Digitalization & Leadership

Digitalization is one of the dominant megatrends of our time, which is having a profound impact on economic structures and drastically changing the way we live together in our society. Digital transformation and digital processes are not only influencing technological innovations but are also changing the way companies develop and implement strategies. Above all, the digital transformation requires solutions for data infrastructure, digital networking and ultimately digital sovereignty in order to remain successful in a competitive environment.

In this respect, digitalization has brought about a fundamental change in corporate management in particular. Whereas the focus used to be on operational efficiency and cost control, today it's about integrating digital technologies into business models, transforming analogue processes, optimizing workflows and expanding digital networks. Companies that successfully master the digital transformation can not only increase their (cost) efficiency, but also tap into new markets and stand their ground against competitors. The integration of digital strategies into top management is no longer an option, but a necessity.

A central element of digital transformation is the handling of big data. The ability to collect and analyze large amounts of data and gain valuable insights from it has the potential to fundamentally optimize business processes and break up old structures. The complexity and variety of data not only enables companies to gain in-depth insights into customer behavior, predict market trends and make product changes with the customer in mind, but also to make more informed and cost-efficient decisions - a distinct competitive advantage.

In this context, blockchain technology is also playing an increasingly important role. It enables data to be stored securely and transparently, which is particularly beneficial in data-intensive sectors such as finance and logistics. By combining big data and blockchain, companies can not only manage data better, but also ensure its integrity and security.

At the same time, the exponential increase in data volumes due to the Internet of Things (IoT), increasing networking and the integration of artificial intelligence (AI) is presenting managers with new challenges. Data must not only be analyzed, but also used strategically to make decisions. Developments such as Web 3.0, which rely on decentralized data management and more control by users, offer new opportunities here, especially regarding the security and use of data.

Forecasts by the IT analysis company IDC highlight the urgency of dealing with the developments surrounding big data: By 2035, the so-called yottabit age is set to begin, in which 2.1 yottabites (2100 zettabytes) of data will be produced worldwide. For comparison: in 2020, the global data volume was still 612 zettabytes.

The Importance of Artificial Intelligence for Digitalization

In order to survive on the market, companies are therefore faced with the task of restructuring themselves, digitizing business processes and making them more efficient, integrating new technologies and securing their future viability. Adapting the corporate culture and methods of working is just as crucial as introducing new technologies in order to meet the challenges of digital transformation. Success in digitalization requires rethinking existing processes and developing new, digitally supported models.

In addition to the valuable insights gained from big data and the use of digital tools, the use of artificial intelligence plays a key role. AI enables companies to automate processes efficiently, which not only leads to considerable cost savings, but also raises the quality of output to a new level. This dual benefit makes the use of AI a decisive factor for success in the digital transformation.

In the context of the far-reaching changes that digitalization is bringing to companies, the concept of "New Work" is becoming increasingly important as it succinctly describes changing ways of working. Hybrid and remote work models that use digital collaboration tools to effectively promote virtual collaboration are now firmly established. These developments are leading to a fundamental rethink in corporate culture: traditional hierarchies are being broken down and new, dynamic forms of communication and cooperation are emerging.

In the course of the digital transformation, a working environment in which flexibility, personal responsibility and a sense of purpose are central to New Work is taking center stage.

Flexibility in Work Organization

As part of New Work, digital tools enable employees to organize their working hours and locations flexibly. This flexibility not only increases productivity, but also improves the work-life balance. But technology alone is not enough: flexibility is not just about the "where" and "when" of work, but also about the "how". The right methods are crucial for agile working. Training in Design Thinking, Scrum or Kanban is essential to prepare employees for these new agile ways of working, both professionally and in terms of their mindset.

Promoting Personal Responsibility

Another key feature of New Work is the strengthening of personal responsibility. Whether working alone or in agile teams, employees are encouraged to make decisions autonomously as well as independently and to proactively shape their tasks, which in turn leads to greater motivation and commitment. Interdisciplinary agile teams offer the opportunity to actively contribute to problem-solving, whereby soft skills such as openness, focus and commitment are often required and encouraged in addition to personal specialist expertise.

Sense of Purpose through Work

Creating meaning plays a key role in the New Work philosophy. People are increasingly looking for a deeper meaning in their work and want to identify with the values and goals of their company. Digital tools that promote transparency and communication help to create this connection, which contributes to higher employee satisfaction and long-term loyalty.

