Digitalisation has triggered a race for the future. New players have emerged challenging traditional business models or even disrupting them. C-level trips to Silicon Valley are booming. And there is literally no escape from AR, VR, Big Data and Artificial Intelligence. But one fundamental dimension of digitalisation tends to be neglected or even overseen: the need for cultural change in organisations.
Hierarchical models are in crisis
Recipes of the past are not necessarily suited for the digital future. This is especially true for hierarchical models that are based on the principles of power, subordination, command and control. Employees work within precisely defined structures, roles and processes. Conformity is rewarded. This top-down model has shaped generations of managers and determined corporate cultures. But now these foundations are being challenged and shaken. What has happened?
Welcome to the VUCA world
The speed of change has accelerated significantly. Globalisation, increased competition and last not least digitalisation are among the key drivers. What used to be stable, clear, predictable and controllable has been replaced by volatility, uncertainty, complexity and ambiguity. Therefore, new concepts are needed to cope with this fast-paced, fluid environment. Scrum is such an approach. Initially invented for agile software development, it has in the meantime conquered many sectors outside of IT. In a manifesto, published in 2001 by seventeen software practitioners, the core principles of agile software development were defined: focus on individuals and interactions, pragmatic solutions, collaboration and flexibility. In other words: rigid organisation structures and linear project management slow down processes while they do not deliver better results.
The chief commander has served its time
To become more agile, companies need to redefine their corporate cultures as a prerequisite. How should they proceed? Contrary to common understanding, they should not start with their employees or their middle management (the so-called clay layer). The starting point should be their leadership team. Why is that essential? Because the leadership team is the catalyst of digital change, not only providing purpose and leading by example, but also inspiring, empowering and driving collaboration. Above all, leaders need to be authentic to win employees’ hearts and minds. Mere lip service will not work. Do these leaders actually exist?
Caught in traditional thinking
I think most of the leaders are still caught in traditional thinking. And that has to do with long established patterns, their professional socialisation and their age (many of them are not digital natives). They need new skills to become the new type of leader and transition from chief executive officer to chief purpose, inspiration, empowerment and collaboration officer. They also need to understand that digital change cannot be prescribed top-down and is more than using digital tools and introducing digital business models. And most importantly, they need to be prepared to critically reflect themselves and overcome fears of losing power and control in favour of moderating processes and unlocking synergies.
Leaders need to be at the forefront
The digital revolution requires a fundamental revolution of mindset and culture. And leaders need to be at the forefront to pave the way.
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