How does digital transformation impact leadership styles and organizational processes? Difficult to give a univocal answer, but certainly in a disruptive way: this is the opinion of Giuseppe Stigliano, CEO of Wunderman Thomson Italia, one of the oldest advertising agencies in the world, author of two books that have a lot to do with innovation. (Retail 4.0, released in 2018 and On life fashion, on the market for a few weeks).
Stigliano's first reflection relates to the very characteristics of digital innovation:
"The advent of digital is a bit like that of electricity: about 150 years ago this technology arrived and since then many needs, desires and expectations have been satisfied in a different way than before, completely changing the paradigm."
Companies that are not born digital natives, therefore, are a bit like salt producers 150 years ago: those who did this type of trade could count on a very flourishing business, because salt could be used to preserve food. The arrival of electricity and refrigeration has upset this paradigm and so are technological innovations today:
“For me, digital transformation is really a transformation and not a change. This means that it is a cultural and not a situational process: and like all cultural transformations, it takes time. It requires changing mental posture, tastes, processes and training resources. All things that those who start from scratch today (as well as the refrigerator manufacturers of 150 years ago) must not do, putting considerable pressure on those who have to chase them ".
However, changing a corporate culture is anything but simple: “When you decide to change, you need to intervene on years of corporate stratifications and processes created to reduce risk and increase efficiency."
Also because fully embracing the Digital Transformation revolution involves a significant step for companies and teams:
"The most important aspect to accept is that, whatever the skills and know-how possessed, the obsolescence rate of everything we know is very high. The only constant is change. Therefore, the number one gift must be the calm acceptance of the constant of change and that this obsolescence will be increased and accelerated in the near future. The forecasts tell us that 75% of the companies that are in the top 500 of Standard & Poor's today will not be the same in 2027 ”.
It is true that even in the past, companies were subjected to changes, for example in the materials used or in the outlet markets, but certainly not with the current rate of speed. Indeed, now changes are the sine qua non to remain competitive. So much so that it is now difficult to maintain a real competitive advantage on the market.
What does all this mean for leadership?
“We can and must try to set a good example, transparency and consistency. However, there is a major issue that is not addressed at the moment: we are clear about the digital skills we need to develop, especially after the last year and a half of the pandemic. There are also evident what are those attitudes that will remain human anyway. What is not clear is: how do we manage to get these human skills through a screen? Put another way: how can a leader be empathetic, to pass a message with the same effectiveness as before, considering that we cannot perceive the reactions of the other? In fact, we are not prepared for this type of interactions, no matter how competent we may be ”.
A request that is often made by leaders to their employees is to adopt an entrepreneurial approach, but Stigliano is not very convinced of the opportunity to undertake a path of this type:
"I started my career as an entrepreneur, opening my own agency advertising, with related joys and pains of the trade. What I can say is that entrepreneurial attitude / attitude is a rare thing, being an entrepreneur means having a high propensity for risk, but often also having a starting situation that allows you to embrace this approach as well. In America there is a lot of talk about entrepreneur in house, with which in practice employees are asked to marry company projects as if they were their own, also making their own personal contributions. However, I believe that in a historical moment like the one we are experiencing it is important for business leaders to take responsibility and offer reassurance rather than just asking all collaborators for an active contribution precisely the case of treading on this aspect, also because in this phase not everyone has the desire to be on the front line ”.
What leaders are needed then in these times?
“There is a book that I recommend, First 90 days, dedicated to transition leaders, which proposes a framework called Stars, from the name of the initials that characterize it: startup, turnaround, accelerate growth, realigniment, sustain success. These are 5 different stages that companies experience in their growth and which would require different personalities to lead. It is in fact difficult for a person to have the qualities to be a suitable leader both in the startup phase and in sustain success. This is to say that, even before the pandemic, it was difficult to give a single answer to this question. Surely, though, it is that there is a huge difference between leader and manager: the leader has to do with setting a direction in an unstable situation and convincing others to follow him. The direction established by leaders, however, needs managers who reduce arbitrariness and make organizational processes efficient. In a historical moment like this we cannot only deal with managers, who write processes to make efficient trajectories designed by someone else. Rather, we need leaders, people who envision possible futures and who have the ability to clearly support and engage people. Also because the greatest risk is to continue doing things as they have always been done ”.
An example that immediately stands out is that of Satya Nadella, who was able to make an incredible transformation in a multinational of the size of Microsoft.
"It is no coincidence that Nadella - Stigliano recalls - does not like to define himself as CEO, when rather as Chief Cultural Officer, that is as head of corporate culture, as a testimony to the turning point that there was".
