Connectedness: Leadership for a Changing World

Illustrations by Richard Lidbetter

Cover image courtesy of PantherMedia

Book layout and cover by Jurgen Leemans

Publisher Van Haren Publishing, ’s-Hertogenbosch, www.vanharen.net

ISBN Hardcopy: 9789401810333

ISBN eBook: 9789401810340

ISBN ePub: 9789401810357

D/2020/15004/01

NUR 801

Copyright © Van Haren Publishing

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted by law, without either the prior written permission of the author and the publisher.

Foreword

by Peer M. Schatz

Figure 1: Peer M. Schatz

When asked what I consider the most critical element of business success, my one piece of advice to any leader is to build a team of people who have trust in each other and who genuinely understand and believe in your mission.

I have seen so many organizations with fantastic strategies and great products fail to deliver on their potential simply due to lack of trust, conviction and focus on what’s not possible versus what is possible. However, whenever an organization prioritizes the reason why they exist and makes it very clear how every member of the team can achieve professional and personal fulfilment by pursuing this mission, the success rate goes up tremendously.

An environment where everyone knows how they can make a difference and where people share the desire to do so will be an open environment in which information and ideas move quickly and where strategic and organizational agility will create a competitive advantage and stimulate trust, initiative and ensure a shared ownership of the organization’s mission. These are typically also environments where senior management leads by example, is visible yet also humble and also recognizes contributions.

Of course, success also requires a great deal of hard work, ideas, processes and good fortune, yet when these above factors come together, we can often see significant increases in success which is then also achieved in an inclusive and inspiring way. Such success is also often more sustainable as it reinforces a culture which can create a source of long-lasting energy. For most of my professional career, I had the great privilege to be part of organizations that have embraced the principles of transformational leadership and I have seen for myself the impact such leaders can have.

As a leader, I have always seen it as the most gratifying experience to be able to work alongside truly engaged and engaging people, who share a passion for a shared mission and thereby unleash a tremendous, positive energy – and not only deliver business results but thereby experience and share personal fulfilment which is often evidenced by a working atmosphere in which, even when great challenges are being faced, one can experience joy, laughter and a great can-do spirit. That is where true magic happens.

Peer M. Schatz

Peer M. Schatz is long-time Chief Executive Officer of QIAGEN N.V., a leading provider of molecular sample and assay technologies. Between 1993 to 2019, he led QIAGEN’s rapid expansion from a start up with $2 million in sales into a global leader with over $1.6 billion in revenues. Mr. Schatz also served as a founding member of the German Corporate Governance Commission and served as a director or advisory board member of several publicly listed companies as well as of the Frankfurt Stock Exchange. Mr Schatz graduated from the University of St. Gallen, Switzerland with a Master’s Degree in Finance and from the University of Chicago Graduate School of Business as a Master of Business Administration.

Authors

Figure 2: Dr Katrin Winkler

Professor Dr Katrin Winkler is a Human Resources and Leadership professor at the University of Applied Sciences (UAS) Kempten, Germany. As both academic professor and having many years’ experience leading international teams and consulting for leaders around the world, she shares her insights on effective leadership and how to motivate and inspire people.

Figure 3: Nicola Bramwell

Nicola Bramwell has an MBA and business background in strategic marketing, general management, human resource management, organizational design and leadership. She has held senior positions in blue chip companies in complex industries and shares much expertise in innovative leadership, leading change, and developing effective communication skills and personal impact.

