just mean that management has to reposition itself; no, the entire company has to adapt! What are the most important points that companies need to work on in the course of digitalization?

1. become fast!

If the world is suddenly getting faster – then of course your company has to get faster too! Companies need to create structures that enable them to react immediately to customer requirements and launch new products and topics on the market more quickly. – Overall, companies need to make quicker decisions and become more agile.

2. become flexible!

You have made a decision, a project is taking a very clear direction and suddenly you realize that the direction is no longer right? React! A change in circumstances requires a change in the defined course. Once you have decided something, be flexible enough to be able to throw it over again!

3. become more customer-oriented!

Get the information about what customers want, what they need. Make sure you notice changes quickly so that you can change direction if necessary. Be close to the customer!

Rolf can subscribe to these goals. Fast, flexible, customer-oriented – that sounds good. That’s how it should work in the company! Unfortunately, it doesn’t help if Rolf emails his employees with the good news “Please be fast, flexible and customer-oriented!” or shouts across the corridor or down the hall.

Step 1: Rolf first has to see where his company stands in this respect.

From classic leadership to digital leadership:
How is digitalization changing the nature of leadership?

The past of leadership: hierarchy

Previously, management was relatively hierarchical: Decisions were made at the top and the subordinates had to implement them exactly, which in turn was controlled by the managers. The employees only carried out small work steps and had no overview of the entire development process.
This top-down management was largely shaped by Taylor , who laid the foundation for assembly line work. This way of working is not wrong per se, as it was extremely successful at the time.
Today, however, you are quickly out of the picture.

The presence of leadership: speed

Today, it is no longer the case that managers know what is needed most quickly and make the best decisions based on this knowledge. It is much more the case at the moment that the people who deal with customers on a daily basis and have a nose for the market are much quicker to realize what is currently in phase and which decision is currently the best. Nevertheless, employees often have to clarify decisions across several hierarchical levels first. And that takes time. Not a good scenario when the customer stands in front of you and insists on an immediate solution…
Employees need to be able to react quickly!

The future of leadership: decision-making authority

We need processes and structures that enable decisions to be made where they are needed and where they can be made most quickly. This is usually with the employee near the customer. It doesn’t matter what it’s about:
For example, decisions can be made directly on the construction site as to how something is actually implemented – by the person who is currently holding the relevant part. Of course, this is not to say that there is no longer a grand plan; it is still needed. Because doing without architects and engineers when building a house would very quickly take its toll… But if, for example, a storm is approaching and a decision has to be made immediately, then the people on site should be allowed to decide. And in a team, because this is the most reliable way to gather all the necessary information.

Will we still need leadership in the future?

Yes, wait a minute – but if the manager no longer delegates, decides and controls, what does he or she actually do? Do you still need a guided tour?
– Of course it needs them! But this leadership must change fundamentally. And that’s where digital leadership comes into play….

Rolf’s company also used to be managed top down. And many people actually seemed to like it. Uwe and most of the managers anyway, but also many of the employees. They were happy to know exactly what to do.
Self-organization many in the company don’t want to. Rolf suspects the older people in particular. Marianne, 53, from the scheduling department said recently: “I’m not paid for responsibility. The bosses have been doing this since I joined the company over 20 years ago. Why should I do that now? I don’t see it at all. Just tell me what to do and I’ll do it.”

But even Marianne has points where she would like to make a quick decision instead of asking the boss first: for 15 years, she has been organizing the catering for a customer event that takes place every summer at her largest location. She has been ordering catering for 15 years. She knows what the customers like to eat, approximately how much per person needs to be calculated, where the garlands will hang, how to talk to the caterer so that special requests can be implemented… Nevertheless, Rolf expects her to discuss the catering in detail with him every year, agree on the price and then have the final offer approved by him again. If the caterer can’t deliver something, she has to repeat the whole process with an alternative offer. Although this is unnecessary and inconvenient, it wouldn’t be a problem if Rolf always had time. But he didn’t. He is also often out and about in the other dealerships. Marianne often chases after Rolf, catching him on the phone, in a customer meeting or on the go. Meanwhile, the offer rests untouched on Rolf’s To Do pile. The caterer, who also has to plan, calls Marianne every day – and she takes up the chase again. Rolf keeps everyone involved on their toes without even realizing it. Marianne could also make good use of her working hours. She feels more stupid every year.

