Digitalization requires a new style of leadership.

The Digital Heroes Festival will take place in Stuttgart on May 10, 2019. It brings together speakers, investors, start-ups, influencers, and entrepreneurs. The goal is to equip medium-sized businesses for the future. What is necessary for this? What can medium-sized business owners and start-up leaders learn from each other? What type of leadership culture does digitalization demand? Personally, I have been advising companies and their leaders on development for over 15 years. Today, the primary task in leadership is to change the attitude towards change. The exponential technological development, the digital economy, and recent innovations in Artificial Intelligence are causing changes to happen faster than ever. Outstanding leadership must provide orientation to people in the midst of rapid change, without being able to know exactly where it is heading. It is about answering questions that do not have a clear answer and guiding processes where the clear goal cannot be determined. This requires breaking boundaries while not denying one's roots. Squaring the circle? Undoubtedly - and above all, true leaders must let go of some outdated paradigms of the past. What are they?  

Industrial Age: Leading through Power

In the early industrial age, employees were expected to arrive on time, reliably fulfill their tasks, not exchange ideas, and think as little as possible. Leadership was focused on this: authority was established through power, an authoritarian tone, rigid guidelines, control full of mistrust, and the threat of negative consequences for non-compliance. What did this leadership style sow? Fear - the worst of all advisors.  

Knowledge Society: Leading through Influence

By the 1980s, it had become clear that leadership without emotional intelligence had little chance of success: it was no longer the most diligent hands, but the smartest minds that were in demand. And these minds wanted to be engaged. So influence became the key. The manager became a motivator - sometimes also a manipulator - coaching the employee to align their attitudes, thoughts, and actions as closely as possible with the company's goals. The catch? Most managers did not reach the innermost core of their employees, and when things did not go as desired, they resorted to the authoritarian "Basta!" - following Gerhard Schröder. How can it be done better? What attitude towards leadership is useful in the digital age? On what principles can both start-ups and traditional companies orient themselves? The starting point is pressing: the internet has enabled rapid, global networking of like-minded individuals. New markets beyond traditional distribution channels emerge in the blink of an eye. Innovative business models disrupt traditional players in the blink of an eye. Paradoxically, these digital innovations lead to a renaissance of analog values in interpersonal relationships. More and more people long for authenticity, security, and warmth in direct contact. Welcome to the era of leadership through reputation!  

Digital Age: Leading through Reputation

Authority is no longer based on power here, but on lived leadership. The leader of tomorrow appeals not only to the minds but also to the hearts of their employees. They are enablers rather than know-it-alls. They do not have all the answers themselves but take responsibility for the process of finding solutions. Genuine interest, the ability to listen, and curiosity about others' ideas are the core competencies here. Humility becomes the most important virtue beyond all positions and hierarchies. This creates social density, and the innermost core of employees is truly reached. Trust replaces mistrust or even micromanagement. Sincerity and integrity become more important than perfect processes and metrics. And suddenly, employees find themselves in a world where they can truly realize themselves, where thinking outside the box is valued, and continuous development is natural. A world where work brings joy because everyone can identify with the company's purpose beyond traditional hierarchies. In a world where everyone can and should take responsibility and develop initiative. Motivation comes from within, creating a pull rather than pressure. This is the world of innovations and business models that inspire tomorrow's customers. There are already companies actively living this type of culture. Trivago (hotel search...?) is one of the few German unicorns and a vibrant, agile system. Decisions are made in independent teams within the tech company, each close enough to all relevant information. This creates reputation as natural authority. An extremely high learning speed is ensured, a significant competitive advantage in times of rapid change. Or Viessmann, the German family business that is transforming from a heating manufacturer to a solution provider for its customers. The approachable traditional company cleverly leverages the opportunities of digitalization without abandoning its roots. The prerequisite here and there is a leadership culture based on openness, transparency, and integrity. As Peter Drucker said, "Culture eats strategy for breakfast." And ultimately, this culture is deeply rooted in the company's purpose. And you? Get inspired at the Digital Heroes Festival! By impulses, experiences, and free thinkers. Have the courage to break mental shackles. Become the leader of the future! I wish you an impressive day. Yours, Jörg Hawlitzeck