Leadership competencies and the technological revolution: do's and don'ts

The technological revolution has profoundly changed the way companies operate and the arrival of new technologies, new approaches to leadership and modern corporate cultures, is urging leaders to adapt. Yet, a report published by McKinsey Research Institute reveals that less than a third of companies have successfully completed a digital transformation .¹

This challenge has proven particularly difficult for organisations that have remained attached to a traditional style of management. In fact, studies show that companies whose management have adapted to the age of technological revolution are now reaping the benefits of digital transformation .² This is contrary to those who are avoiding undertaking a digital transformation. Thus, it is clear that management plays an important role in a company's successful digital transformation.

When it comes to digitalisation, management transformation has become a discipline in itself. The rise of new technologies has made it essential to integrate the human factor into the process, and take its impact on digitalisation into account, and vice versa. 

In this article, discover the role of management in technological revolution, best practices for adoption, and the pitfalls to avoid.

Leadership competencies in the age of technological revolution

Traditional management has always emphasised the importance of leaders having technical skills, or otherwise known as "hard skills". In the digital age, whilst "hard skills" are still required, management competencies have been broadened to include "soft skills" too. These have become essential to the role of a manager. 

Let's see what these "soft skills" are and why they are important. To be successful, leaders should:

1. Be proactive and flexible

If these qualities were important before, in the technological revolution, they have become essential. In light of the constant arrival of new technologies, competitors, and market trends, leaders must be able to anticipate the unexpected and be ready to react swiftly. Proactivity and flexibility are thus crucial in order to keep companies in the race for growth.

The ability to lead change is a decisive factor that, according to a report published by Right Management, 91% of human resources managers account for in recruiting a leader.³

2. Be digitally-savvy

For today's modern leaders, knowledge of how new technologies work is mandatory. Knowing and understanding the different channels available, as well as the various techniques on data collection or analysis, are important prerequisites for any leadership position. It helps leaders to understand the connection between market forces and technological revolution, and allows them to drive their organisations towards digitalisation much faster.

An MIT and Harvard Business Review report, based on a survey among 1,000 CEOs, reveals that 90% of the directors interviewed believe that digitalisation significantly changed their businesses. Only 30%, however, believe that they possess the right skills to lead their businesses into the digital world.⁴ A reason for this resides in the fact that the majority of CEOs come from a generation of executives that is not familiar with digital. It is, however, possible for all leaders to develop digital skills and become digitally-savvy.

3. Be a clear communicator

Communication was often compartmentalised in the past, with leadership positions removed from organisational teams in hierarchical environments. This barrier is no longer possible in the age of technological revolution.

Communication tools, like social networks, intranet and others, offer leaders the opportunity to build a strong network within their company, and involve each employee in the transition towards digital. Clear communication of the company's objectives and strategy, of the development of new products, and of new business models, enable the entire company to feel involved in the digital transformation. This leads teams to greater efficiency and helps them develop the skills required to carry out successful digital transformation projects .

Becoming a good communicator is beneficial in two ways: 

• for you as a leader, because it helps you guide your teams in the right direction 
• for your teams, because they feel empowered to learn so that their work makes sense

Communicating is also the best way to deal with sudden shifts in the market. For example, in times of pandemic. In a recent study, McKinsey asked business leaders around the world how they are coping with the recent disruptive events of 2020.⁵ Many leaders spoke of micro-habits - daily routines and various ways of working - that they have adopted to help them and their companies weather the health crisis and emerge stronger. Some of these micro-habits are related to new ways of communicating between them and their teams. A few examples are: unfiltered information, more frequent and direct contact with the teams, strategy updates, more personalised communication to foster resilience, symbolic acts (online coffee breaks or sessions to exchange ideas or feelings about the current events), and many more.

4. Be a visionary

Technological revolution creates many opportunities for businesses. Leaders who succeed in being visionary stand out. But while not every leader can be as visionary as Steve Jobs, for example, knowing how to innovate, inspire your teams, and gain the trust of your clients, is a great asset.

In order to integrate their vision throughout the entire company, a leader should have a clear digital transformation strategy and should know how to implement the necessary changes. In this regard, one of the most important factors that aids transformation is corporate culture. 

Some companies are more resistant to the digital switchover than others. This depends on the size of the company’s appetite for change is, and as mentioned before, on its culture. The results of a recent study by CIO.com show that corporate cultural changes often take second place to technological changes. According to the same study, it seems that digital transformation has profound influence over the way teams approach organisational projects.⁶

The management's role in the technological revolution is to create an authentic digital culture within its teams. More so, as research conducted by the Boston Consulting Group reveals, around 80% of companies that favour a change of culture towards a digital culture have shown superior performance.⁷ The title of this research is quite explanatory: "There is no digital transformation without a change in culture". A leitmotif that is most relevant for leaders in the technological revolution. 

5. Be empathetic

A Harvard Business Review study states that 80% of the leaders surveyed consider empathy to be a factor of success in a fast-paced business world.⁸

A leadership style based on aggression, individualism, and competition will result in a counterproductive way of working. In fact, for teams to adapt to change and keep to high levels of motivation, resilience is a competence leaders should actively promote. Gaining the trust of employees is critical in an age marked by the technological revolution, and it helps set the path to success.

