Digitization and Horizontal Leadership as a Success Driver

How leadership succeeds in flat structures

Horizontal leadership models are becoming increasingly popular – not least because they are also being promoted and demanded by digitization. However, leadership as such must by no means be lost in the process; its role is too important for business success. Why is that so? And how can leadership succeed in flat structures?

Digitization brings many things with it: efficiency gains and competitive advantages on the one hand, (but also) new challenges on the other. The latter are often associated only with obvious problems such as a lack of resources or know-how; however, it is also the less obvious aspects that can pose lasting challenges. One example is the issue of leadership. After all, digitization has contributed to the fact that tried-and-tested corporate structures are increasingly being questioned and flat, dynamic hierarchies are replacing classic silos and top-down structures. The role of managers is also changing as a result – which presents opportunities and risks in equal measure.

Breaking down structures

It is now generally accepted: Involving employees in decision-making and design processes is worthwhile for companies; because the top-down principle that has prevailed up to now restricts the initiative and innovative power of the workforce too much. Digital technologies enable and facilitate the reduction of hierarchies, for example through mobile working. In this way, they meet the needs of the new type of employee, who has completely new expectations in terms of hierarchy and self-fulfillment.

One thing that must not be lost in the process is the competence (communication) of managers. After all, managers play an important role in the corporate culture; both in terms of business success and in supporting their own employees. They take on organizational functions, promote the further development of their teams and ensure that they can successfully complete their tasks. In doing so, they see themselves as “coaches,” pass on expertise and open up their own networks. These added values must be maintained even with flat hierarchies, because only with the help of this “empowerment” can companies be successful in the long term and sustainably. What does this mean?

Reorganization instead of downsizing

Horizontal management models provide a promising approach: They rebuild, not dismantle. They focus on working with combined forces, i.e., on the joint performance of all project-relevant people at one level. In this way, the “old hands” with their experience, the technical experts with their know-how, the “young guns” with their innovative spirit, and the bosses with their holistic overview all work on an equal footing for the company’s business success. This increases adaptability to new (market) conditions and thus improves flexibility and agility in equal measure. Management is primarily responsible for creating the right framework conditions, equipping employees with the necessary tools and skills, and maintaining an overview. There are already many practical approaches to horizontal leadership:

Leadership today – in practice

Example 1: The Hamburg-based IT seminar service provider Oose relies on dynamic decision-making competencies instead of traditional, person-based leadership positions. Within the 50-strong team, there are no traditional managers who have authority over other employees and delegate tasks. Instead, employees organize themselves into various thematic working groups in which they make decisions together. An executive board, elected for two years, provides support for major decisions, such as investments, which are made in plenary discussions between the board and employees. The advantage of the model is that the responsibilities of a traditional manager are spread over many shoulders, but not rationalized. The “disadvantage”: It is an approach that is certainly not equally suitable for every company; especially not when it comes to larger companies.

Example 2: The hotel search engine trivago takes a different approach with its approximately 800 employees. In order to make the best possible use of the natural abilities and inclinations of its employees and to provide them with further development prospects, the company (like Oose) relies on horizontal workflows instead of vertical coordination ladders – in this case, however, with the help of no less than three parallel leadership models: Responsibility Leads, Mentors and Experts. As the driving force in developing a business unit, Responsibility Leads strategically lead their teams to achieve business goals. They create the necessary framework and environment in which their teams can work effectively and efficiently and develop successfully. In this way, they are the closest thing to traditional middle managers. Mentors support their colleagues in realizing their full potential – in professional and personal matters alike. They focus on individual support, networking and internal development. By bringing professionals together with mentors outside their core team, they broaden knowledge and foster collaboration within the company. Experts from each department share their knowledge and experience to enhance the skills of their colleagues. They contribute to technical decision-making and assist with recruitment.

Flexible on the career climbing wall

What must not be forgotten in all these approaches is that if management positions – some of which have been hard-won – are simply abolished, this is rarely met with enthusiasm; the working atmosphere can even suffer massive damage. For this reason, career alternatives should always be created when hierarchies are reduced. One proposed solution is the career climbing wall. Instead of moving up the traditional career ladder, employees move more horizontally and have greater opportunities to develop their skills and interests; in different, not always managerial, roles. This role flexibility means that relinquishing a leadership role is no longer an embarrassment – it is simply no longer a step backwards, but a sideways movement. This in turn opens up new opportunities to make the best possible use of one’s own skills. Be it in a managerial, advisory or idea-giving position.

Whatever the details of horizontal leadership look like, the so-called HIPPO syndrome (Highest Paid Person’s Opinion) – along with its (figurative) clumsiness – is no longer sustainable and tenable for many companies. Because in times of digital change, the boss’s sole opinion cannot and must not be the measure of all things. New management concepts must be found that are individually tailored to the company.

Marcel Kappestein is Managing Director of Avenga Germany, the German subsidiary of the global Avenga Group, which was created in 2019 through the merger of several established IT companies. Internationally, more than 4,300 professionals work for Avenga at 32 locations in Europe, Asia, LATAM and the USA. In his position, he is responsible for the German business as well as Avenga's growth activities and business development in the DACH region. The focus is on digital transformation for corporations and large mid-sized companies. He stands for strong and modern leadership and empowers teams to realize tangible benefits for their business through full customer focus. Marcel Kappestein is a visionary and doer who, among other things, connects companies as well as people through his distinctive network and thereby enables inspiration for the challenges of companies.

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