Leadership in the Digital Era
By: Johannes Peretzke
Tags: Leadership Skills, Game of Thrones, Management And Leadership, Leadership, Digital Transformation

The motive of leadership is woven into the very fabric of human society. In both history and fiction, there are countless examples of individuals taking on the mantle and inspiring others to work towards a common goal: whether it’s religious texts such as the Bible with Moses quite literally leading his people across the Red Sea or the various factions in HBO’s TV hit “Game of Thrones” vying for people’s support in a never-ending struggle for the crown, the need for a guiding figure is a recurring theme in stories about human activity. Reality has produced equally fascinating leaders throughout the times, ranging from civil rights activists such as Martin Luther King and Rosa Parks to visionaries the likes of Jeff Bezos. The latter is a fitting example of the difference between the historically rather martial idea of leadership and the necessary strategies and skillsets of modern leaders wanting to be successful in the world of business.

While it might seem a simple enough concept, there are actually a number of common misconceptions about the nature of leadership and its origins. In the following sections, we’ll debunk some of these myths and analyze how the digital transformation of society in the last decades has shaped the requirements for leadership success in modern businesses.

Myth 1: Leaders = Managers

The most persistent misconception about the concept of leadership pertains to the distinction between leaders and managers. People often use these terms synonymously, and although the two roles cannot always be clearly separated from each other, there are some fundamental differences helping you to distinguish between them.

Managers are concerned with the internal structures and processes of a company, organizing the team and making sure that the predefined goals are being reached. They represent a mostly rational perspective on the team and its progress, giving instructions and overseeing that new rules are being set in place and adhered to. As such, they often experience some distance from the people around them, not being regarded as “one of them” by their employees. The role of a leader is more formal and often relates directly to a specific position in an organization’s hierarchy.

The role of a leader, on the other hand, is a lot more intangible, concerned with the people around them and how their individual skills can be integrated to work as a team, benefitting from each other’s knowledge and experience. Leaders are agents of change working towards a vision. Their job is not to control people, but to inspire employees to give their best and pursue a common goal. There is no specific title or official mandate needed to be accepted as a leader: it’s a badge of honor that can only be gained by convincing people to give you their trust and commitment.

The best managers are also leaders, but more often than not, it’s someone without a special position who is actually holding the team together.

Myth 2: Born to Lead

Game of Thrones. Produced by David Benioff and D.B. Weiss, HBO, 2011–2019.

Historically, people were born into leadership by blood or wealth. Take a look at the aforementioned TV show “Game of Thrones”, in which multiple factions are constantly trying to claim the Iron Throne and subsequently gain control of the Seven Kingdoms: they might all follow different strategies, but without a proven kinship to the royal family, there’s no chance of becoming king or queen. The show also excels in displaying different styles of leadership and their varying success. While Daenerys Targaryen, the “Mother of Dragons”, manages to round up a huge army of former slaves willing to sacrifice their lives for her cause by treating them with integrity and fairness, characters such as Joffrey Baratheon, who ascends to the throne in the wake of his father’s death, rule with an iron fist. He might scare his people into obedience by threatening to cut off their heads (or any other extremities, for that matter), but he’s certainly not a beloved leader inspiring his followers. What’s more, he only advances to the leadership position due to his hereditary right despite him being neither prepared nor mentally suited for the job.

While being a work of fiction, the events of the show are heavily inspired by real-world circumstances. Ludwig XIV, former king of France, was given his crown when he was only four years old. For the following decade, a council was put in charge to govern on the king’s behalf, but after this period he remained the single ruler of the country for a total of 72 years until his great-grandson, Ludwig XV, succeeded him — at the age of five.

Fortunately, things have changed in the past centuries and one’s family background has been eliminated as the deciding factor in questions of job candidature. However, some people still seem to believe that whether someone will make a good leader is a question predetermined by birth: the phrase of the “natural born leader” immediately comes to mind in this context. However, the notion that leadership skill is something you “either have or you don’t” is misleading: a charismatic attitude might be a handy skill for someone pursuing a leadership position, but it’s not enough to guarantee a successful career. You still need to carefully hone your skills and look out for new learning opportunities. Becoming a leader is an iterative process requiring you to be open to criticism and willing to make mistakes. As famous writer Stephen King once said:

“What separates the talented individual from the successful one is a lot of hard work”.

