Transformation is changing the role of leaders and this change brings with it 4 core tasks with digital mindset as the basis. But how does digital mindset form the basis and what are these leadership tasks?
“A team is not a group of people working together. A team is a group of people who trust each other.” Best-selling author Simon Sinek uses this phrase to describe how teamwork becomes sustainably successful. But then is a leader even needed? And does leadership in the age of digital transformation look different than it used to?
Digital transformation is not only changing the way we work together, but also entire business models and value streams. For example, it is now quite normal in many companies to collaborate virtually, to design workshops using video conferencing tools, and to design the value proposition to the customer purely digitally. But do these changes also mean a change in leadership? The word “digital leadership” is often used to describe leadership in digital transformation. However, most descriptions of digital leadership merely focus on the use of digital tools in leadership or on the purely virtual leadership of distributed teams. Leadership in times of digital transformation, however, means much more. It is about changing and adapting the core tasks of a leader. The basis for this is the digital mindset of the leader. This refers to the six personality dimensions that are critical to success in dealing with digital transformation. This is not about software knowledge or know-how in programming languages, but about personality dispositions that are important and critical to success in digital transformation.
Digital mindset as the basis: 6 dimensions critical to success
Digital mindset is based on a change in one’s own understanding of leadership. Reflecting on one’s own digital mindset allows managers to understand existing patterns of action in the context of an increasingly rapid digital transformation. This can then provide the impetus to adapt their own understanding of leadership.
In total, there are six relevant dimensions for digital mindset:
- Openness & agility vs. persistence
- Open approach to failure vs. avoidance of failure
- Creativity & design motivation vs. process loyalty
- Proactivity & entrepreneurial action orientation vs. reactivity & situation orientation
- Criticality vs. harmony orientation
- Customer-centeredness vs. task- & organization-centeredness
For managers, it is not only important to understand these dimensions for themselves, but it is also important to understand how the employees in the team are characterized in these dimensions in order to be able to respond appropriately to each employee.
Leadership in transformation: 4 core tasks
The digital transformation makes it essential to react flexibly to a constantly changing environment. Only by constantly reacting are organizations able to make offers that are relevant to customers, even in changing markets. However, this also means a change in the required leadership. A strictly hierarchical understanding of leadership can no longer ensure the required speed. This would mean that relevant decisions would only be made by one person (the manager). However, the complex and rapidly changing environment makes it impossible for a single person to keep track of all trends and relevant developments. Therefore, responsibility and decisions have to be handed over and distributed to the team. This results in 4 core tasks for leadership in transformation:
1. Framework provider for trust
For decisions to be made in the team and by team members, there must be psychological safety and trust in the team. This means that leaders must build, define and live the framework for trust in the team on a daily basis. Trust does not build through lip service or presentations about it. It only builds through daily living of a culture of trust by leaders. With regard to the digital mindset dimensions, this means that managers must deal openly with failure, because time and again decisions will be made by the team that in retrospect turn out to be mistakes. The important thing here is not to punish the person for the decision, but rather to learn from the mistake and share it openly. So that this mistake does not happen again in the future. In addition, the ability to criticize is elementary in order to create the framework for trust in the team. Because on the one hand, as a manager, it is about giving a framework for actions in the team through appreciative criticism, and on the other hand, it is about an open acceptance of criticism by the team.
Each team member has different strengths and values for the team and the organization and a different mindset (different characteristics in all 6 success-critical mindset dimensions). In order for each member to be able to develop exactly where his or her strengths lie, individual support by the manager is important. Similar to gardeners who water each plant differently and use different fertilizers for different plants (depending on variety, sunlight, location), managers should also respond differently to team members. In this respect, it is a great advantage if the digital mindset of the team members is known and one can thus respond precisely to the needs of the team members. This knowledge about the different needs of team members can be obtained through scientifically valid diagnostics for digital mindset.
3. Architect of ecosystems
A world that is changing and transforming ever more rapidly also means a continuous change in the demands on the competencies of teams and team members. As a leader, it is therefore a core task to build an ecosystem in which team members can grow and develop. This is because the constantly changing competence requirements mean continuous (lifelong) learning for team members. For this, they need customized development plans (tailored to the individual mindset) and opportunities for exchange. The complexity makes it impossible for all this to be done by the manager. Thus, an ecosystem of appropriate tools (e.g., a platform for individual learning), exchange opportunities (e.g., via Learning Circles), networking opportunities, and platforms for knowledge transfer must be created. Here, the manager acts as an architect, but not as an executive body. With a view to the digital mindset of the team, managers should promote the dimensions of openness & agility, proactivity & entrepreneurial action orientation, and creativity & design motivation.
4. Service provider
As described above, due to the existing change, decisions have to be made more and more independently by the team directly. The manager serves here as a sparring partner when questions arise about decisions and how to proceed. However, not with the final decision-making power, but merely as an advisor and thus service provider. In order for this consultation by the manager to be understood by the team as a service and not as a decision or overruling by the manager, it is essential that trust is built up (see 1. Framework for trust). In addition to the consulting activity, the manager is also a service provider for other topics that enable the team members to develop their best work. To do this, it is important that leaders continuously listen carefully to what employees need to work well. From this, managers can then draw conclusions on how to support employees. This is where the digital mindset dimension of customer centricity comes into play quite strongly. For managers, the employees in their team are customers who are the focus of their actions. Because this also develops and creates an external customer centricity.
In order to create the group of people described by Simon Sinek who trust each other, the four core tasks described are elementary for managers, especially in the digital transformation. The basis for all these core tasks is the digital mindset with 6 different dimensions, which form the basis for the core tasks in different priorities – as described above.