When Rolf asks Marianne what she would change, he realizes for the first time what this process means for Marianne. As he retires to his office with a thought-provoking coffee, he ponders: “I wonder how many more topics of this kind there are?” He suspects that he has blind spots and is probably not the only manager in the company who unsuspectingly squanders working time and nerves. There are certainly processes in which employees would like to make more decisions and certainly also some in which they would be reluctant to take responsibility. “Uiuiui, renovating these structures is going to be quite a ride,” suspects Rolf… And he’s still not sure whether he really wants to do it at all. Then he would no longer have any control.

But it is becoming increasingly clear to him that mere openness to the topic of digital leadership is not enough: he has to act! But how does he go about it now? Where are his construction sites? And what specifically can he do differently? What skills does he need, do his managers need for digital leadership?

What skills does digital leadership need?

We have seen it: Leadership as we knew it has become obsolete. Today, there is no longer a need for the traditional manager who provides disciplinary and technical leadership. Nowadays, leadership can also be a function that a person takes on without being a manager. What does a person who wants to be in such a position need?

Personal requirements for digital leadership

Digital leadership needs openness

There are different personalities:

1. the structured

This person likes to have a planned, structured day. She works out her plan in relative detail and already knows exactly what she will be doing on the same day at 3 p.m. in a year’s time. If someone comes along and wants to change the plan – and thus undo all the planning work – she reacts with corresponding annoyance.

Marianne has planned her life. She always arrives on time, has already booked next year’s vacation and is all in all very organized. There’s a big clean at home on Saturdays, playing cards with friends on Tuesdays, everything is very routine. This is interrupted at most by the annual village festivals, which are already firmly established in the calendar.
She likes it quiet at work. Of course, she also works overtime as a matter of course. You can always hear her sigh when she has to do something differently than usual.

2. the optional

Other people are enthusiastically optional. In other words, they look at the possibilities of the moment and then decide. If they have a plan at all, they will abandon it at the latest when a better option presents itself. They are guided by what is brought to them from outside.

Laura is more of a spontaneous traveler. She quickly finds fixed routines boring. She doesn’t even plan ahead for the weekend, but prefers to see what she feels like doing spontaneously and who joins in. “Let’s see,” she usually says at the end of her voice messages with friends. She keeps arriving at the company at different times “because there was still something to do”. She constantly has something new on her plate and is very enthusiastic: apps, diets, events. Boredom would be the worst thing for them. In this respect, she is happy when new challenges come her way at the company.

And you?
If you have to adapt quickly to new situations as a manager, you naturally need a certain degree of openness, an interest in the unknown and the courage to try out new things. Yes – and the ability to let your plans slip…

Digital leadership needs balance

So openness is always better? Yes and no.
Openness is indeed THE basic ingredient for digital leadership. But: without structure and stability, you won’t get very far in leadership.
Of course you need a goal and a plan, the question is: how long are you planning for and how detailed is your plan? Nowadays, the periods of time that you can plan and work through are getting shorter and shorter. Planning for a whole year no longer works.
Take a sprint within the agile project management framework Scrum as an example.

This is a two- to four-week phase in which you concentrate on working through what you have planned. And there will be no deviation from this short-haul plan. Afterwards, the work done is evaluated, the current situation is taken into account and plans are made for the next period.
Remember the early days of the pandemic: nobody knew what would happen next, what external events would occur. For this reason, planning was carried out at two-week intervals and the current circumstances were taken into account in each case.