The changes in the work environment, shaped by New Work and advancing digitalization, are not only creating innovative working models, but are also leading to far-reaching changes in corporate culture. Cultural transformation describes the dynamic process by which companies realign their values, norms and behaviors in order to meet new requirements. Employees expect more autonomy and freedom to help shape the company. At the same time, repetitive tasks are increasingly being automated, creating space for more creative and strategic activities.

This leads to a shift in roles and responsibilities and requires new, collegial leadership approaches. In this context, digital leadership means that managers become "enablers": they actively support the cultural transformation, promote new forms of collaboration, and focus on meaning and strengths in their teams. Executives must learn to operate in flexible structures and create trust in the process. The ability to promote an inclusive and supportive work environment will continue to be crucial for the success of companies in the future.

Technological Competence: A Must for Successful Digital Leaders

In order to lead successfully in this dynamic environment, technological expertise is essential. Digital leadership requires managers to be increasingly digitally competent in order to actively shape cultural transformation and operate in a highly competitive environment. They should not only be able to understand and apply digital technologies, but also have the ability to actively and effectively integrate these technologies into their strategic planning. This is the only way they can recognize and use the potential of big data, artificial intelligence and other technologies to optimize business models and work processes in the long term.

Leadership 4.0 in the Era of Digital First

In the era of "Digital First", it is not only crucial to use digital technologies as primary tools for business decisions and processes. Digital leadership means that managers internalize this mindset and adapt their strategies accordingly. This means not only promoting technological innovation, but also motivating their teams to take advantage of digital opportunities and continuously develop themselves further. Instilling a digital mindset that promotes flexibility and openness towards new technologies and ways of working plays a key role here.

From Change to Chance: Focus on Digital Literacy and Upskilling

It is also the task of a digital leader to ensure that employees have the necessary basic digital knowledge - i.e. digital literacy. This includes not only an understanding of digital tools and technologies, but also aspects such as cybersecurity, competent use of data, and critical thinking when dealing with generated data. Upskilling and reskilling are important measures to strengthen digital skills in companies and ensure that employees are well-prepared for the challenges of digital transformation.

Overall, the successful use of both digital technologies and digital leadership in a changing world of work requires not only specialist knowledge, but also a deep understanding of the impact of digitalization on corporate management. It is crucial that managers play an active role in shaping the digital transformation and create an inclusive and supportive working environment.

Find more on 10 skills that managers definitely need to master the digital transformation:

• Technological Affinity

• Agility and Flexibility

• Live Empowerment

• Open Communication

• Focus on Diversity and Inclusion

• Ethical Use of New Technologies

• Future-oriented Mindset

• Provide Room for Creativity

• Continuous Professional Development

• Give and Accept Feedback

Managers should have a deep understanding of digital tools. They must be able not only to use technologies, but also to recognize their potential for the company and apply them strategically. At the same time, it is important to change and shape the mindset of employees to actively utilize new programs and drive the digital transformation together.

2. Agility and Flexibility

In a dynamic business world, the ability to quickly adapt to change is essential. Managers must promote agile methods in their teams in order to be able to respond effectively to new challenges. They must actively support the cultural transformation, promote new forms of collaboration and focus their teams on a sense of purpose and strengths as well as the development of potential. Managers must learn to operate in flexible structures, create trust and encourage employees to act independently.

3. Live Empowerment

In the spirit of New Work, managers give their teams the opportunity to take responsibility and make decisions independently. Self-organization refers to a form of work in which the topic of leadership is no longer integrated into a hierarchical structure within the team. Managers empower their employees to structure their day-to-day work independently and make their own decisions. Such empowerment increases motivation and promotes a proactive corporate culture. Especially in times of digital transformation, such empowerment becomes a key strategy for agility and innovation, supported by a positive error culture.

4. Open Communication

Clear and transparent communication is essential to keep all team members informed and engaged. Managers should provide regular feedback and encourage dialog in order to strengthen collaboration. For lateral leadership in agile teams, a common understanding, e.g. with regard to negotiating forms of collaboration, accepting rules and agreeing on goals, and good and open communication, is essential. This is particularly crucial in change processes in order to reduce uncertainty and increase acceptance of change.

