In the old (pre-digital) world, roles were clearly defined. Leaders were managing and “leading” employees and gave them decision-making powers. This role – and also its power and the associated claim to leadership – was explained by the position within an organizational hierarchy, the privileges and status symbols associated with it as well as expert knowledge, leadership experience and networking (“Old Men’s Club”). The steps taken up the career ladder were reflected in budget responsibility and available resources and were framed in a top-down corporate culture.
One thing among many that the digitalization and the associated transformation of analog processes calls into question is the self-image of managers. According to Tim Holt’s definition, digital transformation brings about the transition from an organizational structure based on performance and hierarchies to companies in which collaboration and co-creation are lived. Leadership therefore means helping the organization to become open to new forms of collaboration and goal achievement.
The concept of management and the understanding of leadership, which has developed and consolidated in companies over many years, is put to the test. How is management adapting to meet the demands of an increasingly digitalized work environment that is changing more dynamically than ever before?
When the importance of hierarchies, status and expertise changes, what will become of the leadership culture in companies? Does “management” by superiors still need to be provided at all? Or will only collaborative, self-organized teams act in the future? Is it enough to define roles and tasks? What does “leadership” mean in the digital environment?
The fact is that hierarchies represented in rigid organization charts are assigned to the old, predigital world. They are outdated.
Digital business models often require action across (organizational) boundaries and structures. Company boundaries disappear completely or increasingly dissolve. By working in networks, in different value creation systems and in cross-organizational collaborations, managers have to revive their claim to leadership: Anyone in a network who has nothing to offer to support success of its members is seen as superfluous.
Moreover, the world is becoming more volatile, uncertain, complex and ambiguous: VUCA sends its greetings. The early deceased psychologist Prof. Dr. Kruse spoke of the complexity trap. Planning, e.g. of actions, resources, budgets, no longer works as it used to. Planning phases are becoming increasingly shorter, project responsibility is being shared. And this is an enormous challenge for managers. In the past, employees could expect concrete answers to questions and challenges from their bosses. For decades, experts have been fixed points of contact in companies due to their specialist knowledge. Today, with a radically shrunken half-life of knowledge, both are becoming increasingly unlikely.
Where in an environment without permanent contact points is the framework located that creates identity? Who or what do people in companies identify with? Are corporate culture and boundaries still perceptible to the individual? Is it the conglomerate that finances the current “project”? Or is it the goal or result for which you are working? Is it the colleagues who are currently working in the “team”? The challenges to the structure and culture of the working world in the digital age are growing and changing the “new” definition of leadership.
Trust & Empowerment – still the two supporting pillars
What remains – even in the age of digitalization – are the two cornerstones of a successful corporate culture: trust and decision-making authority and thus the empowerment of employees, i.e. trust and empowerment.
Three very specific tips help corporate culture to grow in digitized working environments. In parts, these come from the so-called “agile manifesto”, which has massively changed complex development processes, such as software projects, in a results-oriented acceleration.
1 The customer takes it all,…
All understand the “why” and see in this one – namely their – meaning. In everything the team does, the customer takes center stage. Together established values support collaboration and interaction. The goals must be clearly understood and interpreted, so that alignment prevails and self-responsibility becomes possible. The teams build on diversity, i.e. they are composed of people who can differ and complement each other in age, professional qualifications, gender and cultural heritage. Transparency is the basis for trust and creates an atmosphere in which mistakes can be made in order to learn from them. This fosters courage, creativity and a willingness to take risks.
2. …we agree on resources and procedures…
The group develops a common understanding of best practice. The self-discipline and self-organization of each individual ensures that skills are brought in and resources released when and where they are needed. A toolbox of methods, processes and techniques, mastered by all, supports collaboration.
3. …and practice effective communication across borders.
Communication is the key to effective collaboration. It must be made possible – the choice of the appropriate form, medium, language or technique is of secondary importance. Communication takes place in both directions, i.e. it demands sender and receiver qualities. It creates access to the information necessary for the work, motivates and mobilizes people to achieve common goals in teams. This also and above all includes personal communication and mutual inspiration.
Therefore: Don’t be afraid of digitalization!
Leaders who can not only cope with change, but also drive it forward, who communicate across structures – with open, outward-looking and inward-looking eyes – will absolutely be needed in the digital environment.
The successful executives in the digital age
- develop tomorrow’s leaders
- create an atmosphere of trust and security
- formulate goals with the team, and the path to them
- promote collaboration and experiments that can also fail
- help to clear obstacles and difficulties out of the way
- listen, coach, support, motivate, animate
- allow people in the team to take responsibility
- make mistakes themselves and talk about them
- observe their working environment carefully, provide resources and open doors,
- and together with their team they are looking forward to the successes
And very important:
- They are self-reflective, open and curious about people and the environment.