A fitting example is Oliver Kahn, former World’s Best Goalkeeper, who is going to take over the position of executive board chairman at the FC Bayern Munich in 2022 — the club for which Kahn played during the majority of his career, winning numerous titles and becoming an international football legend. His successful career might very well have been influenced by a natural talent to act as a leader on the field, but his trophies weren’t simply handed to him. It was his willingness to constantly improve that earned him the achievements necessary to advance toward such a position in the future.

Myth 3: The “Leadership Personality”

Photo by Xan Griffin

As with most things, people have a preconceived notion of the ideal, archetypical leader. The term usually conjures up the image of a charismatic, outgoing person who commands the attention of every room they enter and easily charms people to follow their cause. While this might be in accordance with many successful leaders in both past and present, the idea that only specific personalities possess the ability to inspire people is not correct. This pertains especially to the misconception that introverted people are not suited to be leaders, being commonly portrayed as shy, reclusive or socially awkward in popular media. Not only does this show a lack of understanding of how the processing of information is the main difference between extroverted and introverted minds, but it also doesn’t give any credit to the success of famously introverted leaders such as Nike founder Phil Knight or football coach Carlo Ancelotti. Both, while being naturally quiet, have attested their success to their calm, considerate way of thinking and ability to influence others. While not a natural speaker, Ancelotti’s enthusiasm for the sport has allowed him to effectively communicate with his team, proving his expertise and gaining their trust. He calls his style the “Quiet Leadership” and has stated that, while many might perceive his calmness as a weakness, he likes to think of himself as someone who doesn’t depend on raising his voice or making a scene to exercise authority and achieve great results.

Of course, certain personality traits will make it easier for you to gain leadership while others might hold you back, but there really isn’t a one-size-fits-all approach to leadership. Instead, people looking to rise up to the challenge should work on a personal style and be open to change as environments shift around them.

Leadership Characteristics

While not a prerequisite for success, there are a number of skills commonly found in leaders of different backgrounds and personalities. These provide you with the necessary tools to guide a team and master upcoming challenges for a business unit or an entire organization.

The first of these categories is the analytical skillset leaders should be able to apply in order to create strategies that consider external factors relevant for the future of an organization such as technological developments and disruptive industry threats. As a leader, you should always be on top of existing problems in your team and possess conceptual knowledge in order to evaluate new ideas and their potential benefit for the company. Thinking ahead and planning are essential skills if you want to guide an organization toward success.

Another essential element of effective leadership is the ability and willingness of an individual to constantly work towards self-improvement. They should be in control of their temper and confidence, but still practice self-reflection and welcome feedback so as to identify elements of their style that need to be changed in order to harmonize with their team and the individual corporate. This is especially relevant as different environments and situations might require you to adapt your leadership style to some extent: a more authoritative, decisive leadership can be extremely effective or even necessary to navigate an organization in volatile times. Companies that are undergoing a fundamental structural transformation or experiencing a crisis might benefit from someone taking the reins compared to a more participative leadership style.

According to recent studies, the social skills of someone wanting to become a leader are integral in order to gain the trust and respect of their employees and create a unified team. Empathy and moral values have continually been named as the most important leadership characteristics, suggesting that employees place the utmost importance on an authentic, respectful leader who treats them like people and acknowledges their individual perspectives and experience. Leaders need to be able to deal with different egos and integrate them into the structure of a team. Fostering the talents of employees and encouraging creative thinking is essential as well — employees should be allowed to think for themselves, confident that their voice will be heard and mistakes will be accepted as a step towards innovative solutions.

