1 Digitalisation: How It Affects Leadership in the Workspace

Digitalization is being described by many as a “global megatrend that is fundamentally changing existing value chains across industries and public sectors” (Collin, 2015). When listing long economic waves, expert Michael Vogelsang stated, “after the steam, steel, electricity, and petrochemical revolutions, network-based digitalization is the driving force today on the stage of business and private life” (Vogelsang, 2010). Fundamentally, digitalization can be defined as the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.

Now that we have defined its precedence, to understand how digitalization affects top management leadership, we need a clear definition of the different forms of leadership and their characteristics, as defined by an expert in leadership studies, Bernard M. Bass, in his book Transformational Leadership (Bernard M. Bass, 2006), as well as the characteristics of digitalization that affected the fore-mentioned leading styles.

2 Different Leadership Styles:

2.1 Value-Based Leadership

Value-based leaders lead through morality, empowerment, and followership (Yukl, 2012). They empower the organization to achieve its overall goal by communicating their visions and encouraging the workers.

2.1.1 The Four Key Characteristics of a Value-Based Leader Are:

  1. Integrity
  2. Trust
  3. Listening
  4. Respect for followers

2.2 Transformational Leadership

Transformational leaders view the organisation as an entity in which one can induce change through encouragement and motivation (MacGregor, 1978).

2.2.1 The Four Key Characteristics of a Transformational Leader:

  1. Idealised influence: A leader that serves as a role model to the followers.
  2. Inspirational motivation: A leader who remains inspirational and motivating to lift their team’s spirit and challenge their co-workers.
  3. Intellectual stimulation: A leader who encourages the input of their co-workers without destructive criticism.
  4. Individualised consideration: Leaders teach and coach while paying special attention to followers’ wants and needs.

2.3 Authentic Leadership

Authentic leaders develop the perspective that to truly impact and be of benefit to individuals, corporations, nations and societies; authentic leaders must possess inner characteristics beyond transformative and charismatic leadership (Copeland, 2014)

2.3.1 The Four Key Characteristics of an Authentic Leader:

  1. Self-awareness: A leader that seeks feedback from their followers. The leader gains inner insight through exposure to others (Kernis, 2003)
  2. Relational transparency: A leader that instils trust and promotes involvement by sharing their appropriate feelings, thoughts and information with others. (Kernis, 2003)
  3. Balanced processing: A leader that makes objective data-analysis-based decisions (Kernis, 2003)
  4. Internalised moral perspective: A leader who is guided by values and moral standards who stands against a group’s social pressure (Fred Walumbwa, 2008)

Now that we have defined the leadership styles, we will define the characteristics of digitalisation that affect the previously mentioned leadership styles.

3 6 Characteristics of Digitalisation

  1. Interconnectedness and integration: the sharing of knowledge and practices that drive productivity, sustainability, and quality in business environments, as well as promote creativity, innovation, and participation among co-workers (Nachira, 2007).
  2. Diminishing time lag and abundance of information: Digitalisation has resulted in shorter decision-making timeframes, increased information speed, and real-time organisational management (Bounfour, 2016).
  3. Increased transparency and complexity: As organisations become more complex, further transparency is needed to manage organisational transformation (Kakabadse, 2011); (Rogers, 2016)
  4. Hierarchy removal and dissolving of personal barriers: George Westerman, an MIT research scientist, introduced the notion of “reverse-mentoring programs” (Westerman, 2014). These programs enable top management and senior executives to learn from the younger generation by diverging from formal and professional barriers and corporate positions in the company.
  5. Decision enabler and integrity enhancing: Digitalisation enables faster decision-making processes, from strategic decisions in the corporate boardroom to consumer purchase decisions.
  6. Humanising effect: According to David Rogers, an expert in digital strategy, digitalisation enables humans to interact, communicate, and interlink more easily through virtual platforms.

These characteristics will now be used to analyse the effects of digitalisation on the three top management leadership styles.

4 Leadership in the Digital Age

4.1 Value-Based Leadership

  1. Integrity: Most of the leaders interviewed highlighted integrity as a core attribute for leaders to be firm and strict about. (1) Interconnectedness, (3) increased transparency and (5) decision-enabling characteristics of digitalisation. Utilising the interconnected nature of technology, leaders today can show strong integrity and be more transparent with their vision and values. However, although digitalisation can act as an integrity enhancer, it also enhances the pressure on the leader and the possibility of scrutiny through increased transparency.
  2. Trust: Most leaders interviewed stated that they shared the privileges and responsibilities of the organisation with their followers. However, trust was now between the leader and followers and between the workers, and digital systems were utilised to enable shared and co-created leadership. This allowed the leaders to humanize their behaviour to their followers, gaining the groups’ loyalty, trust and influence. (4) Hierarchy removal and the (6) humanising effects of digitalisation manifest themselves in these situations.
    “A document [for a client] can now be sent back and forth seven times before lunch. It quickly gets finished and onwards to the client. Digitalisation simplifies good business; we can provide customers with quick service so that they can move on and agree with all the other parties and satisfy them. This creates trust, and it’s amazing how things flow, and the whole business works better.“ – Leader G
    The (2) diminishing time lag and abundance of information make instilling trust easier by swiftly delivering complex analysis and legal documents, as Leader G describes.
  3. Listening: Leading in today’s digital climate puts pressure on gaining insight within and outside the organisation (Westerman, 2014). Leaders need to have the ability to understand and manage the abundance of information and adapt accordingly. Digitalisation allows for easier, faster communication through virtual platforms. These platforms encourage leaders to listen to their followers and share information quickly. (1) Interconnectedness, (6) humanising effect, and (2) Diminishing time lag and abundance of information are contributing factors of digitalisation.
  4. Respect for the follower: Leaders empower their followers and encourage them to follow and internalise values, resulting in a broader and more co-created leadership within the group.

