Digital economy leadership style
During the last couple of years, we have been working intensively with large firms that aspire to drive digital change, and also with growing companies whose business models are based on digital platforms. In both cases, we have experienced a significant difference in mindset and culture compared to large traditional firms. This article highlights the main elements of these cultural differences.
1. Speed and agility
In a company with a digital mindset, speed and agility are fundamental criteria for success. Real time relationships with clients, stakeholders, employees and suppliers are crucial in order to disrupt traditional business models. In innovative industries, speed is often of the essence in order to capture market opportunities before other players become ready to enter the innovator’s niche, and lawmakers introduce regulations.
Even as digital companies grow and develop, they understand the importance of speed and keep their start-up agility and ability to make quick decisions. Speed is one of the main value propositions that they offer to their clients; in a disruptive business, the innovator must often bet against the law, and so the only long-term strategy element is the innovator’s own technology platform – everything else consists of tactics which will need to be adjusted depending on market developments. For example, in online forex trading, the location of the headquarters and the licensing entities may change after every couple of years depending on changes in the regulations.
2. Use of technologies and continued improvement
Digital companies typically tend to hire younger managers, since a successful executive in a disruptive environment should be passionate about technologies and continuing improvement. In many cases, these features tend to be found in the younger generation. Digital executives should not be afraid to experiment, and should be interested in continued learning.
Challenging the status quo and proactively looking for new technological solutions and partnerships are important elements for success in the digital world. For example, many FinTech firms are disruptors in financial services but nevertheless cooperate extensively with banks, telcos and retailers, while their services are available on tablets, smartphones and other devices. Their business models are highly diverse based on a very creative, innovative technology-based approach.
3. Leadership, motivation and talent
A leader in a digital culture is often the founder of a company and sometimes also an owner. A digital leader should convey the pride and the mission of being a disruptor and innovator with ambitions for technology-driven global expansion. Digital organisations are flat and there is no ethnocentric head office, but a high level of empowerment and autonomy throughout all layers of the organisation.
The leadership culture and style is based on high levels of freedom, teamwork, virtual offices and sharing. There is no scrambling for status, but passion and drive for a common mission. At the same time, the passion must be backed up by an advanced level of knowledge and technical skills in finance and technology. The digital economy is not for mediocre people; only the smartest, fastest, and most self-disciplined will succeed.
4. Embracing diversity and employment branding
In digital culture, employer branding is very strong and includes tribal elements – sports idols are sometimes used to communicate with the customers and staff. Offices are open-plan and represent the most modern approach to space management. The dress code is generally very informal, and allows individuals to express themselves. The culture is embodied by common celebrations of success, joint trips to sporting events and very open, fast and transparent communication.
Our digital clients embrace diversity of all kinds, and there are often cultural similarities among platform-based companies (e.g. Ferratum Bank, Facebook, and AirBnB). They see the world as a common space in which they can grow their businesses and attract the best talent.
5. Transparency, no bureaucracy, performance management
As part of the sharing culture, information is available to anyone at all times. There are no power struggles; only transparent, sharing behaviour is accepted. The digital environment shuns and disapproves of hiding information, attempting to develop your own career on the back of other people’s success, and twisting the facts for the benefit of your own internal PR. The single technology platform allows every action to be measurable, and thus the approach to decision making is very rational and analytical, yet very fast and transparent.
The above elements of digital culture and behaviour allow innovative technology firms to disrupt markets on a global scale, making them very attractive employers for the most talented and ambitious managers.
Evita Lune joined Pedersen & Partners in 2005; she is a Partner, the Country Manager for Latvia and Head of the Retail Practice Group. As Partner, Ms. Lune also takes on regional oversight, and through completing numerous senior level assignments, Ms. Lune has established strong cooperation with clients in Poland, the Baltics, Scandinavia, Russia, and CIS across such sectors as: FinTech, Consumer Goods, Retail, Pharmaceutical, Manufacturing, and the Professional Services sectors. Her previous experience includes three years with the Stockholm School of Economics in Riga as the Executive MBA Program Director and six years with Shell in international and regional marketing management functions in Riga, Budapest and Brussels.
Pedersen & Partners is a leading international Executive Search firm. We operate 56 wholly owned offices in 52 countries across Europe, the Middle East, Africa, Asia & the Americas. Our values Trust, Relationship and Professionalism apply to our interaction with clients as well as executives. More information about Pedersen & Partners is available at www.pedersenandpartners.com
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