Although the internet has been in use for a lot longer, it’s only really in the last ten years that digitalization has become entirely pervasive. Fernando Polo, digital expert and author of both “Leadertarians” and “Socialholic”, reflected on this change during his presentation to EU Business School students. He shared valuable insights about how organizations must transform in order to survive and succeed in an ever-changing digital context.
It is often assumed when digital is discussed that the focus is squarely on technological innovations. Instead, Fernando emphasized the importance of the people behind – the screens who drive the digital revolution.
Why Do We Need Digital Leadership?
Fernando explained how to build digital leadership, sharing the key principles behind the development of digital culture in the workplace. He explained that human beings are slow to recognize and predict exponential growth, and that organizations are even slower to respond to change as they’re complex structures that are traditionally resistant to transformation.
However, some companies saw the digital revolution coming and adapted successfully to their new environment. They were able to survive and grow as a result of effective digital leadership.
Case Study: Netflix
One such company was Netflix, which started out as a DVD distribution service but quickly moved into online streaming as broadband capabilities began to evolve. Ongoing changes in the digital context meant that its evolution did not end there. When content creators like Disney moved into developing their own streaming services, Netflix took the smart decision to start creating its own original content.
This shows how a company that began by distributing DVDs – just like Blockbuster, which failed to evolve and so went bankrupt – ended up making movies and TV shows. Netflix’s focus has undergone a significant shift during its lifetime: from logistics to content creation. This shows that digital transformation is a continual process and that the focus should not be on individual acts of innovation, but instead on building a creative digital culture, one that is capable of constant adaptation and innovation.
Three Elements of Digital Transformation
Fernando explained that there are three points of consideration during a process of digital transformation:
- The digital customer
- The digital business
- The digital enterprise
Companies tend to focus on the digital customer, ensuring that customers’ online experience with their brand is a positive one. They also concentrate on the digital business: the digital products that their company can offer the customer. However, the third element the digital enterprise – is arguably the most important, even if it is the least visible to the public.
What is the Digital Enterprise?
The digital enterprise revolves around a company’s culture and leadership, its agility andintelligence. These are the values that underpin digital transformation. To be able to provide a good online experience and innovative digital products, companies must first implement the agile methodologies of a digital enterprise.
The adoption of digital values requires companies to rethink traditional models of business and leadership so that staff members can be creative and adaptable. In a digital enterprise, the leader is not there to tell people what to do but instead to create an environment in which staff members are intrinsically motivated.
How Can Intrinsic Motivation be Developed?
While explaining how to create an ecosystem in which people can thrive, Fernando drew upon the ideas of author Daniel H. Pink. He shared three axes on which intrinsic motivation can be developed: purpose, autonomy and mastery. Accordingly, companies aiming to develop intrinsic motivation should ask themselves the following questions:
- How can we ensure that employees see that they are making a positive impact with their work?
- How can we maximize opportunities for employees to take action at work based on what they think is the best decision?
- What can we offer employees – in terms of personal and professional development – beyond their pay?
To achieve intrinsic motivation, Fernando suggested that organizational culture be reinvented on three levels: storytelling, people and rituals.
- Storytelling refers to the internal communications of the organization and whether the bigger picture is being effectively communicated to employees; for example, the message of how their individual contributions reflect the company’s key values.
- The people level relates to recruitment and retention, and the fact that people should be hired and fired in accordance with company values to ensure that all employees share a collective vision.
- Rituals are the repeated events in which people are able to experience and live the company culture. Fernando emphasized their importance in building a shared sense of intrinsic motivation.
The New Digital Leader
Fernando stated that the hierarchical structures of old were designed for efficiency, not for innovation. Instead of the traditional pyramid model in which middle managers communicate instructions from above to employees, he suggested a network configuration as the goal. The advantage of this more liquid structure is that people can connect, create and contribute as autonomous agents.
In an organization that has undergone digital transformation, ideas are not imposed top-down by leaders. There is less need for an all-powerful CEO. Instead, a digital leader’s job is to promote agile thinking and the methodologies that enable it. Rather than give direct instructions, a digital leader should promote creative behaviors and company values.
Skills for the Digital Leader
To be an effective digital leader, data must be used as the foundation for decision-making, along with a little instinct. That means the ability to read and interpret data is crucial. A design mindset is also needed. To have this requires commitment to a non-linear process in which assumptions are challenged and problems are redefined in order to reach innovative solutions.
Naturally, the ability to use, and enable the use of, technology for company purposes is vitally important. However, another very “human” skill holds equal significance: creativity. This can be defined as the ability and willingness to pursue new and different routes. Space for “failure” must be provided by leadership so experimentation is encouraged.
Values of Digital Leadership
What defines a digital leader in contrast to a traditional one is a focus on openness. The digital leader is connected to the people in their organization by direct channels. They co-lead with others and promote values of freedom and responsibility over the need to control. They are humble, facilitating the innovation of others rather than imposing their own ideas.
For Fernando Polo, the benefits of this approach are obvious. Leadership which embodies these values results in an organization that is better prepared to adapt, evolve, survive and even thrive in an ever-changing digital landscape.
If you’re looking to develop all the skills mentioned above and become a digital leader, EU Business School can help you achieve your goals. Check out our wide selection of internationally accredited programs.