“I think that as part of digital leadership, you must understand that you cannot preserve what you have, but you must be willing to change and dare to ask questions. Leading and learning your way forward. I’m quite fond of explaining through a rather broad narrative, why are we here, what is the point of going to the office every day, if everyone understands the story then there is less need for control and more for empowerment.” – Leader H

The complexity of generating ideas is solved by the encouragement and empowerment of the staff to co-learn and co-create initiatives in diverse groups (Iansiti and Levien, 2004). (1) Interconnectedness and
4) Hierarchy removal is a self-evident characteristic that advances the co-creation between employees. Leader H also stressed how narratives (5) enabled the decision-making of the individuals in the organisation: if everyone could self-guide their decision-making after the values and narrative set by the leader, the organisation would be more efficient.

4.2 Transformational Leadership

    1. Idealised influence:
      Through increased transparency (3) and (2) abundance of information, several leaders found alternative ways to remain idealised influencers in the eyes of the followers: What people like about my leadership through the reviews is that I am available and non-controlling.
      “I let people run with their ideas, which creates trust and admiration. I have no difficulty putting my foot down and saying we do this now. It’s probably a combination of factors of indirect influence and encouragement that enables them to act with very great freedom.” – Leader H
    2. Inspirational motivation:
      “I come from the world of hockey. To achieve something together, I set the scene, then step back. You have to create an environment where you can tell them that you have to work on all seven days of the week, and that’s no problem. In my previous roles, I have led teams of people from different countries without ever meeting them in person. Digital leadership then becomes about being honest when setting the goals, and letting the guys apply self-leadership.” – Leader J
      In Leader J’s case, (5) decision-enabling and (3) increased transparency characteristics of digitalisation empowered his motivational range through technological and digital means, simplifying the process of motivating and clarifying the higher work purpose for the employees. Several leaders emphasised this feature as a crucial part in the negotiation of commitment (Bass and Avolio, 1994): by co-creating the vision and its fundamental structure with the employees, the shared vision was no longer a hollow document constructed by top management and the executives, but a living document, embodied in most of the staff.
    3. Intellectual stimulation:
      “Corporate culture is A and O in this digital climate. If you don’t foster a way of being where everything is up for discussion, whether you’re a new employee or the big dog chief, consider your organisation doomed. Before, management wasn’t interested in what people on the floor said; now it’s the opposite, and we crave the intel that our employees have about the business” – Leader B
      (4) Hierarchy removal, dissolution of personal barriers, and (2) diminishing time lag were important aspects of managing organisations in a digital age, according to Leader B. With fewer hierarchies and barriers, intel could be gathered and shared much more quickly (Collin,2015). With the possibility of real-time, second-by-second market analysis, discussions and implementation of tasks, digitalisation has revolutionised the whole organisation’s business (Korhonen, 2015). Everything according to Leader B was now in real-time, discussions between the leader and employees were no longer aspects of intellectual stimulation through safe environments and discussions, but part of the co-created organisational decision-making process (Chew, 2013). Suggestions and discussions were now used for direct actions.
    4. Individualised consideration:
      In contemporary organisations, digitalisation has now lifted the soft side of management, according to the leaders, through its (1) interconnectedness and (6) humanising effect. Four of the most senior leaders had felt a strong shift from previously being distant mentors and now being on more equal levels with the staff, showing vulnerability through, for example, openness regarding their lack of digital competency.
      “People often feel shame about their lack of digital skills, that they are unskilled or unworthy because they lack digital competency. This is a saddening fact, as digitalisation also makes us very lonely. Even though you have the whole world at your screen, I always share my embarrassment regarding this with my employees, to level with them so they know it’s normal.” – Leader F

4.3 Authentic Leadership

  1. Self-awareness:
    The first feature of self-awareness demands a leader to understand and see meaningfulness through dialogue and improved inner insight. The speed of digitalisation, i.e. (2) diminishing time lag of information and (3) increased complexity through transparency, aided most leaders in the process, nudging them into a (6) humanising, more open and honest leadership style:
    “Digitalisation brings out that in me: nowadays, I almost can’t be anyone but myself at the office, at clients’ offices, or anywhere else. It will shine through if I’m trying to be something or someone I’m not, and people will quickly lose respect for me as a leader. I have to be me fully, with my strengths and weaknesses.” – Leader D.
  2. Balanced processing:
    According to the leaders, digitalisation has very strongly enhanced this feature of authentic leadership (Rogers, 2016). The perspective of engaging in rigorous data analysis to aid decision-making was accepted as a key factor by all leaders interviewed. However, most leaders confessed to ultimately basing their decisions on intuition and gut feeling.
  3. Relational transparency:
    Digitalisation, with or without their consent, forced or enabled them to be more honest, transparent and straightforward as leaders. According to the leaders, (4) dissolution of personal barriers, (6) humanising instead of idealising of leaders and overall (1) interconnectedness have led to a more effortless and genuine leadership style. Drawing a comparison to a pre-digital era, 7 of the 13 leaders mentioned that it was no longer necessary to uphold a certain leadership persona and that the “The armour of leadership”, as described by Leader E, was not necessary anymore:
    “When I took on the role of Company X, it was a national undertaking. I made a personal decision, knowing that I wouldn’t be able to take off this amour or persona for several years. It was one of the toughest decisions of my life, but at the time, it was necessary to be respected and lead through the change. Today, the same challenge can be tackled and solved with ingenuity and honesty instead, thanks to the openness of the digital era”. – Leader E
  4. Internalised moral perspective
    The increased transparency, coupled with the interconnectedness of tools, processes, and methods to virtualise one’s leadership, was used to further align their own values and morals with implemented actions and to control that the employees mirrored this internalisation.

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