Oliver Kahn, 2020 GQ-Interview:

“It’s about giving people space so that they can develop their potential. That is what leadership is essentially about for me today: creating an environment in which people can develop in the best possible way and work successfully towards a common goal .“

It all boils down to the ability to influence people. For some, the term “influence” might have a negative sound to it, reminiscent of manipulation strategies and mind games, but it doesn’t have to be that way: it’s possible to influence an employee in such a way that they perform tasks more in line with their strengths. In this context, leaders need to practice transparency and be honest about the progress of the individual employee and possible weaknesses that can be improved upon. At the same time, leaders need to take responsibility for general mistakes and disappointments of a project, protecting their team and looking for solutions instead of blaming someone else for lacking results.

Digital Leadership

Photo by William Iven

While the core of leadership nature has been the same for hundreds of years, the omnipresence of modern technologies in the workplace will have a lasting impact on the idea of leadership. Therefore it’s essential to evaluate how the age of digitalization will change the role of leaders and the skills necessary to navigate the increasingly complex environment of the 21st century.

We live in an era of extreme uncertainty. The rise of technology and the internet has often been compared to the invention of electricity in its revolutionary effect on society: Not only are there new, disruptive technologies being introduced seemingly on a daily basis transforming the way we live and work, but political leaders and companies alike also experience an increasing pressure to create a long-term sustainable future in the face of issues such as climate change. Customers are becoming more aware and organizations wanting to survive this transformation need to be innovative and open-minded lest they lose touch with global market conditions.

New Requirements for Success

In this context, the role of leaders is often described as “Digital Leadership”. But what does that really mean? Do modern leaders need to be tech-enthusiasts who are always up to date with the latest technologies and trends in order to be successful?

Well, yes and no. Of course, awareness of how changes in technology will impact the business model of a company is essential, as is the ability to evaluate how available technologies can be introduced to improve the internal processes of an organization. This is especially important considering the paradigm shift in the way organizations are structured: While classic hierarchies still exist, the future organization is more fluid, with a complex network of freelancers, consultants and employees across the globe having to work together. Leaders need to navigate these complex virtual structures and consider how outdated working time models and classic communication channels can be modified to meet the expectations of employees. “Thinking outside the box” is becoming an even more important characteristic for leaders who not only want to keep their head above water, but actually use the new opportunities of the digital age to their company’s advantage. Questioning existing practices and integrating innovative strategies based on the customers’ needs can have a dramatic impact on the success of an organization and its ability to stay ahead in a competitive environment.

Still, leaders need to keep in mind that their focus should still be on the people. With the introduction of technologies such as artificial intelligence to the workplace, many employees are concerned about their future and might not always be enthusiastic to experience drastic changes in their daily job. Therefore leaders need to fulfill their roles of agents of change while acknowledging the individual worries and perspectives of their employees, especially considering the importance younger generations place on the integrity of their superiors and its impact on employee performance and motivation. Knowing how to communicate with employees and create conditions enabling them to work creatively while retaining authenticity is one of the main requirements for digital leaders.

Unfortunately, studies suggest that many leaders still treat digital transformation as a mere buzzword, making no discernible effort to create actual strategies that incorporate digitalization into a company’s future. Desperately holding on to established practices and structures is one of the main reasons companies fall behind: The average lifespan of modern companies today only amounts to about 12.5 years, with many formerly big players such as Kodak and Nokia missing the boat and considerably losing ground in the process. This correlates directly with the lack of a systematic analysis of an organization’s industry in order to anticipate important future developments.

Seth Godin, 2019 in MIT Sloan Management Review, Leaders Don’t Hide Behind Data:

“It’s true, your business is not on cruise control — you’re driving. But what you’re not doing is figuring out a whole new route forward. What you’re not doing is inspiring your team to level up. What you’re not doing is inventing a new game. Instead, you’re playing someone else’s game.”

Current Challenges

Despite research results, many leaders also have trouble allowing a more participative style of leadership desired by many employees: Although an authoritarian leadership characterized by silo mentality, strict rules and a focus on operating figures is seen as undesirable, a considerable number of leaders believe it to be hard to let go of these tools in the foreseeable future.

