Managers today are facing truly unprecedented pressures to make changes. Digital transformation, with its growing complexity and volatility, is forcing us to abandon our tried-and-true leadership models. New criteria for evaluating leadership skills and style are being introduced, as yesterday's "command-and-control" approaches often no longer function.
As digitization gathers speed, more agile organizations are emerging that cannot be managed and controlled with the linear methods of the past. Managers thus need to be continually readjusting themselves and rebalancing their behavior. In the process, they are encountering confident employees who expect their managers to give them a voice in decision-making and to provide "big-picture" orientation. At the same time, digital collaboration tools such as companies' own internal social networks keep making knowledge-sharing faster and more transparent, which ultimately makes decision-making processes more democratic. It is vitally important for managers in Work 4.0 environments to understand and be able to work with such tools. This is because more and more "digital natives" are entering the employment market, i.e., people who have grown up with the new communications tools and who thus are far more familiar with them than many managers are.
If we assume that work is going to be organized in new ways in the digital age, we have to look especially carefully at managers' responsibility in shaping workplace cultures. We also have to scrutinize their "virtual leadership" skills, since in many areas employees will choose when and where to work to a growing extent. We thus need systems that permit leadership at a distance. The special challenge is to give employees more freedom and, at the same time, ensure that desired work results are actually achieved on time. In other words, managers need to learn to both accept the autonomy of their team and lead with a view to desired results. Their overall focus has to be on implementation.
As the digitization of our economy proceeds, response times keep shrinking and planning horizons keep moving inward. Decision-making thus has to become ever faster, and this increases uncertainty and risk. In order to keep pace with these developments, managers need to allow their teams to work with greater error tolerance. In such a culture of continuous learning and error tolerance, "prototyping" becomes more and more important. This means that instead of always insisting on 100 percent, i.e., the supposedly best solution, it can be wiser to settle for 80 percent – that can be enough to get things underway. While customers allow room for error in rapidly changing markets, they rarely tolerate a lack of speed. In a culture of error tolerance, failure is explicitly allowed, while failing to try is inacceptable. Employees need a working climate that encourages them to stand up and be counted, without hesitation, when things move in a wrong direction. When something is not working, a manager must be able to stop it, suddenly and completely – that is part and parcel of the type of personal reliability that manifests itself in responsibility for the overall system. "Big-picture" awareness is what is needed.
Managing organizational structures that are seemingly contradictory – that will be a growing challenge for managers in the digital world. Very few managers work in young and unconventional startups; most work in companies that both want to protect their core business and develop innovations and new business ideas. The struggle to balance efficiency and innovation in such ambidextrous companies calls for interdisciplinary thinking and better and more intensive communication.
Ambidextrous organizations are characterized by operating efficiently in business operations and flexible response to market opportunities and market changes at the same time. The trick is to adjust the balance, within one's own company, between those two worlds.
Since digitization is rapidly boosting the speed at which companies are transforming, good leadership also means looking beyond hard and measurable targets, with the help of an additional culture-changing "coordinate system." In other words, success increasingly also needs to be evaluated in terms of the "how": How innovative am I? How can I enable collaboration and the flow of information? How can I enable others to develop?
In the digital age, leadership is ultimately a question of inner attitude. Am I willing to change, and do I really want to work actively to help shape change? Managers who can answer these questions with a resounding "yes" can certainly afford to stay relaxed about Work 4.0 and its pressure for change.