Digital leadership needs an agile mindset

As a digital manager, you need a corresponding mindset: you have to be extremely relaxed. Because if a check reveals that everything is suddenly different to what you previously assumed, then you have to be able to simply throw away all your brilliant plans: adapt to the new circumstances without resentment and run in the next direction. This ability to let go is not so easy!
You need a mindset that welcomes the new situation instead of rolling your eyes in annoyance. Ideally, you find it exciting and stimulating to find solutions and manage to convey to your team with this ease that the conditions have changed.
You simply allow yourself and your team to try it out. When a new idea arises, you are open to it at first: “Great! A new idea!”
This attitude is something that many managers still need to work on.

Speaking of an agile mindset: we have described what this is and how you can get there in an article:
Agile Mindset – What is an agile mindset & why is it so important?

Digital leadership needs servant leadership

We’ve already talked about it: the top manager sits at the top and a pyramid of managers and employees opens up below her. Let’s keep the triangular image of this pyramid and turn it upside down.
We now have a broad base at the top. They work with customers and therefore have the freshest information about what is currently needed. Managers provide infrastructure and tools, facilitate communication, remove obstacles; in other words, they do everything they can to enable employees to do a good job. Management sets the framework within which work is carried out in line with the vision.
What kind of frame is this?

Digital leadership needs values and guidelines

Guidelines are needed to prevent everyone running around haphazardly. Guidelines are based on values.

If a core value of your company is goodwill, then your employees will be accommodating to the customer. However, if one of the company’s values is cost orientation, in plain language: saving money, then goodwill is not the order of the day. If there are clear guidelines in your company, people will know which direction to take when making quick decisions and will be better able to assess the situation in the interests of the company.

So if Marianne knows that she can be accommodating towards the customer, then she no longer needs to bombard Uwe with questions, but can help customer Sonja directly.

Digital leadership needs: Taking a step back

Now comes something that many managers find difficult: taking a step back…
What kind of people hold management positions? – People who find it easy to make decisions; who make clear announcements, who are good at controlling. Mostly people who knew how to take the floor in crucial situations and had a high speaking rate, because of which they were seen – and thus gained a leadership role.

The challenge:

These qualities are no longer the most important when exercising a leadership role. On the contrary – they can even be harmful.

When you set the tone among your employees,
you contribute your own ideas more quickly and consider them to be more correct;
if you prefer to decide quickly rather than ask around and
if you react harshly to errors and deviations,

then your employees will hold back from finding their own solutions and acting on their own responsibility.
Of course, the people in your team won’t say anything if you assert yourself as a leader. Who wants trouble with the boss? But what’s the point? You are conditioning your team to possibly not tell you what the biggest problem areas are, to hold back ideas for solutions, to not even try to solve a problem. You’re alone with the problem… Not so great, is it?

Digital leadership needs a paradigm shift

Admittedly: It is quite a comprehensive change.

Or as site manager Uwe puts it: “What? Suddenly everything that was normal and worked in management is harmful? And all those years of experience as a manager are no longer worth anything?”

No.
It’s about rethinking and continuing to be creative as a manager. Only the orientation changes:
Your goal as a digital manager is to create a structure that gives people the opportunity to act independently and to create a corporate culture that motivates the team to be self-reliant.
Sounds good, doesn’t it?

So: let your employees think and decide for themselves and hold back, even if you personally would have approached it differently!

How does digital leadership work?

Task 1 in digital leadership:
Put yourself in the position of being able to accompany Change!

Digital leadership means that you deal with change in a positive and constructive way. And what’s more: as a manager, you should be able to manage change.
In the past, external change managers and moderators were hired for this purpose. We, for example. But managers now do a lot of things themselves. And that’s a good thing! Our job profile has changed as a result: Our job today is more about teaching managers how to manage change.

We have written a detailed article on the topic of change managers and what they need to be able to do Change Manager Definition & Tips: How to lead change successfully!

Here is the short version

Accompanying change what does that mean for you?

You can empathize with what it does to people when they experience change.
You know which type of communication is needed at which point.
You provide timely and clear information.
You can deal with the fact that people often initially resist change.
You manage to involve others to find new solutions; you let them contribute their own ideas.
You allow trial and error; you give people the opportunity to try things out – and also to fail, without negative comments or sanctions.
You manage to encourage the team; to make them want to try out new things.
You treat people with respect! This is one of your most important skills.