While it’s understandable that leaders, especially younger candidates with limited experience, might be intimidated by the enormous changes ahead of them, some critics also attest this to the lack of moral values in modern corporate culture: The status of money as the main incentive for success and the resulting lack of a vision communicated by the leader of a team are regarded as major weaknesses in today’s business world.

Indeed, in a study by MIT Sloan Management Review, only 49% of employees stated that they were satisfied with their company’s purpose, lacking trust in the abilities and motivation of their superiors. In the face of astronomical managerial salaries and numerous scandals, many hold the suspicion that the pursuit of leading positions is merely motivated by the prospect of material wealth, paying no attention to the responsibilities leaders should cover and lacking the will and courage (or, as Oliver Kahn would put it, the balls) to actually try something new. Consequently, many leaders are seen as hiding behind empty phrases without truly making an effort to lead the organization and its people into a brighter future.

Common Mistakes

To wrap up this article, we’ll look at three common mistakes leaders tend to make. Keeping these in mind, you’ll be one step closer to the leader you want to be.

The Imitation Trap

Don’t pretend to be someone you’re not. Many people make the mistake of copying their biggest idol’s behavior, but there’s no point in trying to be Elon Musk if your personalities are complete opposites. Using role models as inspiration is a good strategy, but you need to reflect on your own strengths and remain authentic in order to gain your employees’ trust. There really is no formula for how to behave in a new situation. You need to use your experiences and interactions with others to propel yourself forward.

Hiding Behind Data

Data is becoming an increasingly important part of any job. Leaders should use this data to their advantage, analyzing market conditions and the effectiveness of different strategies. However, there’s always the risk of depending too much on data, using it as the sole basis of decision-making and paying no attention to the implicit factors influencing the success of a team and its individual members. Don’t make digital tools your crutch. The focus of a leader should always be on human connection. That doesn’t mean disregarding the data, just putting people first.

Holding On And Letting Go

Many leaders, especially seniors who are used to the way things have been done for a long time, have trouble accepting the fundamental changes digital transformation will introduce to the workplace, relying on their learned methods and experience. While it might be difficult to come to terms with this new reality and familiarize yourself with new tools and technologies, resisting the digitalization of the business world is a sure death sentence for companies competing in global markets. Therefore it’s absolutely necessary to be daring and innovative, allowing unusual methods and creative thinking in order to stay ahead and secure a future both for yourself and your organization.

References

Ancelotti, C.: Quiet Leadership. Wie man Menschen und Spiele gewinnt. Albrecht Knaus Verlag, 2016.

Bernstein, E.: The Transparency Trap. Harvard Business Review, 2014, https://hbr.org/2014/10/the-transparency-trap.

Gavin, M.: Leadership vs. Management. What’s the Difference? Harvard Business School Online, 2019, https://online.hbs.edu/blog/post/leadership-vs-management.

Godin, S.: Leaders Don’t Hide Behind Data. In: MIT Sloan Management Review 61(1), 2019, pp. 1–3.

Kahn, O.: Ich. Erfolg kommt von innen. riva, 2019.

Knight, P.: Shoe Dog. Die offizielle Biografie des Nike-Gründers. FinanzBuch Verlag, 2016.

Landry, L.: 6 Characteristics of an Effective Leader. Harvard Business School Online, 2018, https://online.hbs.edu/blog/post/characteristics-of-an-effective-leader.

Mukherjee, A. S.: 5 Musts for Next-Gen Leaders. In: MIT Sloan Management Review 61(4), 2020, pp. 1–4.

Russel Reynolds Associates: Management 4.0. Fünf Persönlichkeitsmerkmale unterscheiden den erfolgreichen digitalen Transformations Leader von der analogen Führungskraft. 2015.

Schrage, M.; Pring, B.; Kiron, D.; Dickerson, D.: Leadership’s Digital Transformation. Leading Purposefully in an Era of Context Collapse. MIT Sloan Management Review, 2021.

Wagner, G.: Digital Leadership. Die Führungskraft im Zeitalter von Industrie 4.0. In: Industrie 4.0, Springer Gabler, Wiesbaden, 2017, pp. 165–214.