As the digital tornado advances do you have your Leadership 4.0 digital Dorothy?

“Have you heard already?” This seems to become the defining question in the age of digitisation. Life is changing at incredible speed, bringing breakthrough news on robotics, AI, cloud computing, 3D printing, smart data or augmented reality. These technologies are revolutionising almost every industry in a radical and exponential way. That is nothing new. We all see the waves of disruption rolling towards our business. Some might still be miles away, but there is no doubt that they will hit the shore sooner or later. But although we know that standing still and just watching it happen is not an option, most of us are experiencing immense difficulties with reacting to change timely and efficient.

It’s time for an upgrade

Back from their board meetings and management conferences the majority of our customers confess that they are kind of lost when it comes to digitisation. “We know that we have to respond. But we don’t know where and how to start and what is even more frightening, we don’t know how to learn it,” they say. Is it surprising? Despite the fact that the need for top level qualifications is exorbitant, the digitisation discourse is heavily dominated by technology and use case topics. Fair enough, for we undoubtedly need more insight into core technologies and better understanding of how to put them into practice and gain the return on investment. But digitisation, the Internet of Things and Industry 4.0 pose a much more complex challenge than that, because not only are industrial processes and the technology stack changing but also the social framework. The way we work, collaborate, compete and create. The way we plan careers and share knowledge, the art of handling failures, risks, experiments and innovation and the science of planning and crafting strategies. These are the unintended social effects of the technological change. For coping with them, a strong leadership and a deep and comprehensive sight on digitisation are indispensable. It’s time for an upgrade, it’s time for Management 4.0. Let’s see why.

Will digital disrupt everything but managerial education?

In the 1970s, marketing was the new hot topic, emerging from the breeding grounds of the Harvard University. Millions of managers from Blue Chips and SMEs attended training all over the world, business cases were written and discussed and new processes were deployed in the companies. Marketing became an integral part of the strategic set-up of most companies. Can we imagine a managerial education completely ignoring the 4Ps of marketing or Michael Porter’s five strategic forces? Not really.

Today it’s not marketing or procurement, or lean production, or balanced scorecard, or… just name it. It’s much bigger. For sure, marketing has changed the face of business. As did lean. But they hardly disrupted one single industry. Digital will disrupt everything. But where is the training? Where is the education? How many managers know the principles of UX (user experience), or how to organise design thinking? How many have a clear idea of how to adopt lean-startup methods or how to build a detailed digital roadmap? How many understand the impact of social media forensics?

Good Will Hunting in the digital age

It should be clearly stated that presentations and conferences dealing with different aspects of the Fourth Industrial Revolution or digitisation cannot be rated as educational efforts or transformation firing keys. TED talks are also not education. And surveys and reports are not education either. Think of the balanced scorecard. You may have read tons of papers about it. But you only learn how it works when you struggle to deploy it under the specific conditions of your company. Knowing is not even half of it. The proof of the pudding is in the eating. Why should it be different about digitisation?

Taking digitisation seriously is about participation testing and experience. Forget the conferences. But even the traditional training doesn’t work when it comes to digital topics. Have you ever printed smartphone cases or an Airbus component with a 3-D printer? Tested sensors in warehouses to optimise logistics and understand customer behavior? Set up and run an e-commerce shop for a couple of hours? Interacted with an AI application? Taken part in Google sprints and design thinking sessions? No? So, what can you tell about digitisation?

When we think about digital education and training the way they are carried out today, a famous sequence from the great movie Good Will Hunting comes to mind: “Michelangelo, you know a lot about him. Life's work, political aspirations, him and the pope, sexual orientations, the whole works, right? But I'll bet you can't tell me what it smells like in the Sistine Chapel.” This is it. This is the difference.

Paradigm lost: Leadership 4.0

Check out what a boardroom member from a global corporation told us during his stay at our Berlin facilities:

“Our leadership culture is terribly outdated. When somebody is promoted to a leadership position, he stands up in front of his team and says, ‘You guys have 90 days to convince me of your performance’. And when he gets totally upset when the digital natives in the group grin and respond: ‘Fair enough, boss. But you have 30 days to convince us of your leadership skills. Don’t crack under pressure’.”

