Digital leadership in a family business

Digital leadership in a family business or who am I and if so how many?

What is digital leadership and is there such a thing at all? And what is different about leadership in the digital age? We always talk about cultural change, new forms of innovation, thinking in networks, multidisciplinarity, customer focus, prototyping, start-ups and all the terms that come to mind when it comes to digital transformation. Often, however, the idea of change tends to focus only on the workforce and people forget that change starts at the very top of the management self-image. And often it just ends.

It’s about the central role of innovation, more precisely business model innovation, and about a world in which success is the result of iterative trial and error, improvement and rejection. Learning and looking at a complex problem from many perspectives and developing creative solutions using the possibilities of new technologies, that is what it is all about. In a nutshell, it is about exploring a future that needs to be creatively designed in a constant reality check of what works and what doesn’t. No business case, accurate to ten percent, before the start of the project that guarantees a safe decision, no clear quantitative key figures according to which one can control and punish. Leadership is more about asking the right questions, finding a common vision, bringing together the right talents and then orchestrating them cleverly. Leadership is more like standing on the sidelines and enjoying the excitement of a World Cup game than being in a position of authority and always knowing the right answers. And then translating these into clear instructions for the subordinates.

Especially in family businesses it can be an eye-opening insight if the patriarch, to whom everyone has always looked up because he always knew what to do, suddenly no longer has any clear answers when it comes to digitalisation. First he/she has to admit this to her-/himself. But this is not a flaw, not a weakness, but a manifestation of the demands for a new leadership self-image and a confrontation with exactly these demands in the current reality. In a nutshell: the clash of a leadership self-image with the demands of the new digital world. 

In the digital age, good leadership means giving up authority. This may seem paradoxical at first. Leadership through trust. Trust in the innovative power of talented people who can collaboratively solve complex problems, such as the design and implementation of digital business models, better and more productively than an experienced CEO can. For example, because the knowledge and technology needed to do so may only be two years old. Strategic decisions are made in a participatory manner, involving different hierarchical levels and specialist departments, and are also made faster and more agile. In iterative test cycles, these decisions are tested as hypotheses early on in the market. This also means giving up control. And all this in the knowledge that success can no longer be clearly predicted. Dealing with this uncertainty is a further challenge for management self-conception.

Responsibility is distributed in trust in the talents, in the quality of the team that has been put together. But haven’t we learned somewhere that responsibility is not divisible? Actually, it isn’t, because in the end the full responsibility still lies with the boss. At the same time, he/she gives the team the certainty that they don’t have to be afraid of making mistakes and driving the cart right into the wall. Wow! That takes backbone. So disruptive innovation doesn’t work if everyone is afraid of making mistakes. The boss has to be responsible and has to be held accountable at the end if the idea doesn’t fly. That’s why we want to fail early and with little investment and learn to improve or discard the idea without it becoming expensive. Under a carrot-and-stick leadership, no new business models and certainly nothing disruptive will emerge.

Common vision (the emphasis is on “common”) and values, trust, delegation of responsibility, rapid learning and collaboration are the guidelines of a leadership self-image in the digital age. Not because it’s hip, but because it’s simply necessary for the survival of the company in a new digital environment. If you don’t have that at the top management level, then the digital transformation has stopped before it started.

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