Manager Uwe is not convinced: “It’s all well and good with this new leadership, but somehow he thinks it’s chi chi. Why should he now suddenly empathize with what triggers change in Marianne’s psyche? Should he hand out tissues now? The business world is not a concert of wishes.
And somehow it also annoys him that a brat like Denis suddenly wants to have a say and even questions the professional experience Uwe has gained in over 30 years.
Why should he let Laura try something umpteen times when he would know how to do it better straight away? That’s a waste of time! And why should he play the entertainer when the people are paid enough? He couldn’t care less whether people are in a good mood at work. He is only interested in whether the work is done in the end.

Jutta, on the other hand, finds this exciting. She once did a short seminar on the subject of change. That was a long time ago and it wasn’t that informative. But she remembers liking the approach very much. As an HR manager, she gets on well with the people in the company anyway and can assess who is best to approach and how. If there’s anything wrong, her colleagues are happy to come to her. They know that Jutta is committed to them and to creating optimal working conditions. She sees the requirement to be able to accompany Change as a natural continuation of what she is already doing.
She is keen to continue learning.

Task 2 in digital leadership:
Be a moderator instead of an announcer: promote co-creation!

So far, has it been your job to push through announcements from above or implement your own ideas? Because so far everything good has come from above? Change of plan: The aim now is to incorporate employees’ ideas.

What kind of leadership do you need now?

Ask yourself:

How do you manage to motivate your employees?
How do you stimulate their creativity?
How do you manage not to offend them when they are being creative and trying things out?

Process instead of content
You are now responsible for the processes and less for the content. You need moderation skills. You should get yourself a skillset for this:

How do I moderate a retrospective?
How do I moderate a co-creation session?
How do I moderate innovation work?

These are just a few examples, there are many more formats that can help you with moderation.

Jutta throws herself into the moderation. She is particularly fond of agile formats such as Scrum or Design Thinking. She asks Rolf for further training in these formats. Rolf is delighted with this response and gladly agrees. He asks Jutta to identify who else in the company might be interested. Jutta puts together a list for him. He is amazed at how many employees are keen to get to grips with new formats. Instead of sending Jutta and her colleagues away to study, he asks us to hold seminars at his company. We tailor the content to the needs of companies and people and provide moderation and creative formats. They are well attended. We teach the workforce to continue using the moderation formats, innovation tools, etc. themselves later on, because we as a consulting firm like to make ourselves superfluous.

Task 3 in digital leadership:
Create a feedback culture and a constructive error culture through appreciation!

Feedback is a powerful tool! It enables you and your team to improve. Both on a factual and personal level.

The factual level:
Has our performance been successful? What works? What should we optimize? How?
The personal level:
How do we work together? What is going well? What is not going so well? What do we need in our dealings with each other?

We have also written a comprehensive article for you on the subject of feedback. There you will find detailed information on when and how you should give feedback, what you should avoid and so on: Giving feedback: the 10 golden rules for constructive feedback
We recommend regular retrospectives: The retrospective is a format with which a team can give itself regular feedback.

That annoys Uwe. He’s been the site manager for so long and now he’s supposed to hold seminars with everyone he’s been managing for years. Going to school at his age? He wonders why. So far, he has simply said when something hasn’t gone well. And that’s roughly what he knows with this feedback. He sits with his arms folded in our workshop. He doesn’t like the fact that he’s now supposed to get feedback, but he acts as if it’s totally ok and has been the norm for years anyway.

Establish regular feedback rounds!

In the beginning, we usually find it difficult to express ourselves openly and appreciatively. The good news is that the more often feedback is given and taken, the easier it becomes. Your task as a manager is to facilitate regular feedback sessions. You don’t necessarily have to moderate them yourself; it’s enough if you enable your team to do so.

Put others at the center – not yourself!

