Digital transformation is still top of the management agenda and goes beyond new business models, new technology and better customer understanding. The transformation to “digital” often requires fundamental changes in culture and leadership style. The foundation of a successful and sustainable digital transformation is agile leadership.
Agile leadership is based on the premise that company leaders are there to serve their employees, not the other way around. Implementing agile leadership involves turning the company pyramid upside-down, allowing those closest to the customer to make better decisions based on customer needs. This style of management is also called servant leadership.
The Agile Business Consortium1 lists three basic concepts for agile leadership:
Behind these 3Cs lie principles that are likely to change how many large organizations are run and how company leaders act.
Communication emphasizes that leaders need to “live” the change and be a part of it themselves. This includes top management. Only then can employees be inspired to change their behavior, ways of working and, eventually, the company culture. Communication also means there should be continuous reflection and feedback at all levels of the company. Both employee and customer feedback should be collected, analyzed and acted upon for organizational as well as individual development. The whole process needs to be transparent, to ensure that information does not get lost along the way. This feedback loop must be part of the daily work and working culture.
It is easy for companies to simply require and assume commitment from employees. However, for a company to thrive culturally and its employees to be emotionally committed, agile leaders must work to build a shared understanding of the company’s purpose in the world and the purpose of individuals as part of this. The vision and purpose may have become muddled over the years as the company has grown larger and markets shifted. A digital transformation therefore provides an excellent opportunity to work with the vision and purpose, which can help rejuvenate people and give them a feeling of involvement with the company.
Agile leaders recognize that leadership is to be found everywhere within the organization. But leaders need to provide the opportunity for people to lead themselves as well as others: this enables the agile culture to spread further throughout the organization. By setting an example and showing everyone what agile leadership means, you can sustain a cultural change that will eventually become the new norm.
Agile leadership means empowering individuals and teams, so they can decide and act upon things themselves, within their own boundaries. To this end, agile leaders need to trust their teams and dare to let go of power and control. Remember that you need to turn the pyramid upside-down! The teams are not there to serve their leader; the leader is there to remove any obstacles that prevent the team from performing at its best.
The people closest to the customers and the customers’ problems may have the best insight into possible solutions. Agile leadership means that everyone is open to the influence and ideas of others, and this particularly applies to leaders. An agile organization ensures there is a good flow of ideas and that actions are taken on these ideas. While this does not mean that all ideas will be used in practice, it inspires a culture of continuous innovation.
Digital transformation still means reinventing business models, sharpening the customer focus and interaction (see our Digital Leaders Study) and updating technology stacks. If you are running a digital transformation program today, make sure that you have a team looking into leadership and culture. The team can start small by running pilots in suitable parts of the organization, but this must be mandated and sponsored by executive leadership, preferably the CEO. Learn by doing, find the organizational pitfalls, share success stories and scale up to more parts of the organization. A large-scale digital transformation will not be sustainable without a change in company culture and leadership style. The journey toward a cultural change is not always easy, but it is imperative in order to capitalize on the investments made in company transformation.