Digitalisation changes the management culture

In Manager Magazin, business economist and physician Andreas Föller reflects on digitalization and how it influences our management culture. He finds that digitization is virtually forcing a new management culture. All employees, but also the employers, have to change - in thinking as well as in acting. 
Man wearing dark shirt is looking at computer screen in an office.
Föller points out that most people are reluctant to embrace change. Often a change on a political, societal or social level is presented in the media as downright frightening. Think for example of the smoking ban in restaurants. And now? Everything is quite normal and (almost) nobody had to close or give up their business because of it. At the same time, important changes sometimes take place very slowly and only in retrospect can we judge which changes really ended or heralded an era and where there was nothing but hot air behind them. We will only be able to judge how digitisation is progressing in a few years' time. But what we already know: Germany is anything but a world leader in digitization. In the following we summarize the article by Andreas Föller for you.

Digitization in Germany

Germany is lagging behind in terms of digitisation, but could catch up. Föller is of the opinion that a clever immigration policy, together with the resources available in Germany, would be able to drive and master digitisation. He emphasises that, especially when hiring new employees and new managers, completely outdated recruitment criteria are still being applied. The first phase of digitisation, the establishment and dissemination of the platform economy, is now behind us. German successes can be seen here. If we also want to play a part in the second phase, there is now a need for action. Föller sees the second phase of digitisation as the real challenge. Business models must be transformed by integrating big data, industry boundaries are disappearing. The successful employee of tomorrow has completely different competencies than the one of today. Whereas it used to be sufficient to have someone who knew about Big Data, this will soon no longer be enough. A company that wants to master the second phase needs an expert in Big Data with simultaneous industry knowledge. Executives will need to understand your industry AND data analysis to run a business. One of the tasks of modern executives is also to take the executives "from the old days" into the age of digitalization.

Changes wherever you look

One of the changes that everyone can observe is the blurring or disappearance of industry boundaries. Google and Amazon are currently competing with everyone, regardless of industry. Therefore, the hiring policy in companies must also change. In Germany, it used to be the case that attention was primarily paid to exact professional competence. Föller cites Nokia as an example. Just ten years ago, Nokia had the best engineers in the field of telecommunications, but then a company from California came along and expanded its focus from telephony to umpteen other areas of application. Here, telecommunications engineers, touch screen experts, AI researchers, speech recognition and navigation technicians came together and completely reinvented the telephone. Apple conquered the world with it. Another aspect that will affect hiring policies is demographics. In Germany there are already significantly fewer people between 25 and 35 than ten years ago. We need fewer specialists, but more generalists. But our specialists are currently not trained to do so. Föller considers a mixture of classic industrial knowledge with Big Data, IT, mobility and AI to be ideal. Currently, since there are hardly any such all-rounders, teams of various experts are being put together. Föller is not sure whether German systems are sufficiently prepared for the optimum exploitation of such swarm intelligence. Instead of honouring the best salesperson in a company, one should basically award a prize to the person who put together the best sales team.
But this is harder to measure and requires rethinking. If swarm intelligence is to be exploited, information must no longer be limited to specific individuals and must flow faster. Any company that manages to filter and process information quickly and in a targeted manner has a good chance in the age of digitalization. Since classic reporting and control systems are based on compliance and regulation, Föller sees the end of its life cycle. He is convinced that responsibility and trust will count in the future. Föller says that the most successful companies in the age of digitalization are based entirely on trust. This may be disappointed, but it is an essential part of the concept for success. So control no longer needs to be an integral part of management.

What makes modern managers?

The ideal manager is therefore an all-rounder who can have confidence in his subordinates. The new management culture demands a special kind of personality.  Föller considers a number of characteristics to be particularly important: Attentiveness to the abilities and needs of employees, the willingness to always learn something new and to develop continuously, a positive attitude, the conviction of being the architect of one's own fortune, the ability to separate communication and physical proximity, willingness to share (especially knowledge), an almost limitless trust and the ability to dispense with control. For Föller, this also includes saying goodbye to hierarchical thinking. Föller is convinced that Germany has hardly recognized the principles of the new management culture, let alone internalized them. It is not easy to build a culture of trust without slipping into naivety. It is now the task of every manager to work on himself and lead his employees into the new era.version)
Author: IAPM intern

Keywords: management, project management, digitalization, leadership culture, economy

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