This was the question that the Thriving Through Digital group considered in a recent discussion. It was an interesting and wide ranging discussion touching on issues such as the role of experience in a changing environment, silo thinking from leaders that make organisational change difficult, an inability to change or worse, active protection of the past, which have provided incumbent leaders with their power and prestige and many other topics besides. In the end our answer to the question “does digital require a different style of leadership?” was yes and no. Let’s start with the no.
It isn’t “digital” per se that’s driving the need for a new or different style of leadership. What is driving the need for a new and different style of leadership is two more fundamental trends that digital contribute to but it is not the primary cause of.
The first trend is a move away from an “industrial” and product based economy to a post industrial and service based economy. This trend has been active for many decades. James Heskett and his colleagues from Harvard wrote about the implications of this trend in the 1990s. Their issue was that while we knew what made a great product company we didn’t understand what made a great service company. They saw this as an issue and proposed a series of propositions to explain what they believed made a great services company (You can find their work here – Putting the Service Profit Chain to Work). These propositions have been broadly supported through subsequent research and perhaps represents some of the foundation thinking of two large bodies of modern research and business thinking. They are the fundamental importance of customer advocacy and employee engagement, two of the critical links in the service profit chain.
This trend is longer and much more fundamental than digital but digital reinforces this trend as digital adds a service layer to even the most basic products and in many cases is turning product sales into service sales. An excellent and often cited example of this is Rolls Royce’s move away from selling jet engines to selling a flight hours service. The issue is that service businesses (and indeed all knowledge work) require different leadership disciplines than industrial era product businesses. The leadership styles of industrial era product companies are based upon supervise and control processes supported by a standard organisational hierarchy as pioneered by Frederick Taylor and others. Service businesses however are based on an engagement mechanic, where empowered employees provide great service creating customer advocates. Dan Pink popularised this concept in his book and TED talk “Drive” (TED Talk is here).
Many organisations have made or are actively making this change while others haven’t started. This is highlighted by the rapid growth in importance of Employee Engagement and Customer Net Promoter metrics across many organisations. While measuring is important, if they are truly committed to different results measurement needs to be accompanied by new leadership, new operating models, new incentives and new organisation designs. Too often these changes are not made so we are left working on symptoms that arise in an unaligned system rather than addressing root causes.
The second trend is the increased pace of change. Advances in information technology are certainly implicated in this and many would argue that it is the primary cause. This might be true, but the leadership issue is whether managing in times of great change requires different skills and capabilities than managing in times of stability. The intuitive answer is yes, but digital, or whatever the cause of the change is, is not the fundamental issue. The fundamental issue is that in times of great change experience can become a liability rather than a core asset that success is built upon.
Most leadership development is centred on observing those who lead us and mentoring from experienced leaders. Most successful leadership institutions, academies and courses are based around people who have had significant and successful leadership careers. It makes sense. If you were given the choice of learning from people who have been there and done that and those who haven’t, most of us are going to choose to learn from successful leaders. This approach ,however, reinforces the past. Before you know it what gets passed down is leadership skills and techniques from maybe 20, 40, 50 years ago, they used to work but maybe are not so appropriate today.
These two forces of change mean that organisations require different leadership skills going forward than they have traditionally needed to succeed and while digital has not caused these trends, it seems likely that if you wish to thrive in today’s environment and become a digital leader you will need to embrace a new leadership paradigm. And what might that look like? The table below provides one possible view.
| To become a digital leader and thrive in the 21st century leadership needs to move …. | |
| From Managing people through traditional supervise and control techniques. Leader as “hero” and the main character leading the organisation through the mythic “hero’s journey.” Leadership focus is defining and implementing medium to long term strategy and tactics. Change is a threat to the status quo and a potential disruption that must be managed. Decision making based largely on the experience and intuition of the leader. | To Managing an environment that engages and enables knowledge workers and experts. Leader as “gardener” working diligently to maintain an optimal environment for organisational growth. Commitment to long term purpose and contribution with flexibility in strategy and tactics required to fulfil the purpose. Change is an opportunity presented to us to improve our options as we seek to fulfil our purpose or contribution. Decision making based on evidence, data and experimentation and (re)learning. |
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This picture is not complete and could likely do with some serious improvement (all ideas and feedback welcome) but it’s a start and a significant departure from traditional views of leadership.
We looked at this issue through the lense of digital and whether digital requires a new leadership paradigm. The answer is yes, we require a new type of leadership, but it’s not digital that is driving this need, it is a broader trend to change from industrial style management where automation and efficiency rule in value creation to “post industrial” management where engagement, knowledge and expertise rule in value creation, digital simply heightens the need.
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