Lippmann International LLC: Brigitte Lippmann helps with talent management and personnel problems, such as succession consulting, transition coaching, globalization support, diversity, leadership development, cultural expatriate training and talent pooling.
be@change beat schori managementberatung & coaching Ltd.: Beat Schori, the experienced consultant, guide and lecturer with many years of expertise in change management, culture change and integration projects, accompanies and supports companies in cultural change.
 Tim Holt, CEO Siemens Power Generation Services from Roland Dieser’s CFFO White Paper; Digital Transformation Challenges in Large and Complex Organizations, November 2018
 Peter Kruse: The leading power is shaken. Youtube Video, 2014
Pharma-, Medtech-, Biotech- und Diagnostic-industries are experiencing ubiquitouschange. Strong silo-mentality and tough regulatory forces in the healthcare sector create challenges for employees and leaders alike. In addition to that, trends such as reduced innovation in R&D departments and mounting digitalization of products and processes are increasing the complexity in the work environment. To solve the tension between the constant pressure to change on one hand and the rigorous structures on the other, organizations are looking for tools and methods that increase innovative thought and action.
How can this be successful without overtaxing the change readiness and ability of the organizational culture nor underestimating the impact of existing rules and regulations? Potentially one key to solving the riddle is a school of thought that came up during the beginning of the Internet-age: Ambidextrous Leadership. In combination with clear expectation management, this leadership style can become a lever for high agility, which is needed by the innovation-dependent healthcare ecosystem.
The concept of „Ambidextrous Leadership“ is not new.
It dates back to the time when traditional “brick and mortar” companies were struggling to become operational in the online world at the advent of the Internet age: “Online” was not only new, but different: Changing strategies, new competitors, novel business models, adapted processes, diverse employee profiles. Companies that could manage these two worlds concurrently – as so-called two-speed organizations – were more successful than those who tried to run the emerging online business with the same structures and rules as their traditional business models.
Let sources of Innovation bubble up.
What does that mean in the context of pharmaceutical companies in the age of digitization?
Internal research departments are generating fewer innovations organically. More and more frequently university spin-offs, small research laboratories and start-ups are innovating through leaner organizations and cost structures, shorter reconciliation processes and fierce entrepreneurial drive. Since Big Pharma urgently needs these innovations for market growth, they acquire those smaller entities or forge partnerships.
In order to ensure that a newly identified source of innovation does not stall, it takes leaders who can master [read: foster, harvest and manage] the diversity of both worlds. To be agile means for Leader to do both:
- co-create, think and act within the culture of the co-operation partners
- keep an eye on how the idea, the prototype, the orphan drug becomes not only a marketable product gaining approval but also meets the commercial expectations of Big Pharma.
Successful leaders manage to achieve this “ambidextrousness” by a high degree of agility in their thinking and actingwhen working withthe differences in e.g., the speed of processes or mindsets of employees.
Expectation Management: The “Knowing-Doing-Gap”
We all know that clearly communicated expectations greatly contribute to smooth operations. Nevertheless, many have a hard time communicating expectations of results to be achieved, lived values and, to some extent, behavior in clear, simple and open terms to our environment. Fixed processes and lengthy planning horizons are often ineffective in today’s environments and are replaced by a results orientation, which is guided by values and cultural norms. For this to work in the daily operations, [some] managers have to leave their comfort zone and express concretely, whatthey want to see achieved, without intervening too much in the technicalities of ‘howit is achieved’. Then innovation can unfold.
9 activities leading to more agility for [healthcare] leaders
Simple actions can help us to become more ambidextrous and hence create more nimble organizations – here a few ideas:
- Focus on a goal that the team develops, shares and tracks.
- Monitor the market continuously, recognize changes in time and respond promptly
- Role-model changes with your behavior – do not just trigger change, [ie: do not stick rigidly to plans, but respond flexibly to suggestions and market changes]
- Demonstrate, promote and demand high-quality thinking [and thus achieve better results]
- Proactively and courageously ask for feedback [and build an effective feedback culture]
- Inspire and motivate others to bring their best self to work [Integrative management creates listen-up-speak-up cultures]
- Accept that leadership exists throughout the organization [if you give employees the freedom to act so they feel engaged, empowered and committed]
- Be open to being influenced and persuaded by others [because those who are directly confronted with the problem often have the best solutions – regardless of title or status]
- Allow errors as long as they are used as a basis for improvement and learning processes [to get into the fast pace mode of testing-learning-change-testing]
Conclusion:Simple actions ofagility allow executives to be more innovative in highly complex work environments, bridge the gap between the “old world” and digital transformation, between traditional drug selling and patient focus, between clinical drug approval trials in mass markets to personalized and digitized therapies, all the way to individualized drug manufacturing with 3D printers.
Start today with being more explicit in your expectation setting around what needs to get accomplished!