5. Focus on Diversity and Inclusion

A diverse workforce brings with it different perspectives and ideas. Digital leadership means actively creating an inclusive working environment in which all employees are heard and valued. Particularly in the digital transformation, diversity enables access to diverse perspectives and thus increases innovative strength.

6. Ethical Use of New Technologies

Ethical considerations are essential in the digital world. Digital leaders should ensure that technologies are used in accordance with the values of the company and focus on the individual rights of employees and data protection regulations; after all, these form the basis for inclusive, sustainable and responsible innovation, strengthen trust in new technologies and can also counteract the uncontrolled use of digital tools and the problems that may arise from this.

7. Future-Oriented Mindset

However, the use of new technologies alone will not lead to success if employees cling to old paradigms. Successful digital leaders promote a future-oriented mindset in their teams. They not only develop a clear vision for digital transformation, but also create a corporate culture that supports room for self-development, innovation and openness to change.

8. Provide Room for Creativity

In order to increase creativity in the team, managers should create space for new ideas and promote a culture of trial and error. Mistakes should be seen as learning opportunities. Working in agile teams in particular offers a valuable prerequisite for creative freedom. Cross-departmental teamwork, flexible working arrangements and a new learning culture enable employees to contribute not only professional knowledge, but also personal skills and experience.

9. Continuous Professional Development

In a rapidly changing digital landscape, lifelong learning is of crucial importance. This is not just about professional development, but also about soft skills. Good digital leadership requires that managers not only continuously train themselves and their teams professionally, but also pay attention to personal learning processes in order to be able to face the diverse challenges of the future and remain competitive.

10. Give and Accept Feedback

An open feedback culture is crucial for continuous development, especially in times of digital transformation. Successful digital leaders regularly seek feedback and are willing to accept constructive feedback themselves. This allows mistakes to be recognized quickly, projects to be driven forward faster and trust to be strengthened.

In the following, we present three leadership styles that have proven to be particularly effective both in the context of digitalization and in terms of change management and support executives in successfully meeting the challenges of digital transformation:

1. Agile Leadership: A Felxible Management Approach

Agility is a key success factor for companies in the digital age. Agile leaders promote flexibility, rapid adaptability and iterative work processes. Decisions are made decentralized and teams work in a self-organized manner. Agile leaders take on a supportive role by acting as servant leaders and ensuring that their teams have the necessary resources and space to develop their personal potential in order to perform their tasks efficiently. They promote a culture of continuous improvement and learning, focusing on innovation and creativity, while keeping an eye on both communication and corporate culture.

2. Hybrid & Remote Leadership: Management at a Distance

AThe increasing use of remote and hybrid working also places new demands on managers. The challenge for remote leadership here is primarily to lead teams effectively even when they are not physically present, which brings new challenges for digital leaders.  This leadership style requires clear communication strategies and the ability to build trust and motivation via virtual channels. Remote leaders need to focus on regular and transparent communication to strengthen the sense of connectedness while promoting trust and autonomy to empower employees.

3. Data-Based Decision-Making

The evaluation of data will continue to play an increasingly important role in strategic decision-making in the future. Managers must ensure that both clearly defined and relevant data is collected, analyzed and incorporated into their strategic decisions based on legal requirements. This demands not only basic technical knowledge, but also a deep understanding of how data can be analyzed and used correctly to optimize business processes and predict future developments.

Digital Humanism as a Philosophy of Leadership Practice

The introduction of new technologies also raises ethical issues that leaders must address in today's digital world. It is crucial that digital technologies are used in accordance with the values and goals of the company. Digital humanism, which places people at the center of technological developments, plays a central role here. Managers must ensure that ethics and morals are also upheld when using artificial intelligence and other digital technologies in order to promote the common good and respect human rights and data protection.

In this increasingly disruptive environment, orientation towards a clear purpose and strong values is becoming more and more important. Managers who exemplify a strong vision and ethical principles not only create trust and loyalty among their employees, but also increase the attractiveness of their company - for talent and customers. A clearly defined purpose acts as a compass that provides direction even in uncertain times and facilitates well-founded decisions. By anchoring digital humanism with a clear foundation of values, managers can promote a positive corporate culture that focuses on both technological innovation and human needs.