Assistant Professor, Delhi Institute of Advanced Studies, Rohini, New Delhi, India.
Modern organizations must respond to an increased pace of the workplace, and the nature of executives’ tasks is increasingly complex. We know that many leadership dimensions have a causal relationship with desirable organizational outcomes, and that the foundational pillars of leadership, such as shared values and vision, talent development, change management, and reward and recognition, will likely continue to drive these outcomes. However, how we lead in these areas is changing. This paper provides a comprehensive analysis of the contribution of studies on leadership and digitalization, identifying patterns of thought and findings across various social science disciplines, such as management and psychology. Specifically, the present article reviews the literature on how the advent of digital technologies has changed leaders and leadership roles.
Either way you look at it, as organizations seek their footing in a turbulent business environment, they require strong leaders at the helm. Senior leaders must not only articulate a vision people can rally around but also create the conditions that enable digital maturity, attracting the best talent and bringing out the best in the talent they attract. Organizations today face increased business complexity and are expected to execute decisions more rapidly and with greater transparency (Mani and Nandkumar, 2016). In order to deal effectively with this phenomenon, organizations are reducing hierarchy and creating “agile networks of teams,” implementing real-time feedback, personalized micro-learning, and artificial intelligence (AI) (Agarwal, Bersin, Lahiri, Schwartz, and Volini, 2018; Pester, Johnson, Stempel, and Van Der Vyver, 2017).
There are many benefits to using agile networks of teams as opposed to more structured, traditional team models. These teams are selected based on each employee’s unique skill set as opposed to the employee’s formal position (Bersin, McDowell, Rahnema, and Van Durme, 2017). The largest benefit is how such a model can help maximize the potential of every employee. Traditional team- work models are rigid, placing people on teams based on hierarchies and formal positions within the organization.
The biggest challenge organizations face when implementing this model of teamwork is determining how best to manage and support their employees, as it can be difficult to manage employees whose teams and responsibilities are constantly changing (Petrucci and Gleeson, 2018). One possible solution to the problem is to use technology that fosters constant communication and encourages feedback on every interaction that an employee has, which is then measured through a network analysis (Petrucci and Gleeson, 2018). Organizations will need to reshape their learning and development to allow for constant, personalized micro-learning. Micro-learning is a learning approach that focuses on relatively small learning units, with an emphasis on developing skills to achieve short-term goals and whatever needs to be done in the present moment, as opposed to trying to learn skills to last an entire career. Given the need for faster, more effective, and more transparent communication, organizations are moving toward real-time feedback. Most organizations currently use a slow and ineffective method of communicating feedback: the annual performance appraisal.
The findings of the latest Eurobarometer survey show the majority of respondents think digitalization has a positive impact on the economy (75 percent), quality of life (67 percent), and society (64 percent) (European Commission, 2017). Indeed, people's daily lives and businesses have been highly transformed by digital technologies in the last years. Digitalization allowed to connect more than 8 billion devices worldwide (World Economic Forum, 2018), modified information value and management, and started to change the nature of organizations, their boundaries, work processes, and relationships (Davenport and Harris, 2007; Lorenz et al., 2015; Vidgen et al., 2017). Digital transformation refers to the adoption of a portfolio of technologies that, at varying degrees, have been employed by the majority of firms: Internet (IoT), digital platforms, social media, Artificial Intelligence (AI), Machine Learning (ML), and Big Data (Harvard Business Review Analytic Services, 2017). These tools and instruments are “rapidly becoming as infrastructural as electricity” (Cascio and Montealegre, 2016, p. 350). At macro levels, the shift toward different technologies is setting the agenda for new mechanisms of competition, industry structures, work systems, and relations to emerge.
At the micro level, the digitalization has impacted on business dynamics, processes, routines, and skills (Cascio and Montealegre, 2016). Across different sectors and regardless of organization size, companies are converting their workplaces into digital workplaces. As observed by Haddud and McAllen (2018), many jobs now involve extensive use of technology, and require the ability to exploit it at a fast pace. Yet, digitalization is being perceived both as a global job destroyer and creator, driving a profound transformation of job requirements. In result, leaders need to invest in upskilling employees, in an effort to support and motivate them in the face of steep learning curves and highly cognitively demanding challenges. Moreover, increased connectivity and information sharing is contributing to breaking hierarchies, functions and organizational boundaries, ultimately leading to the morphing of task-based into more project-based activities, wherein employees are required to directly participate in the creation of new added value. As such, the leadership role has become vital to capture the real value of digitalization, notably by managing and retaining talent via better reaching for, connecting and engaging with employees (Harvard Business Review Analytic Services, 2017; World Economic Forum, 2018). However, leaders need to be held accountable for addressing new ethical concerns arising from the dark side of digital transformation. For instance, regarding the exploitation of digitalization processes to inflict information overload onto employees, or to further blur the lines between one's work and personal life. The knowledge collected in a digital database is highly specialized and still distributed (Kocaturk and Medjdoub 2011) rather than integrated.
Organizational and Technology Trends:
Despite the increasing interest in discussing the relationship between digital technology and leadership, contributions have accumulated in a fragmented fashion across various disciplines. This fragmentation has made scholars struggle “to detect larger patterns of change resulting from the digital transformation” (Schwarzmüller et al., 2018, p. 114). It also suggests that scholars have relied on multiple theoretical models to explain the phenomenon. Indeed, if, on one hand, it is clear that organizations are changing due to technological improvements, on the other hand, the way in which the transformation is occurring remains under debate. Furthermore, due to the fast-changing development and implementation of digital technology, there is a need to continuously update the same.
This article addresses the aforementioned issues by offering a systematization of the literature on digitalization and leadership that has been accumulating across different disciplines, while adopting an interdisciplinary approach and providing a systematization of articles from different fields that analyze digitalization and leadership.
Although most papers adopting a macro perspective reflect on the novel structures of organizations, they tend to underestimate the effect of digital transformation on organizational processes. That is, however, not the case with Weiner et al. (2015), who discuss how the effective achievement of operational goals relies on the fit between strategic planning and information technology, particularly in operationally complex organizations, such as hospitals. Their empirical study shows that digital tools could highly contribute in the planning and monitoring of internal processes, increasing the transparency and accountability across all levels of management, and engaging customers' trust. For instance, the intelligent use of data through sophisticated digital tools, allowed hospitals administrators to lead improvements in decision-making processes and service quality by enhancing the usage of traditional management tools, such as key performance indicators (KPIs), and storage of critical data, namely on infections and diseases. Notably, this study offers empirical evidence on the need to adopt digital technology to develop efficient internal organizational processes and guarantee high quality service to customers. In another empirical study conducted in a hospital, the authors confirmed that the use of digital tools helped leaders solve complex issues related to personnel and operational cost
Nowadays, digital transformation is an unavoidable choice for any company, regardless of size or sector. Leaders cope with new tools on a daily basis and they make decisions according to the data they have access to. Therefore, we highly encourage future research to shed more light on the effect of digital transformation on leadership, both at organizational and individual level. The present article reviews the literature on how the advent of digital technologies has changed leaders and leadership roles. Moreover, it structures and summarizes the literature, considering both theoretical frameworks and empirical findings, and fostering the understanding of both the content of the debate and its practical underpinnings.
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Received on 17.06.2021 Modified on 30.06.2021
Accepted on 11.07.2021 ©AandV Publications All right reserved