6. Be agile

Having a digital strategy is essential to succeed. But to prevail in your digital transformation process, you need to be agile too. Embracing agility within organisational structures is ideal for traditional companies, especially as they embark on digitalisation. By becoming agile, these organisations become much more flexible and responsive to market shifts. In fact, according to Jeanne Ross, a researcher at MIT, what made them thrive in the past will most definitely not be the same as what will make them triumph in the future.⁹

Agility brings together all the soft skills outlined above. But to quote Dr. Brigit Koening, CEO of Allianz Santé: "It's never over. There are always changes and more to be done."¹⁰ Agile leadership is thus a prerequisite in order to lead an organisation to success in the technological revolution. 

If it is of utmost importance to know the best practices for agile leadership in the technological revolution, it is as important to know the pitfalls to avoid.

What makes a good leader in coping with the technological revolution: pitfalls to avoid

In view of the changes brought by the technological revolution, the role of management is more important than ever. Leaders are not only responsible for preventing the slowing down of digitalisation, but also need to lead their teams towards achieving the company's goals.

Many leaders continue to apply outdated techniques in a business context that is no longer appropriate. Even though the experience of previous generations is still an asset, the shift to digital asks for increased adaptability and flexibility. The role of management is paramount and, in cases where it is executed incorrectly, costly.  

To prevent such costs, let's look at the pitfalls leadership should avoid. 

Focus on quality instead of quantity

In the technological revolution there are many tools available, a large number of which are redefining the style of leadership. A more open style of communication encourages the sharing of ideas, automation leads to the vanishing of rudimentary tasks as well as adding fluidity to the following up of projects. 

As a result, leaders no longer need to be aware of the number of hours worked, but rather made aware of the results. The culture of quality and flexibility as opposed to the culture of quantity is a source of motivation that leaders must put forward to their teams. To enable this, the role of management is to measure the productivity of a project, and its progress, rather than the time spent on it. This helps define the real value the project brings to the company and removes artificial measures of success, such as clocking in and out. 

Put people before technology 

It may seem like a paradox, but people play a leading role in digital transformation. Each individual has their own vision and beliefs. Some may even be opposed to the digital switchover and the risks of introducing new digital tools. 

Imposing new technologies on your teams without considering their openness for change, their technological knowledge, and without training them, is an error that can prove costly. If companies do not have the time nor the means to spend months on transforming their corporate culture before digitalising, then the management's role is to support this change by implementing projects, training or workshops, as and when needed, to guide teams naturally towards digitalisation. 

Avoid working in silos

Organisations that operate in silos are no longer compatible with the technological revolution. In times like these, it is crucial for leaders to think of their company as a whole. Silos within departments belong in the past. For example, if both Marketing and IT departments are undergoing transformations, it is imperative that both departments communicate and collaborate. Managers must enable this collaboration to ensure successful digital transformation.

IDC, a market intelligence company, explains that 70% of companies that are siloed fail to achieve digital transformation because of lack of collaboration, integration, sourcing or project management.¹¹ This shows how necessary it is for any leader to act as a conductor and lead their teams to a balanced, harmonious way of working. 

Delegate effectively

It is almost impossible for a leader to bear the full weight of digital transformation alone. Knowing when and how to delegate is important as it will help you concentrate on those tasks that are your sole responsibility. It will also free up time for you to give more attention to your teams. 

By delegating, leaders provide their teams, and their companies, with the best conditions for a successful transition to digital. A Deloitte study explains that 40% of Chief Information Officers are leading the digital transformation of their companies.¹² The role, despite it not having a main focus on digitalisation, supports management in the company's digital endeavour, and promotes interdepartmental collaboration.

The technological revolution is changing the business world, and with it, the role of management. Traditional methods of management are no longer compatible with today's fast-paced business world. It is, thus, not easy for leaders to keep up when using these leadership methods. Their role is fundamental in the swift transition of a company to digital, and without management's strong, knowledgeable and digital oriented leadership, chances of success are slim. There is little doubt that a new type of leadership and good practices are keys to triumphing in the technological revolution.

¹ 'Unlocking success in digital transformations', McKinsey, Octobre 2018.

² 'The case for digital reinvention', McKinsey, February 2017.

³ 'The Most In-Demand Skills In Digital Leadership', DMI Blog.

⁴ 'Digital Leadership Is Not an Optional Part of Being a CEO' HBR, Decembre 2017.

⁵ 'The toughest leadership test', McKinsey, May 2020.

⁶ 'Successful Digital Transformation Begins with a Cultural Transformation', CIO, June 2019.

⁷ 'It’s Not a Digital Transformation Without a Digital Culture', BCG, April 2018.

⁸ 'Making Empathy Central to Your Company Culture', HBR, May 2019.

⁹ 'For true digital transformation, businesses must embrace agility', MIT Blog, January 2019.

¹⁰ 'Agility Is The Key To Accelerating Digital Transformation', Forbes, April 2017.

¹¹ 'Digital Disruptors Leverage Strategic Governance and Vendor Sourcing and Management Practices: Survey Findings', IDC, Octobre 2018.

¹² 'Today’s CIOs, by the numbers: 9 telling stats', The Enterprisers Project, August 2018.

Ioana Bota

About the author

Ioana's journalistic background and experience as a digital marketer fuel her curiosity to know more about digitalisation, meeting management and business agility.