This unlocks a lot about the digitisation and the Fourth Industrial Revolution. It’s cracking leadership paradigms. It’s revolutionising organisational culture. It’s propelling new communication rules based on social media principles and philosophies. It’s fostering an unparalleled shift in organisational power and the rise of talent as the new star. And it’s redefining the terms ‘speed’ and ‘result’. With Google design sprints, for example, innovations are born in just five days. An MVP (minimum viable product) is developed in five weeks. We are not talking about months and years any longer, we are not talking about perfect prototypes, monstrous IT-systems, frenetic over-engineering and wild controlling and compliance orgies. These days are gone when it comes to digital and they will soon be gone in traditional industries too.

This is what you have to manage in the age of digitisation. It will cost you more than ever before, it will force you to summon all your will, skill and creativity. But the hotter the battle, the sweeter the victory. Becoming or staying a leader in the digital age will give you much more inspiration and vitalisation than you could imagine by looking at the change from outside the playground.

The learning community

The most successful digital competence initiatives are those which take digitisation and all its aspects seriously, aim to enable through participation, unbind creativity and passion and focus the four target groups which are critical with regard to successful change. From the bottom, the digital talents enter the company; from the top, management it is brought to the level of digital readiness, while laterally co-creation of internal digital products is operated by developers and external creatives, and digital coaches bring the entire transformation process up to speed. Let’s have a closer look on how it works with the XU approach. It is based on broad and profound experience, but also on several failures and obstacles we had to overcome during the last years while we were searching for a perfect setup.

First, the managers have to go through a Digital Readiness Program which takes six to 10 days organised into intervals and using the classical face-to-face approach but through direct application, through so-called field experiments. In between the intervals, the managers revisit what they learned, adapt it to their special situation and challenges based on a digital learning platform and thus secure a measureable return on education.

Second, those organisation members, who have long been involved with the development of new digital products, services and business unit, are trained in co-creation. This includes such methods as Google design sprint or MVP tracks and fosters their acceptance and understanding of a cooperative communication culture in order to raise their skills in collaborating with internal and also external innovation partners.

The third target group is digital talent coming from universities and other educational institutions. These guys may be studying coding, digital business and social media marketing but also more traditional tech, engineering and business subjects and digital art, sociology or philosophy. They are not only true-born digital natives but also digital enthusiasts who are self-confident and curious about the world they will keep running and changing in a few years. A company with an interest in its own future should network with a hand-picked selection of these institutions, sponsor scholarships and shower students with internships and project opportunities.

But by far the most critical target group for the education initiative are the ‘digital coaches’. This group is the essential prerequisite to digital transformation: without them nothing works. They are the internal catalysts, enablers and change drivers within the organisation. These guys ultimately lead the transformation operationally, provide technical and, far more importantly, social and change management support. They form the hinge between the executive operative level and the digital strategy. How many digital coaches has your company trained so far? Really? Ok, don’t panic – that ship hasn’t sailed yet. But please, think about what should be on your next board meeting agenda…

The magic tornado of digitisation

Adapting to the digital may sound strange. As I mentioned, digitisation will disrupt everything. How could you domesticate a tornado? Well, this is not what education in the digital age is about. This is not about getting the skills to avoid the change or to repulse it. This is definitely not about 'hey, after the tornado has gone, my house is still here, I’m still here and everything is looking exactly the same as before'. Training the digital means learning the skills to survive the tornado. It’s about not being paralysed after the dust has settled and your world looks completely different and strange. Remember the Wizard of Oz? The great tale about the adventures of the young girl Dorothy in the Land of Oz, after she was swept away from her farmhouse in Kansas by a magical tornado? Dorothy really managed it. She became a mover and shaker in her new world, she became an impressive leader of a crazy but passionate team. This is what education in the digital age should be about. And by the way – look out for Dorothy to join your crew.