The personality of the manager is also required when it comes to feedback: instead of focusing on yourself, look after your employees! Be emphatic! Find out what they need!
If you’re someone who has a hard time dealing with feedback, you’re likely to get cranky when criticized. Understandable, but: take a step back! Because if you give free rein to your resentment, the people around you will no longer want to give you honest feedback. Remember: accepting feedback is also part of it. Feedback gives you different perspectives and allows you to improve the way you work. And whether or not you can accept feedback as a manager plays a key role in whether you succeed in establishing a positive feedback culture.

Welcome mistakes as part of the process!

If you see mistakes as something bad and you comment negatively on or even sanction the failures of people in your team, they will become afraid of making mistakes. And of course they will do everything they can to conceal mistakes. This prevents an open feedback culture from developing.
In addition, employees will try not to make any mistakes in the first place by simply not trying anything new. After all, experiments can go wrong. However, this also reduces the willingness to innovate.
There is also an extensive article on the subject of error culture: Error culture before error management! How your company learns from mistakes

Show your appreciation!

No question: managers should always treat their employees with respect! In today’s culture, this has become even more important. Because your appreciation signals to your team that they can try things out, make mistakes and still be valued.
People who don’t feel valued or respected often feel insecure and don’t dare to try things out and be creative. If people are respected, they sometimes leave the beaten track, dare to try something new and create something new. That’s why appreciation is so important!

Uwe is amazed. This feedback wasn’t that bad. On the contrary: he has realized a few things that he wants to do better. He is pleased that he has also received good feedback. He had feared that the last judgment would be passed on him. But now he feels he understands his people better. And he also feels seen. Admittedly, he had to control himself at the beginning and stifle a few comments. But once he has understood, for example, what drives Laura and what an asset she is in areas he is not at all familiar with, he manages to hold back.
He doesn’t suddenly think it’s all great with this digital leadership – but he’s at least willing to take a look at it first.

We have made a program on appreciation and closeness during the Corona period, which can also be transferred quite well to the home office times after Corona:

Task 4 in digital leadership:
Bring inspiration and creativity to your company!

Inspiration and creativity mean creating something new, i.e. leaving old paths behind. As a manager, you should ask yourself the following questions:

What can get us out of our usual rut?
How do we manage to open ourselves up to new and different things?
What experience does my team need to get to know new aspects?
What can inspire my team?
How do we gain experience from other companies, sectors and contexts?
And: How do I put my team together?

Ensure diversity!

Diversity helps us to be creative and consider a wide range of possibilities. This doesn’t just mean men and women, but people of all kinds. So bring people from other cultures into your team, people who live in different situations, young, old, career changers, people with disabilities – because that’s how you bring other ways of thinking on board. Set up a heterogeneous team and mix up as many perspectives as possible, as this will put you in the best position for new challenges.

Jutta keeps her eyes open. There are vacancies in the company. It now awards jobs with the same qualifications to people who are not yet or only very slightly represented in the company demographically. They are joined by a few colleagues with international-sounding names. This seems difficult at first. But as soon as there are several people working in the company who do not correspond to the previous employee selection, this subsides. They are even proud to have people from all walks of life with them.

Our video on diversity in the company:

Task 5 in digital leadership:
Dealing with Generation Z

People often talk about Generation Z these days. Why is it suddenly so important? There have always been young people.
When it comes to digitalization, Generation Z has a head start on older generations: they are digital natives, i.e. people who have grown up with digital conditions and for whom the digital environment is completely natural.

An example from Susanne’s life:

“My sons preferred to sit in front of the box when they were young. I didn’t like it because I compared it to watching TV all the time. But once I took a closer look, I realized that they were playing with a team that was spread all over the world. They spoke English and chatted about all sorts of things on the side. A fellow player, a physics student from Canada, helped my son with his difficulties in physics lessons. The players in the team were not only international, but also very diverse in terms of age: the oldest was in his fifties, the youngest just eleven. For the players, dealing with the rapid development of such a game was completely normal. It was also part of their daily routine to create something together.”

These are all things that older people often struggle with, whereas Generation Z – and to some extent Generation Y – take to them like a fish to water.