Contents

Foreword by Peer M. Schatz

Authors

Introduction. Achieving Balance

Part 1. Why Leadership and Connectedness Count Today

Chapter 1   Global Companies Need Management and Leadership

Chapter 2   Game Changers of Globalization and Digitalization

Chapter 3   The Good News Is Leadership Can Be Learnt

Part 2. How to Achieve Connectedness with Self

Chapter 4   The Beauty of Transformational Leadership

Chapter 5   It Starts From Individuals

Chapter 6   Achieving Personal Impact and Influence

Chapter 7   Becoming Transformational

Part 3. How to Connect with Others in the Digital Age

Chapter 8   Bringing Others on the Journey

Chapter 9   Treating People as Individuals

Chapter 10   Empowering People to Think

Chapter 11   Including Everyone and Everything

Chapter 12   A Few Words of Caution

Part 4. Applying Connectedness

Chapter 13   The Shift to Meaning

Chapter 14   Tools to Transfer to Daily Work

Bibliography and Notes

Acknowledgements

Index of Key Terms

Introduction

Achieving Balance

Our Passion for Leadership

Leadership is about stepping forward, inspiring and motivating others to get involved and creating an environment in which all can succeed. So, what’s new? In the 21st century, challenges are global such as climate change, pandemics, economic pressure, education, integration and keeping pace with technology (1). These are rapid changes. For business, such changes, driving a new knowledge era, rather than the industrial focus of the 20th century, means business organizations also need a rethink. They need less bureaucracy, more innovation, more flexibility. This also impacts business leaders and a refocus on leadership that can unleash the energy and talent to make all this all happen (2). One other significant trend in this century, as described succinctly by the Dalai Lama, is fostering a oneness, through dialogue and respect (3). This theme of oneness or connectedness is what this book reflects most. It is allowing businesses to make improvements in life, whilst using purpose, the connectedness to something bigger than ourselves, to achieve extraordinary things. For leaders, be they senior managers, project managers or those simply influencing as role models, this means being true to one’s self and connecting with others.

For successful leadership today we believe the work still has to be done, tasks completed, goals achieved, and financial results secured. What we also believe and have evidence to show, is that greater success, even happiness, can be found by shifting focus, by going beyond task orientation to people orientation. In other words, beyond traditional management and control, to true leadership. It requires a mind shift though, and a deep personal shift from ego and ambition to purpose and connectedness (4). Sounds unreal? We don’t believe so and here we will show you why and how!

This book is designed as an inspiring “management book” which covers the key concepts managers and leaders need to know: from what businesses need to manage, to the importance of people management, through to how to lead people. It does however consider how to do these things and fulfil the human need for personal growth, finding our calling and gaining a sense of belonging. The book therefore references much from management and leadership experts, as well as challenging many Western norms and considering topics related to virtues and values. It is designed to make you think, possibly question established habits and inspire individuals to take a moment and redefine how they truly make a difference every single day.

New Business Approach

“Today’s corporate environments are leaner. Priority is value-creation from every contributor and in every interaction. The traditional, hierarchical notion of leadership no longer serves the needs of the organization” (5). What has also been shown, is that regardless of desire to change, organizations have only kept up the pressure and the impact on employees has worsened. The Gallup Institute has been conducting studies on employee engagement since 2001. Their constant key finding is that despite the fact that employees in general have a positive relationship towards work and most rate their surrounding conditions positively, including work-life balance or compensation, strong employee engagement can only be found within 15% of an organization (6). 70% of employees are basically just doing what they are told to do and show no extra effort. And 15% are entirely disengaged and so utterly frustrated that they actually start to sabotage the organization!

Yet people really want to contribute and are motivated when starting a job, and it is the leadership behaviours that often lead to disengagement (7) or in the worst-case situation, to people starting to turn against the company.

This leads us to again highlight that there has to be a better way! We spend so much of our lives at work so how can we make this more fulfilling and the type of place where people want to give the best of themselves every day? It has been shown that “employees don’t just want to work for a company, they want to belong to an organization” (8). So, how can we engage people’s minds and nourish their souls? It is simply about doing the right things for the organization and doing them in the right way for people.

The new way is all about balance:

• Effective management focus and leadership trust

• Balancing tasks and people orientation

• Handling complexity through flexibility

• Going beyond controlling people to including people

• And it’s greater than outdated or imagined orders; it is about emotional connectedness and purpose.

