The Digital World Demands a New Model for Leadership
As digital disruption wreaks havoc on legacy businesses, the average life-span of public companies was reported to have dropped from 55 years to 12 years last year. In Amit Mukherjee’s “Leading in the Digital World,” which comes out April 6, Mukherjee shares what steps legacy businesses can take to win at digital. He does this by suggesting a model for leadership that reflects today’s digital technologies.
Throughout the book, Mukherjee looks at how digital technologies are upending the nature of work and organizational structures and most importantly, how leaders need to change to unleash business creativity. Mukherjee writes, “business creativity is the ability to look past traditional approaches to derive new approaches to doing business.”
To put the digital world into context, Mukherjee starts by analyzing the two business epochs which took place in the 20th century. The first epoch was scientific management. Its founder, Frederick Taylor, determined that productivity could be improved if workers were focused upon narrow tasks and prescribed business processes. This take no prisoners style of leadership favored authoritarian leaders in the 1980s like ITT’s Harold Geneen. For those who don’t remember that far back, Geneen ran his businesses on a simple formula: return on assets (ROA). One division that I knew sold all its office furniture two weeks before the end of the quarter to make its ROA number. This attitude depersonalized the workforce. A professor of mine in business school suggested it wasn’t a good idea to build work relationships because it could impact one’s career as you moved into a supervisory role.
Fortunately, the second epoch hit just as I started a second master’s in strategic planning. I remember reading books like “Theory Z” and “In Search of Excellence.” Here, US companies lost their relevance against Japanese multinationals. This epoch, writes Mukherjee, “focused on quality and statistical process control negated many aspects of Taylorism.” The reason for this is quality approaches required collaboration amongst workers and raised educational requirements for entry level jobs. This led to Quality Control Circles at companies like Honeywell. Under JJ Renier, they became an institutionalized form of management.
According to Mukherjee, the digital epoch is profoundly different. While the 20th century focused on driving productivity, the digital epoch focuses on creativity rather than productivity. Jeanne Ross, in her book “Designed for Digital” agrees, stating, “digital business design aims to make a company agile so that it can create an innovative and constantly evolving portfolio of digital offerings in response to rapidly changing technologies and customer demands.