We have made a video on the subject of generations:

Trainees often know more

It is clear that young people have a big head start when it comes to digitalization. It’s no longer the case that trainees come into the company knowing the least. Apprentices used to have to shut up, listen and slowly work their way up the pecking order.
Today, the older semesters can learn something from the younger ones. The latter are therefore a significant enrichment. But only if you are open to them and accept them as they are. And yes, the younger generations are different than the older generations were at their age. So what?

Other values among the younger generations

Up to now, each generation has blasphemed about the next. As early as 3000 BC, Sumerians complained on a clay tablet that the youth of today did not respect old age, was unkempt and rebellious, unwilling to learn and did not accept existing values. This kind of complaining to subsequent generations has remained with us over the past 5,000 years. Such statements are documented from every age. What do we learn from this? That criticism of youth is a completely normal sign of ageing and that the world has not come to an end in the last 5,000 years, despite many announcements, but has simply moved on.

We give you an overview of the generations in this article:
Generation Y, Generation X, Generation Z – Definition & Overview

Generation Z

People are upset about Generation Z because they have different values. Topics such as diligence, discipline, order and structure are no longer a priority for Generation Z. When working time is over, you just go home – regardless of whether the task has been completed or not.
Amassing money is also seen as less important. Someone from Generation Z also likes to save up working time to take a sabbatical because freedom is more important to them than having a lot of money. This is often difficult for the baby boomer generation to understand.
Their casual manners are also often interpreted as disrespectful, whereas younger people perceive formal manners as cold and distant. So who is right?

Marketing junior Laura gets upset. Sometimes she has the feeling that older people like Marianne are playing games: People are supposed to be saluted, some things aren’t supposed to be said at all – the unwritten rules just don’t make sense to Laura. Isn’t it about the company doing a good job? And shouldn’t you just speak up if you notice that things aren’t going well in any area? Why not? What’s all the fuss about?

Customization

None of the generations is better or worse; they are just often based on different values. Generation Z also brings qualities that the older generations do not have. Isn’t it obvious to make use of these qualities? Perhaps their way of living, dealing with each other and so on is better suited to coping in the new era? How can the perspective and experience of the younger generation be used to enrich the entire team? Why should the younger generation adapt? – Wouldn’t it be better to approach each other? – At eye level?

Working student Denis has also been more or less discreetly informed that his sagging jeans and sneakers don’t quite fit in with the company image. This came from Uwe, of all people, who wears ties but really has no idea about computers. And now Denis is supposed to explain to him how social media works. Well – certainly not with a tie…
At first, neither of them feels comfortable sitting in front of the computer together. Uwe is on Deni’s turf. He worries a little about whether there will be power struggles. But Denis, who is still a little grumpy and reserved at first, is ultimately very relaxed and even enjoys showing Uwe around digitally. Uwe is delighted and makes coffee for both of them. That’s saying something. The next day he brings chocolate.
Both nod gracefully to each other.

Task 6 in digital leadership: leading virtual teams

Before coronavirus, there was a tough struggle in Rolf’s company when it came to working from home. Some employees were keen to work from outside the company. “Yes,” Rolf always said, “you have to start. At some point.”
But how can you control your employees? On site you know whether they’ve served their time, but at home – who knows what they’ll do….
The reluctance was always noticeable, even well-functioning examples from other companies could not convince Rolf or Uwe.
A potential new employee of a younger age canceled after hearing about the attendance requirement. This is no longer in keeping with the times, she said. Well then!
The pandemic has simply made short work of it. Suddenly working from home is completely normal. Most people are happy about that. But: this results in completely different challenges for management.

Learn to moderate online!

As a manager, you need to be able to lead well in a virtual context. If you try to pull off your usual routine and hold meetings where one person talks and the rest have to listen, your audience will quickly fold away. You have to learn to moderate well! – Especially in the virtual space, it is much more challenging to involve everyone in active cooperation.
We have written an article on this topic:

8 tips on how to make virtual collaboration fun!

Use tools!