This book concentrates on the opportunities for leading in a new way. Imagine the outcomes when teams are: connected by a shared purpose and led by courage, kindness and curiosity; highly engaged with organizational vision and values; motivated to contribute and achieve organizational success. By understanding that the new world requires a new way of leading can open the door for the creation of transformational environments: a shift to purpose and values underpinned by strong management and leadership. What we want to share is how leaders can go about doing this.

The Transformational Environment

A transformational environment can be created when applying connectedness in the digital age: connecting with self, others and the business, to achieve fulfilment as individuals, teams and organizations.

Figure 4: The Transformational Environment

Why Leadership and Connectedness Count Today

Welcome to Part One, our introduction to leadership today. From understanding the management and leadership tasks that need to take place, to understanding what is changing around us, we explore the complexities and challenges for successful leadership, which we believe lie not in isolationism, but in leveraging all connections around us.

Chapter 1

Global Companies Need Management and Leadership

Key Knowledge…

• Management is a process of directing a team to achieve planned objectives

• Leadership is achieving results through people

• Leaders are measured by actions, not position

Key Actions…

• Managing includes planning, strategy and setting objectives; organizing time, work and decision making; controlling, correcting errors and appraising performance; and achieving tasks

• People management includes setting individual goals, team building and developing

• Leading includes translating vision into meaning for individuals, inspiring all individuals to gain commitment and creating the environment for business and individual success

Impacts…

• Alignment and accountability to business objectives, resulting in high performing organizations, teams and individuals

• Greater agility and openness to change

• Long term competitive advantage and growth

Let’s start with the basics; what is management? Simply put, management is a process of directing a team to achieve planned objectives, but before we explore how to do this, let’s start by considering what a business is and how a business works.

A business produces and sells goods (or provides a service) to customers. Michael Porter described the activities of a company as the value chain, which highlights the steps undertaken to create value in the eyes of a customer (9). Primary activities include raw material sourcing, production, plus sales and distribution of the final product. Supporting activities include functions related to providing infrastructure, finance and human resources.

The Value Chain

Figure 5: Representation of The Value Chain (9)

A business must also make profit, the excess the customer is willing to pay over the costs incurred to make and sell the products (or service offering in service industries). How a business is setup and run to achieve this relates to how it is managed. To create value, the senior management team of a business therefore has to understand the customers and make decisions on how to formulate the business to deliver results. Management gurus such as Drucker (10) and Malik (11) agree that it’s about doing the right things and doing them in an aligned way.

Figure 6: Management Decisions

To achieve results, a business has to make a clear decision on Strategy, Structure and Culture to be able to provide orientation for the organization and drive results:

Strategy. Strategy is all about products, long term planning and how to be better and faster than the competition. The strategy of the organization defines what to focus on and thus provides orientation for the employees.

Structure. Structure defines how activities such as task allocation, coordination and supervision are directed towards the achievement of the business strategy, through teams, divisions or functional areas. It defines the set up of the organization and how the resources are allocated to deliver on the strategy.

Culture. Culture can be described as the corporate glue which creates an environment of identity and belonging for the employees. A corporate culture consists of the underlying norms and values and can be seen in the actions and behaviours of the people. Parts of corporate culture are visible, such as artefacts defined in corporate branding, yet a lot of it is not visible and consists of shared values which are not always expressed succinctly yet have a major impact on driving the behaviour of employees (12).

These three elements are translated to employees to drive their daily tasks and actions, which bring about the business results. Many companies align, implement and communicate their business approach in a highly structured way, such as a strategy pyramid.

A Strategy Pyramid

Figure 7: Strategy Pyramid

A strategy pyramid is a structured framework which provides orientation and the corridor for decisions in an organization. This framework can include creating and communicating:

• A vision – long term aims and direction

• Mission – the purpose of the organization

• Values – what the organization believes in and the principles employees are expected to uphold

• Goals – SMART objectives for the next 1-3 years

• Strategies – the plans showing how to achieve goals

• Competencies – success behaviours for which all employees will be assessed and developed.

