8 leadership strengths to survive on the digital playing field of the future
As the global economy is increasingly moving into the digital world, European companies in particular are well advised to make sure their staff has the necessary digital expertise. But how can managers buckle up for the digital challenge? Helga Pattart-Drexler, Head of Executive Education at the WU Executive Academy, and Martin Giesswein, an internationally renowned digital leadership expert, have taken a close look at what makes managers real digital game changers and which eight leadership superpowers can make or break a company’s future in the digital playing field.
History has shown time and again that companies tend to underestimate the power of digitization. Martin Giesswein, an expert on this topic who wrote a book titled “Digitale Gamechanger,” knows this only too well: the former General Manager and Marketing Manager CEE at Nokia was on board of the ship of the cellphone manufacturer when it sank. “At that time, we read the markets wrong and misjudged the significance of digitization. As a result, we lost the match against our competitors Apple and Google, which were digitally fit already back then,” he recounts, adding: “It pains me to see that management boards are still committing the same mistakes today.” Today, he helps companies successfully and, what is very important to him, thoroughly implement digitization strategies. “Only a handful of European companies were digital leaders in the past 20 years. Most of them were digital followers, compared to the US or Asian countries,” Helga Pattart-Drexler, Head of Executive Education at the WU Executive Academy says. “Our companies are in desperate need of more digital know-how – and the best way to come by it is to work with so-called digital game changers in your own company.”
On a global level, the US-based tech giants Google, Amazon, Facebook, Apple, and Microsoft as well as Asian corporations such as Baidu, Alibaba, and Tencent are vying to become the number-one player in the world’s economy. So it’s high time for European companies and their managers to change the rules of the game. But what does it take to become a digital game changer?
“Some managers in industries that have experienced very little disruption have been spoiled by their past success; others are very open to trying out new business models. What’s important for all of them is to have a good grasp of the rules and models of the digital economy in order to have a real chance at winning the game,” Helga Pattart-Drexler says. Martin Giesswein also cautions against the arrogance of the successful: “A few years ago, everyone was convinced that a fintech such as N26 would never make it.” Today, the enterprise founded by two Austrians counts about 5 million customers and is considered the most valuable German fintech enterprise.
Helga Pattart-Drexler and Martin Giesswein have trained more than 1,000 executives in their digital leadership workshops so far.“Our goal is to bring managers up to speed as quickly as possible. By doing so, we upload a digital-economy update to the management hard drive, which they can use right away,” Giesswein explains. A large German enterprise is a good example that shows how effective this update is. In 2017, the two experts trained a manager of this company. “Today, he heads the spin-off of a start-up that offers data-based financial models via a platform,” Martin Giesswein says.
It really is no coincidence that topics such as data science, digital transformation, and blockchain are core components of many programs offered at the WU Executive Academy. The demand for these training offers is constantly on the rise.
“Upon closer inspection, most managers – exceptions proving the rule – can be divided into three groups,” Martin Giesswein says. “There are the ones who want autonomy but ignore alignment and carry out digitization in a very superficial way that only serves self-marketing purposes.” The real digital game changers and innovators “are still busy implementing their digitization strategies three years on.” The preventers refuse to step into the 21st century despite any help offered. And finally, the performers focus so exclusively on daily business that they end up neglecting innovation.
It depends on the industry and company size, but as a rule of thumb, companies need between five and 20 percent of digital game changers across the middle management to successfully implement a digitization strategy.
Halfway up a company’s hierarchy, there is the greatest potential to make an impact and implement measures. Of course, the top management has to back up the digital game changers because they will be facing headwinds.
“You spend years in your comfort zone, know how to keep your business going, and then, all of a sudden, you are told to do it all differently. Many people feel insulted because they perceive such changes like a devaluation of their old ways of working and leading,” Helga Pattart-Drexler explains. That’s why a receptive attitude and mindset towards novel business strategies and segments, new ways of working, and digital technologies prepare the ground on which to take the first steps. Trainings, e-learning, podcasts, meetings, and events on the topic can go a long way. Martin Giesswein’s advice is to “look at the current mindset in the company in online meetings and in-house workshops: where are we in terms of digitization and where do we want to be in five years’ time?” He also stresses that no more than three projects should be initiated per year in order not to overwhelm staff.
Executives need to be in the know when it comes to the global digital economy and the geopolitical state of affairs: Which platform businesses are currently the most successful players? What did they do in order to do so well? In which areas can we learn from them? Content on digital business models, data usage, platform logics, etc. “Apple, to name just one example, has established a closed ecosystem with its partners and competitors, through which consumers are fully surrounded and ‘trapped’ by various products and services. Leaving this digital ecosystem requires a great deal of money and effort,” Giesswein explains.
“In the workshops, we deal with the most impactful learnings of the 30 most successful digitization companies,” Martin Giesswein explains. “Participants closely engage with these blueprints for two to three days, after which they are able to adapt them to their own companies’ needs.” This minimizes risks taken, prevents mistakes, and increases the chance that the innovation will pay off.
Many companies wish they could incrementally check off certain milestones and thus be guaranteed to complete their digitization project by day X. “Unfortunately, it does not work that way,” Giesswein says. Digitization is too multi-dimensional and complex for such a simple approach. Digitization projects should span a maximum of three years and focus on developing several potential scenarios (which can have longer time horizons of ten to 20 years), for which the company can prepare.
“Digitization projects must be part of a company’s overall strategy and be supported and championed by the top management,” Helga Pattart-Drexler emphasizes. This is important because digitization is not a nice-to-have or something you will soon be able to stop thinking about. “Unfortunately, many companies pursue rather superficial digitization strategies,” Helga Pattart-Drexler laments, pointing out that building a new business model from scratch and further developing KPIs is anything but easy and requires time and continuous efforts. What certainly doesn’t work is a piecemeal approach with a bunch of digitization projects. “This runs the risk that a decision maker will cancel the whole project because the pilot phase did not produce results at a certain stage.” To make sure that the development stays attuned to the company’s needs, the implementation must be realized in iterative loops. The best way to do that is to analyze the digitization steps taken so far every twelve months and use the results as the starting point for planning and implementing the next steps. In other words: in order to look forward, you have to look back.
Communicating with staff in a transparent way and doing so continuously is no less essential. “The top management must leave no doubt that digitization is a number-one priority and ensure that it is implemented as a strategy across all business segments,” Giesswein says.
“Usually, the second year of a digitization initiative reveals whether the project is still fully backed by the top management,” Martin Giesswein shares. Often, a change of mind is triggered by the misguided zeal to always have the newest tool or apply the most recent approach, when in fact it’s sticking to a change that brings success: “It’s counterproductive to shift the focus and pick up new hypes and tools every year.”
“Not every prototype and not every minimum viable product will turn out a success,” Martin Giesswein warns. That’s simply not how innovation works; it always involves risk. Giesswein recommends that the focus be kept on the outcome if a project or product fails. “Look for reasons, not people to blame,” is his advice. Still, there are some mistakes that should be avoided in any case: “A lukewarm implementation of digitization – for instance appointing a Chief Digital Officer but doing nothing else to further digitization, willfully ignoring how data-driven today’s business is, and failing to properly understand digital business models – can only be called gross negligence. A digitization project realized in such a way is bound to fail,” Giesswein says.
You can learn how to become the Digital Game Changer in your company in the online program Digital Game Changer. For more information, please click here.