If you have a meeting of three or four people, it’s relatively easy to organize. If there are more than six participants, then you really need to moderate. Use tools such as interactive whiteboards on which you can work on and visualize something together or break-out sessions in which everyone gets a chance to speak. Get an overview of tools and options.
And clear your throat…yes, we wrote an article about that too:
Zoom Meeting & video conferencing: How it works, alternatives, tips

Trust and connection

When you work with someone who is in the same room, you establish a completely different interpersonal connection than if you only see their head in a Zoom tile or hear their voice on the phone. Connection and trust are extremely important when working together! Think about which mechanisms and interventions you can use to stay in good human contact with your people online:

What conversations are you having? How often? In what quality?
What team meetings do you organize to keep the team connected?
How do you establish a sense of unity?

Rolf is struggling. He had to hold his first Zoom meetings during the lockdown. That was very tough for all sides. When he wanted to pass the buck to Uwe, he got out of the affair by getting Jutta and Denis on board. That worked quite well. The two then held an online seminar for the managers, which helped them significantly with digital communication.
Virtual or hybrid meetings have now become completely normal.

How to collaborate online?

What is good leadership?

Leadership is not a function; it is a skill and anyone can do it!

How it used to be

In the past, you were promoted to manager and once you were a manager, you stayed one and ideally kept climbing the management ladder. Managers had more power, their decisions weighed more heavily, people had respect for them. And to make sure everyone knew who was an executive, the executive had the bigger car, the bigger desk, the better view, the parking lot closer to the house and the bigger wallet. This is no longer in keeping with the times.

Digital leadership using Google as an example

At Google, the decision was made years ago to establish a completely different (management) culture: Managers cannot be recognized; they are not decorated with special status symbols.
In any case, nobody has a permanent management position here. Leadership is handled flexibly at Google: you can be the manager in one project and in the next project you are an employee. You have the competence to take the lead and sometimes you use it, but sometimes you don’t.
The trappings of power that companies often bestow on executives – such as luxurious company cars or their own office – are not available at Google. Google is committed to doing something good for everyone and offers every employee high-quality food in the free company canteen. And Google doesn’t let itself get carried away: there’s freshly squeezed fruit juice and the finest food. Plus fitness rooms, massages, disco balls…

Hierarchies

Hierarchies are flattened in modern management. There are reasons for this. We have noticed that hierarchies are not necessarily productive: They often terrify employees, deprive them of decision-making powers and ensure that people do not feel responsible because someone else is in charge. If a manager lives out their power, this can lead to a culture of fear. Employees are inhibited by fear of mistakes, punishments, harsh criticism and power games. They prefer to keep their creativity and ideas to themselves. Hierarchies, as they used to be practiced in companies, are rather counterproductive in today’s corporate world. What functions does good leadership still need?

Management functions

At EnBW, teams are put together in a diverse way. This means that the management function is distributed among several people:

1. specialist management

A specialist manager supervises the employees in their specialist area. The financial person has a financial manager, the draftsperson a graphics manager and the planner a planning manager. The specialist management ensures that professional quality standards are adhered to, that specialist processes are made more efficient and that professional development takes place.

2. personal leadership

Personal management is the personal point of contact for employees. She keeps an eye on people’s careers, looks at what they need to do well in the company and makes sure that everyone gets vacation when they need it.

3. process owners

The person responsible for the process moderates the respective process. She ensures that cooperation within the team runs smoothly, that communication works and that conflicts are resolved. She moderates, removes obstacles and ensures that the collaboration methodology (such as Scrum) is put into practice.

4. strategic management

Strategic management ensures that the strategic direction is right: Where do we want to go? In which direction do we need to move? What projects are needed? What development steps are needed?

Split management

The four different types of management are divided between four different people. This ensures that attention is paid to all important management tasks. At the same time, hierarchies are flattening as a result. No one is subordinate to just one person any more and is at the mercy of that person for better or worse. Employees are committed to team performance.