Such a structured approach feeds directly into key initiatives, projects and daily tasks.

Management is a Process of Doing the Right Things

As Malik defined management (14), it is “the profession of effectiveness, with no space for failures”.

It is:

• Focused on effectiveness

• Controlling tasks and people

• Setting and achieving goals

• Producing order and consistency

• Task oriented

As management is a process, a manager must therefore decide the series of actions or steps to take in order to achieve a particular end. A manager’s role can then be described as knowing the company story, focusing on company strategy and goals, translating and directing this to a team to achieve planned objectives. For management to achieve order and consistency, as well as effectiveness, it is concerned with the operational, everyday tasks, including planning and budgeting, organizing and staffing, controlling and problem solving (13). Management does, by eliminating chaos and defining processes, establish the foundations for a successful business. If management encompasses a series of steps to achieve business results efficiently and effectively, the question is, how does leadership differ?

Leadership is Going Beyond Management Tasks to Achieve Results Through People

In today’s business world of disruption, change, new expectations, and easy to copy product and processes, it is leadership that is required more than ever. Leadership can be considered to give the edge. How? Well, imagine if everyone in an organization is completely bought in and working at their utmost best. With such a committed and engaged workforce, the power of human capital can be leveraged to deal with the challenges of today and bring about business success.

So, where management is a process of doing the right things, leadership is about inspiring others to be engaged and committed to work and personal success. It is...

• Creating an environment in which others can succeed

• Focused on the development of vision and strategy, with scope for failure

• People oriented, seeking commitment and building collaborations

• Aiding organizations and people to deal with complexity and change

• Supporting agility, growth and sustainable competitive advantage

‘Just turning up is no longer an option’

SAHAR HASHEMI, FOUNDER OF COFFEE REPUBLIC (15)

Leadership is therefore about environment, purpose and meaning. It is concerned with direction, aligning people, motivating and inspiring (13). The result of this is to achieve change and movement. This is because leading is related to actions that influence the future of an organization and its people. And it really does matter as leaders create the environment for their team, good or bad.

There is much survey data to show why people quit their jobs. In a Gallup survey from 2008, 17% stated reasons directly related to management and for other tops answers such as “career advancement” and “lack of fit to the job”, the leader also has influence (16). In a more recent 2016 Gallup survey, 18% stated that during the last 12 months, they thought about quitting their jobs, because of their boss (17). This is why the conclusion still holds, that “at least 75% of the reasons for voluntary turnover can be influenced by managers” (16) And highlights that leaders can act to retain staff and go further to create a motivating and effective work environment.

Yet a business needs planning, organization and control! For a business to be successful, tasks have to be completed in the right way and in time; such as developing, selling and distributing products to their customers. So, to ensure this happens, tasks and people have to be managed.

The Grid developed by Blake and Mouton (18) helps to explain how tasks and people have to be managed. Though developed in the 1960’s, it still a powerful insight into the balance needed by a “leader” to show concern or focus on both tasks and people.

The Leadership Grid

Figure 8: Representation of the Leadership Grid (18)

The grid is based on two different behavioural thoughts; concern for people, and the concern for tasks and results. Concern for people is where a leader considers the teams’ needs and interests when deciding how best to accomplish a task at hand. The concern for tasks and results is where a leader points out specific objectives, readiness, and where to strengthen focus when deciding how best to accomplish the task. It also identifies five different combinations of management or leadership styles:

Impoverished leadership: The impoverished or “indifferent” leader is the most ineffective. These leaders have little to no interest to create a work environment that gets the job done. With little interest in motivating or satisfying the team, the results are almost always disorganized, lack agreement and have no satisfaction. An example of this may be someone who is leaving or retiring. They no longer have interest in the company or the employees.

