Leadership development: If not now, when?

Leadership Development: If not now, when?

May 17, 2024 – The digital transformation of the economy and society brings many new demands on leaders. Therefore, systematic leadership development would be particularly important right now. However, this is often lacking in companies. 

A lot is currently changing in companies and their environments. One thing, however, changes very little: the employee. He still wishes for support and direction – especially as his work and life environment becomes more unstable.

But who should convey this feeling to the employee in everyday work, when almost everything in the companies is on trial? Ultimately, only leaders can do this. Therefore, leadership is becoming increasingly important in the digital age.

Leadership is becoming more important … and must change

At the same time, leadership must change – among other things, because the performances relevant to corporate success are increasingly provided by cross-departmental or even cross-company teams, which often have a hybrid or virtual character.

Furthermore: The “problem solutions” increasingly require specialist knowledge that the leaders themselves do not possess. So they are increasingly dependent on the skills and self-motivation of the employees to deliver the desired performance – also because their areas are more frequently facing previously unknown challenges. Therefore, leaders can less frequently tell their employees “Do this, and we will succeed.” Instead, they must experiment with them, what could be the right solution, and then determine in the process what is goal-oriented. 

Leaders must become relationship managers

How can successful leadership be possible in such an environment? The only viable solution is: Leaders must understand themselves as relationship managers, whose core task is to shape the relationships in the social system of the company in such a way that employees can work together effectively; as well as emotional leaders whose task is to inspire their employees so that they voluntarily engage to achieve the goals.

 Many leaders have already done this in the past, but only in relation to their subordinate employees. However, in modern high-performance organizations, the company areas are closely interconnected; they also typically cooperate with many external partners who perform important sub-tasks. Therefore, leaders must manage an increasingly complex network – and do so in an environment characterized by constant change, where ultimately no one knows what the future will bring.

Leaders need new competencies

To operate successfully in such an environment, leaders need partly new competencies. These can be categorized into three competency areas:

1. Personal Intelligence. This competency area primarily encompasses the level of one's self-understanding. This is characterized in “Digital Leaders,” meaning the leaders that companies need in the digital age, by their understanding as learners. They regularly question their behavior and its impact and develop themselves further as individuals. Closely linked to this are traits such as curiosity and willingness to change.

2. Relationship Intelligence. This competency area includes the skills necessary for establishing and developing sustainable relationships. Central to this are empathy – the ability to understand other persons and situations – as well as a respectful handling of the (personal) interests and needs of network partners.

3. A central element of this competency area is future vision. This includes both a vision of where the common path should lead and the awareness that technological progress (not only in IT) enables new problem-solving and that it is essential to seize the resulting opportunities. This requires not only interdisciplinary thinking but also a “solid” digital competency; among other things, so that leaders, either alone or with expert support, can form a well-founded judgment about which opportunities and risks arise from technological progress – for example in the field of artificial intelligence – thus becoming capable of making decisions and acting.

Leaders need and want active support

In developing into such leaders, they need active support; they also desire this. In fact, leadership development in many (large) companies is currently largely on hold, as they know that their leaders will need a partly different competency and personality profile in the future, but they are still unclear on what that is.

As a result, many companies have “temporarily” suspended their management and leadership development programs, which they were previously so proud of. One consequence of this is: An increasing number of leaders feel “abandoned in difficult times,” which leads to frustration building up. They also often feel overwhelmed.

Older leaders are often perceived as a “paralysis layer”

Their employees also notice this. This is shown, among other things, by an online survey of young leaders aged up to 35 conducted by IFIDZ in companies with more than 100 employees. In it, three-quarters of the participants stated that the “established leaders” in their company did not or only half-heartedly approached the process of digital transformation and the establishment of a new culture of collaboration in their organization. This means that the upcoming young leaders, who are already digital natives and belong to generations X, Y, and Z, often perceive their older leadership colleagues as a “paralysis layer.”

Admittedly, this online survey was not representative. Nevertheless, there seems to be a latent generational conflict in many companies, between

• the advancing leaders, who desire more dynamism in change, and

• the established leaders, who may rightly slow down their enthusiasm because they know: In pursuit of legitimate change, the daily business must also be managed.

Proceed iteratively in leadership development

Also, to ensure that this (target) conflict does not “escalate,” systematic leadership development would be particularly important right now – even if companies do not yet know exactly what skills and characteristics their leaders will need in the future. In other areas such as “technical innovation,” they also do not sit idly by due to such uncertainties. Instead, they advocate for an iterative approach: first attempt a (solution) trial, then reflect on the experiences gathered, and then re-adjust or modify the measures.

Companies should also practice such an approach in leadership development so that their leaders do not increasingly feel: Our bosses leave us out in the rain in difficult times.

Leadership development in the context of AI and digital transformation

Note: In order to enable companies to respond promptly to the current needs of leaders, IFIDZ has developed, among other things, the two seminars “Leading in the context of artificial intelligence (AI)” and “Leading virtual teams: Leading at a distance.” These are offered both internally in companies and as open seminars.

Author: Barbara Liebermeister