A split leadership is also emerging at Fischer’s car dealerships. Despite initial skepticism, everyone is happy because working together becomes easier.
Technical skills are obvious, so Denis is delighted to be a leader in IT. While he had initially considered looking for another employer, he now bears his new responsibility with pride and really throws himself into it. Laura, who is responsible for social media communication, now also feels seen and valued.
Uwe remains site manager. He learns to let the others do it. And somehow it also relaxes him not to have to hold all the strings in his hand any more.
It was immediately clear to everyone that the personal lead would go to Jutta. In principle, she has always done that.
The team takes turns with process responsibility. Marianne, however, is not in the mood. But she is incredibly good at supporting process owners in removing obstacles.
Rolf withdraws into strategic responsibility and involves managers like Uwe. He also seeks advice from employees. He is relieved that he can finally devote himself to what he really wants to do: move the company forward. And have time to play golf with my buddy Stefan.
Life can be so simple.

Digital management models

We are often asked whether digital management models exist. The answer is: Yes and no. There is no specific leadership model called “digital leadership”, but there are various approaches to how digital leadership can be practiced, as we have just seen at EnBW, for example.

VACC

Another approach comes from McKinsey. It is called VACC. In 2019, McKinsey published the text “The new roles of leaders in 21st century organizations”. In it, they define profit maximization for shareholders as the goal of traditional management. They refer to the roles that serve this goal as planner, director and controller. The planner develops the strategy and creates a plan from it. The director is responsible and the controller checks that all specifications are adhered to.

According to McKinsey, the goals have changed: nowadays it is important to create value for all steakholders. And not only for them, but also for customers, employees, partners and society. Everyone should get something good out of it.
As a berlin team, we call this win-win-win attitude WELUTIONS.
In order to achieve this goal, managers today have to be able to take on several roles – and McKinsey calls this VACC.

What is VACC?

VACC is an acronym and consists of the English words

visionary,
architect,
catalyst,
coach.

These are the roles or competencies that a modern manager should have, according to McKinsey.

Visionary

Visionaries contribute the long-term vision, provide the vision as a north star, as orientation and manage to ignite enthusiasm for this vision inside and outside the company. But they don’t sit in a quiet office in front of a blank sheet of paper and wait until a vision pops into their head. No, they talk to people in and around the company, integrate different perspectives, suggest ideas and get to the heart of the shared vision.

Architect

Architects provide structure. They define roles and functions so that the team can work smoothly; they structure processes and create framework conditions.
However, they do not issue inflexible sets of rules and irrevocable processes, but design the organization in such a way that the company remains open and employees are empowered. The people in the company should be able to adapt to circumstances and plan and execute accordingly. The basic principle here is constant openness to optimizing products, processes and communication in line with the vision.

Catalyst

Catalysts are responsible for networks, communication, energy and inspiration. They get people moving and provide the basics. It’s not about Chaka Chaka and rousing speeches. McKinsey identifies four areas:

Clearing obstacles out of the way,
Create connections throughout the organization,
show people how they can work towards the vision and
to create a corporate culture in which employees can give their best authentically, openly and full of energy.

Coach

We are there for people, supporting them both professionally and personally. They help with career development and the development of new skills.
It’s not about granting the occasional educational leave. Rather, coaches are responsible for ensuring that employees think increasingly entrepreneurially and strategically, develop their teamwork skills and acquire new skills, knowledge and mindsets.
It is their responsibility to ensure that the company becomes a learning organization. This also includes providing an environment in which people can experiment and then evaluate what went well and how something can be improved. They leave room for many perspectives and possibilities.

So much for McKinsey’s view of digital leadership. Here, too, leadership is being divided up: several people are taking on the various functions that were previously held by a single person.

Lateral guidance

There are several management models that go in this direction. Scrum would be another example. What they all have in common is that they moderate rather than announce; that they do not function hierarchically, but support. This new type of supportive leadership is called servant leadership or lateral leadership, i.e. leadership without power. We have – you guessed it – written an article about this:Lateral leadership – tips for leadership without power

Conclusion

Digital leadership pays off: quick reactions, flexibility and the ability to innovate put your company in a good position to deal with change. The culture in your company improves so that your employees are more motivated, take on more responsibility and come up with more solutions to challenges. All this pays off.
Try it out.

Or give us a call – we know how to do it. 🙂