Based on hypotheses of the Agile Business Consortium – Culture and Leadership Workstream April 2017 https://www.agilebusiness.org/resources/white-papers/culture-and-leadership-the-nine-principles-of-agile-leadership
Pharma M&A: Agile Shouldn’t Mean Ad Hoc, McKinsey and Co., (Accessed Aug 2018) – https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/pharma-m-and-a-agile-shouldnt-mean-ad-hoc
see also “Innovation, Diversity & Market Growth”, Center for Talent Innovation, 2013 – http://www.talentinnovation.org/_private/assets/IDMG-ExecSummFINAL-CTI.pdf
Healthcare is not the only industry facing many changes – call them globalization, digitalization, governmental and regulatory interference, access and reimbursement challenges, artificial intelligence advances, multifaceted workforces, “you-name-it-4.0”,… – it seems that the industry with dealings with one of the most precious goods – health – has more than its fair share of disruptive and continuous change.
And that is exactly it: Decades ago, change “happened”. It had a beginning and an end. Thought leaders like Kurt Lewin explained to us then, how to deal with that kind of change: unfreeze – change – refreeze. And today? Complexity and speed challenge us on how to survive, navigate and lead change – not once but continuously. No more refreezing and settling calmly into the new stable reality to take a break and rejuvenate after the energy-sapping “change”.
Especially leaders of others need to look at the environment in which they operate and then drive towards the mission and results. As the VUCA world (A world that is Volatile-Uncertain-Complex-Ambiguous) intermingles with a BOCA world (a world described as having Blurred boundaries, Overloaded with more work than people can manage, Complex, and Addicted to technology and continuous stimulation from a knowledge-based economy), leaders need to excel at a) building resilience in themselves, b) inspiring others to prevail through ambiguity and c) navigating the environment to select the most viable options. A deeper look into these three elements of mastering change in the 4.0 era:
1. Building resilience:
Everybody goes through the “Emotional cycle of change” (based on Kelley & Conner or the John Bridges Model) when faced with transitions. The question is not “if” but “how fast and with what repercussions”. As Robert Kegan already described in his book “In over our heads”, the human inner make-up is not really ready to cope with the magnified and accelerated reality we live in today. Hence, what can be done? Leaders can work on their own resilience. A model based on Conner Partners looks at helpful characteristics of resilient individuals: Positive (having a sense of self-assurance that is based on a view of life as challenging but filled with opportunity), organized (building plans, estimating effort, creating processes enabling effective collaboration, and displaying the discipline to apply these approaches consistently), proactive (moving into action even when the pieces aren’t all in place), focused (developing structured approaches to managing change), flexible (demonstrating a special pliability when responding to change).
If leaders find little ways each day to build up their own resilience, they will get through situations easier and hence have more energy left over to lead their organizations more positively through the transition towards the future.
2. Inspiring others:
Once leaders are more “resilient” themselves, they can spend more focus and energy on helping, leading, inspiring others to be effective during a time of constant ambiguity. They need to show a clear vision, make seemingly contradictive paradigms work for their teams and navigate through the challenges that a VUCA (or also BOCA) environment present. What helps is to create a “listen-up-speak-up” culture by leading inclusively and hence to harness the best thinking of the team. The Center for Talent Innovation makes a powerful case for how inclusive leadership (the demonstration of particular leadership attributes that create more open-minded work-environments in which more people are willing and able to speak up and being listened to) increases our ability to grow in the market in “Innovation, Diversity and Market Growth”. Pivotal to be successful in a changing setting are engaged people, more ideas and better decisions.
3. Navigating the environment:
This is meant beyond the so-called organization. While hierarchical structures and functional silos fade, networks and project work gain in importance. The ability to communicate and collaborate across all those fading boundaries paired with strong analytics is key capability to access relevant information and insights. In the highly ambiguous, fast-morphing settings of most business endeavors, leaders good at identifying options, leveraging gained insights for risk evaluation and acting on the “best” option will stand out: With better results, exceptional talent and sustainable approaches (see related source: Dean Stamoulis: How the Best CEOs Differ from Average Ones, November 15, 2016, HBR).
Based on this, here are four ideas on how to become “proficient” in Change 4.0:
1. Acknowledge that everybody faces and hence needs to proactively deal with three levels of “change” that trigger longer terms transitions – the personal one, the one on the immediate work team and the larger one that includes competitors and the value chain surrounding the own product/service.
2. Increase personal resilience to be an authentic rock in the stormy BOCA-sea for the team(s) and organization.
3. Improve ability to inspire by communicating a clear vision and by making the world less VUCA for the teams.
4. Develop self (and others) by managing a variety of functions and situations, by getting used to making solid risk-assessments and decisions based on limited information, and by becoming a collaboration expert in real, virtual and social media settings.
Summary: Only when leaders are so agile, that they can positively advance or adapt to “New-ness”, when structures, processes and culture truly allow to “try-fail-regroup-try-different” without punishment, then “change and transitions” become the new normal and become sustainable for both – organizations and the people that form them.