Change has never been as pronounced as it is now and more so in the coming years. The 4th Industrial Revolution, which is bringing forth technological developments in artificial intelligence, big data, cloud computing, and others are disrupting all facets of work and life. A new cohort of consumers and workers, the Generation Z, those born after 1995, are coming into the fore as the true digital native, veraciously purchasing online which further spurs eCommerce.
In this digital age, organizations need a new breed of leaders, transformational leaders, those who can champion all stakeholders through the tidal wave of transformation that’s happening all over.
The term transformational leadership was coined by James V. Downton, and further developed by leadership expert James MacGregor Burns in 2004. According to Burns, transformational leadership can be seen when “leaders and followers make each other advance to a higher level of morality and motivation”.
Later, researcher Bernard M. Bass expanded upon Burns’ original ideas to develop what is today referred to as Bass’ Transformational Leadership Theory. According to Bass, transformational leadership can be defined based on the impact that it has on followers, with facets such as moral standards, authenticity, harmony, and persuasive appeals.
While these are still necessary traits and actions of a transformational leader, they are not enough in these times when many are struggling with what to do in the midst of digital chaos. This is evidenced by the increasing mortality rate of companies, heralded by the demise of corporate giants such as Nokia, Toys R’ Us, Sears, among others. Leaders in these organizations, who are contemporaries of the original concept of transformational leadership, proclaimed that they didn’t do anything wrong, but admitted that they lost.
The ‘soft’ side of transformational leadership such as vision, inspiration, and motivation are patently deficient. Making sense of what’s happening in the environment, putting together digital transformation strategies for sustainability and growth, innovating the business model, bias for relentless and well-integrated execution, and drive for organization culture change are the new facets of transformational leadership in the digital age.
- Sensemaking. This is a key transformational leadership capability for the complex and dynamic world we live in today. According to Prof. Deborah Ancona of the MIT Sloan School of Management, ‘it refers to how we structure the unknown so as to be able to act in it. Sensemaking involves coming up with a plausible understanding—a map—of a shifting world; testing this map with others through data collection, action, and conversation; and then refining, or abandoning, the map depending on how credible it is. Sensemaking enables leaders to have a better grasp of what is going on in their environments, thus facilitating other leadership activities such as visioning, relating, and inventing.”
- Digital transformation strategy. To respond to the fast-changing environment, transformational leaders need to understand and employ digital transformation strategies. This involves not technology for its own sake, but the acceleration of business activities, processes, and competencies to fully leverage the changes and opportunities of digital technologies and their impact in a strategic and prioritized way. This leaders not only understands what digital transformation is, but also where to do it and how to do it.
- Business model innovation. A transformational leaders leads the development of new, unique concepts on how a company delivers value to its customers, whether that’s through the development of new revenue streams or distribution channels, and taking advantage of digital technologies in bringing those concepts to fruition.
- Well-integrated execution. What separates from transformational leaders from the rest is the ability to execute in a well-integrated manner. This means a holistic and systematic way of implementing strategies across operations, product and service platforms, customer engagement, and employees. This leader optimizes business operations, innovates and transforms product offerings, enhances customer experience, and enables and empowers employees. It also involves identifying and putting the right people to the appropriate roles. As an example, implementing an ecommerce platform should also consider its impact to operational processes, employee skills, and product offerings.
- Drive for culture change. Transformational leaders not only inspire change, they mandate change. A strong message of change from a transformational CEO, like “use only cloud computing across our company”, or “I will not tolerate toxic behaviour amongst my direct reports” sends the message across in a way that drives employees to change their behaviour. This leader also understands and appreciates the importance of organization development in effecting culture change, i.e. implementing sustaining intervention programs and activities to make sure culture change happens. He or she understands generational differences among employees, and how they learn and adapt to changes. This leader also breaks down organization silos across departments that slows down business operations, thusly affecting service delivery to customers.
But how does one become a transformational leader and acquire these aforementioned capabilities? One needs to have a growth mindset, openness to the external world and risk-taking, and embrace of technological drivers.
(This article was originally published in Manila Times, April 5, 2019)
Reynaldo Lugtu Jr is Co-Founder and CEO of Hungry Workhorse, a digital and culture transformation consulting firm. And has engaged with several companies and organizations on digital transformation and innovation.
He is a digital and culture transformation thought & action leader, a sought-after public speaker, and an accomplished educator, author, business columnist, and innovation coach. And is a business columnist and writer for Manila Times, Manila Bulletin, and Business World.
Ray is the Country Representative of the Institute of Change and Transformation Professionals Asia (ICTPA). He is also Professorial Lecturer in the MBA program of De La Salle University and Lecturer on Digital Transformation, Leadership and Management in the Benilde – School of Professional and Continuing Education.