Produce-or-Perish Leadership: These types of leaders are autocratic and have strict rules, policies, and procedures. By viewing punishment as an effective way of motivating team members, this approach can lead to high results. However, this lowers the teams’ morale and diminishes motivation. This will ultimately hurt people’s performance. This type of leader will struggle to keep performance at a high level and no one will be happy. An example of this is if a leader takes over a department for a short period of time. They don’t care for the people and just want to get the job done.

Middle-of-the-Road Leadership: A Middle-of-the-Road or “status quo” leader tries to keep a balance between results and people. This strategy sounds alright but is not as effective as it may seem. Through constant adjustments, it will not succeed in having high performances and will never fully meet the needs of the people. The result is that the team will not be very happy and that will show in the lack of productivity.

Country Club Leadership: The Country Club or “accommodating” style of leader keeps tabs on how team members are feeling. The leader assumes that as long as employees are happy and feel needed, they will work hard and perform better. An example of this is if a leader just got hired or promoted. They want to stay friendly with old peers and will forget to criticize or discipline employees.

Team Leadership: This is the most effective style and has a leader who shows passion in their work. Team leaders manage the organization’s needs so that the team members understand the organizations’ purpose. By involving the people in determining business needs, teams feel committed and want to have a say in how successful the organization can become. This creates a respectful environment based on trust. This will ultimately lead to higher satisfaction, more motivated employees, and overall better performance. An example of this is an experienced leader who shows commitment to their employees but does not depend on being well liked by them.

If we review the thoughts of other experts, it is clear that management and leadership are different, yet it can be argued that a business needs both.

‘You manage things, you lead people’

HOPPER (19)

‘Management is about coping with complexity … Leadership is about coping with change’

KOTTER (20)

‘Where managers act to limit choices, leaders develop fresh approaches to long-standing problems and open issues to new options’

ZALEZNIK (21)

From Hopper (19), we can determine that managers focus on tasks, where leadership is more people oriented. John Kotter is a firm believer in innovation and change being a direct consequence of leadership, not management (20). Zaleznik also highlights that future direction and ambition comes from leadership (21). All agree therefore that management and leadership bring different things. This point is further highlighted by the rise of informal leadership in businesses today.

Leadership is Defined by Action Not Position

Though “manager” is a job, leadership is a choice. Leadership can be demonstrated in many situations as it is defined by action, not title. The challenge in business today is to understand that leadership needs to happen everywhere, meaning more people need to step forward and take the responsibility. So, if leadership is a choice, not a position, why doesn’t everyone step forward?

As humans, we are subject to many unconscious biases. One is known as bystander apathy, a phenomenon concerning people’s likeliness to help in an emergency situation. According to Bystander Apathy or the Bystander Effect, the greater the number of other people present, the less likely any one of them are to act (22). Why? There are two reasons …when we are in a crowd, we assume that someone else will do something, and no one wants to be the person who is behaving differently. When we translate this to business, we can see the risk of dilution of responsibility in groups and secondly, the influence of social pressure that it is ok not to act when others don’t. This therefore suggests that choosing to step forward to lead requires individual decision making and accountability for an outcome. For this to arise, an individual requires motivation and confidence to act.

Our intrinsic motives drive our actions. According to American psychologist David McClelland, we all have a need for achievement, a need for affiliation, and a need for power (23). Individuals will have different characteristics depending on their dominant motivator.

• Achievement: Achievement has a strong need to set and accomplish challenging goals, takes calculated risks and likes to receive regular feedback on progress and achievements.

• Affiliation: Affiliation wants to belong to the group, favours collaboration over competition and doesn’t like high risk or uncertainty.

• Power: Power wants to control and influence others, win and enjoys status and recognition. Those with a strong power motivator however are often divided into two groups: personal and institutional. People with a personal power drive want to control others, while people with an institutional power drive like to organize the efforts of a team to further the company’s goals.

This understanding of intrinsic motives leads us to ask if the need for power is associated with leadership? Is power and the need for power a bad thing in the workplace?

Here are some connotations of power in the workplace: It is associated with responsibility; it facilitates decision making and those deciding set the future direction. It does however create boundaries……so not bad in general, however negative connotations come from misuse of power.

‘With great power comes great responsibility’

CHURCHILL, ET AL

‘Power is a medium to arrange the decision criteria of a society and to ensure decidability’

NIKLAS LUHMANN (24)

The Significance of Power

In the 1960s, John French and Bertram Raven described five types of power in leadership (25).

Figure 9: Representation of the Five Basis of Power (25)

Legitimate power comes from position in an organization. Reward also comes from the authority to make decisions on benefits to others so may be associated with compliance. Coercive power is pressure based and conveyed through fear such as losing your job. These three are examples of formal power.

Referent and expert power on the other hand are personal. Referent power comes from being trusted and respected for what we do and how we handle situations. Expert power comes from our experience, skills or knowledge and how that is also utilized by others. Both highlight that formal power is not required to lead, it is actions that count.

Understanding that influence and impact can come from outside of hierarchy is essential today due to the decline of old norms and structures in business. The days of static organizational structures with strict hierarchy, and senior managers or leaders as controllers are gone. Vertical reporting lines are being replaced by matrix structures and project teams. The idea of separation and arms-length relationships with other functions, suppliers and organizations has also gone. Upward flow of information and downward flow of decisions and directives is also a thing of the past. These remnants of a command and control structure are being replaced by leaner, flatter organizations and ones desiring contribution from all and requiring both formal and informal leadership at all levels.

The Increasing Relevance of Informal Leadership

Informal leadership is leveraging experience, knowledge, skills and the contribution of those who choose to step forward. It means having the ability to influence the behaviour of others, not through position and hierarchy, but based on personal referent power (trusted, respected) or expert power (as a thought leader or social influencer). Behaviours that are influenced include decision making and problem-solving, enabling more collaborative and creative approaches. This is critical for flexible project work and can directly lead to faster, more innovative and nimble organizations.

Terminology for such styles commonly expressed today can include lateral leaders who influence without ‘title’ or “position”, often due to their natural inclination to get things done (5). Agile leaders who demonstrate the ability or agility to lead well in a wide range of circumstances especially new, changing and ambiguous situations (26). Finally, project managers can be included here as project management includes completion of the work of a team to achieve specific goals within a specified time, without the vertical reporting lines.

To understand informal leadership and its tasks better, let’s look at examples of roles or positions within an organization.

Figure 10: Differences Between Line Manager and Project Manager Roles

It can be seen that a line manager has the goal to deliver team success year on year and as such is responsible for the management of people and their tasks. A project manager on the other hand has to deliver a defined project. Often the tasks of line management and project management can be considered similar and both includes the work of others. The challenge however is that a project manager does not have responsibility to “manage” people. This means when influencing team members, a line manager already has positional authority. For a project manager, without formal authority, true leadership is required to influence and persuade a team.

So, as we define it, leadership is about inspiring others to be engaged and committed to work and personal success. It is establishing direction and aligning people through communication and team work. In other words, leaders influence results through people, and this needs to be achieved as a line manager or a project manager. This may also go some way to consider the question, can one person manage and lead? Or even, must one person manage and lead at the same time to be successful? We believe, yes. Kotter also advocates that a successful organization needs to combine both strong management and strong leadership.

‘Companies should remember that strong leadership with weak management is no better, and is sometimes actually worse, than the reverse.

The real challenge is to combine strong leadership and strong management and use each to balance the other’

JOHN KOTTER (20)

Key Learning Points

• For management to achieve order and consistency, as well as effectiveness, it is concerned with the operational, everyday tasks, including planning & budgeting, organizing & staffing, controlling & problem solving. Management does, by eliminating chaos and defining processes, establish the foundations for a successful business

• Leadership is creating an environment in which others can succeed and going beyond managing tasks to achieving results through people. It is focused on the development of vision and direction and coping with change

• Leaders need to combine ability to manage with adaptability to lead

• True leadership, formal and informal, is essential throughout an organization, for agility and innovation. It is not limited to position and only defined by actions and outcomes

Personal Reflection Points

Question 1:   Reflect upon your own experiences and development needs:

Figure 11: Reflection Exercise on Experiences and Development Needs

Question 2:   By plotting yourself on the grid below, what does it tell you and what you can learn?

Figure 12: Reflection Exercise on The Leadership Grid

Question 3:   Would others agree with your placement above? How do you believe you are genuinely perceived by others and why?

Chapter 2

Game Changers of Globalization and Digitalization

Key Knowledge…

• Globalization describes the growing interdependence of the world’s economies, cultures, businesses and populations, due to cross-border trade and flows of investment, people, and knowledge

• Digitalization describes the restructuring of personal lives around digital communication and media infrastructure (how people interact). Digitalization also describes the use of digital technologies to change a business model, provide new revenue streams or value, producing greater business opportunities

• Both trends have changed businesses rapidly and cannot be ignored. Both can be leveraged through true leadership

Key Actions…

• Seek out new opportunities in change; see change as the norm

• Be open to new perspectives from global sources such as diverse customers and workforces

• Embrace a digital mind set to enhance all aspects of business from strategy to processes to leadership

• Identify and develop new leadership competencies

Impacts…

• Leadership innovation looks to maximise human potential, creates uniqueness, is difficult to copy and as such builds sustainable, competitive advantage

• Organizational impacts from embracing change include strategic renewal, productivity gains, less turnover, increased agility and greater brand value

• Innovative working practices impact employees resulting in better teamwork, greater company commitment, increased morale and trust

Globalization, technological innovations and other constant changes mean businesses need to be more agile and adaptable to survive. In other words, it is about embracing change as the only constant. Customer demands and expectations are rapidly evolving – they want more choice; they want goods now and they want services their way.... Competitors can be organizations from across the world – not only can they access global customers; they can recruit from a global workforce. Even the ways of working, such as more remote teams and flexible working have impacts on organizations. The jobs we do even differ from the jobs of 20 years ago. And why? Because globally, the social and economic structures have changed. All this means that businesses have to change too to stay ahead. In terms of how an organization achieves this, strong leadership is the only way to navigate through.

‘If the rate of change outside exceeds the rate of change inside, the end is in sight’

JACK WELCH (27)

‘Speed of change is the driving force. Leading change competently is the only answer’

JOHN KOTTER (28)

Companies in the Global and Digital Age

In the 21st century, it is the digital drive in particular that has added further complexity (29). Companies, employees and managers share common challenges of using new technologies wisely in order to achieve results and increase value. This challenge takes place in the context of disruptive societal and economic changes. In our personal lives, digitalization is the new norm, readily accessible to many and seemingly inescapable. For example, communication. By the year 2020, Cisco estimate more people will have mobile phones than electricity at home, specifically 69% of the world’s population (30).

Considering companies, evidence highlights vast differences. In 2016, research showed that the degree of digitalization of German organizations for example, in comparison to companies internationally, exhibited deficiencies in the use of information and communication technologies (31). This was despite the fact that 80% of German employees used information and communication technologies (32). Why a gap? There have been two waves of digitalization (33). The first took place in the context of the third industrial revolution and manifested itself in the transfer from analogue to digital information. This wave was complete at the end of the 1990s. The second wave of digitalization, at the beginning of this century, is also the starting point of the fourth industrial revolution and primarily describes the introduction of digital processes using information and communication technologies. This process is far from complete, and going back to our German example, 38% of German companies are still at the very beginning of their digitalization efforts. Only 2% have developed and successfully implemented a digitalization strategy. Of small and medium-sized enterprises, 47% have not taken any steps (34). So, although many employees are already using information and communication technologies, companies are not yet surfing the digital wave because they have not entirely implemented digital processes. More is still to come, so which changes can we therefore expect for the business world of the future?