The Importance of Authentic Leadership in Digital Transformation – How to Nurture the Human Side of Leadership

Digital transformation is all the rage today, and rightfully so. If you want to take your business to the next level of growth and stay competitive, you need to adapt to a fast-changing world. That includes incorporating AI, big data, machine learning, and other technologies into daily operations. But it requires more than the automation of processes and modifications in your organizational infrastructure: digital transformation is about rethinking the way you do business, it’s about effective change leadership, and last but not least: it’s about nurturing your people. In this article, we’ll explore the key skills essential for leadership during digital transformation and why leading with authenticity is crucial to succeeding.

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1. Intro: Leadership in the Digital Age

Modern society is constantly evolving, whether you look at technological developments, the economic situation, the geopolitical playing field, or social mores and values. Essentially, this is nothing new. The world has always been changing, and one of the great things about humankind is that we have the ability to adapt to those changes. Moreover, with every new zeitgeist – the prevailing spirit, mood, or cultural climate of a particular era – we’ve seen the rise of great leaders showing the way, shaping the world around them, and inspiring future generations to follow in their footsteps.

Keeping pace with the digital evolution

When it comes to the technological changes we face today, there is a difference from the past though – especially in the corporate arena. In the past, companies could take years, decades even, to adjust. Likewise, leaders had the relative luxury of time to understand the shifting business context, craft their vision, get the buy-in from their people and implement changes. Today, you can fall behind within no less than six months if you’re not adapting to digital disruption.

And it’s not always easy to keep up: according to a Harvard Business Review report, about 52% of enterprises on the Fortune 500 list have become obsolete since 2000. Many of those companies vanished from the radar because they couldn’t keep pace with the digital evolution of the past twenty years, or their CEOs were reluctant to do so. Leadership embracing digital transformation turns out to be a key driver for business success because it enables organizations to be more agile and innovative – which is essential in this digital age.

Drivers of digital transformation

The acceleration of technology in the workplace was impacted by the Covid-19 pandemic, which pushed a lot of organizations in almost every industry to step up their digital game. Consumers massively moved towards online channels, hybrid and remote working models exploded, and people’s views on a healthy work-life balance shifted.

That’s why many industries had to implement new tech projects, make profound process changes, and closely examine their company culture and how it fits into the current business landscape. Plus, driven by trends like AI, machine learning, and big data, many businesses are transforming their business models to meet the expectations of their customers, suppliers, and employees. And all these changes are moving with the speed of lightning.

Therefore, successful organizations that want to stay ahead of the curve need to keep transforming and foster an innovation culture while at the same time mitigating their employees’ fear of being replaced by technology.

That requires a new kind of leadership.

2. Leading Organizational Change

Organizational change can be a challenging and complex process, but it’s essential if you want to stay competitive and relevant in today’s fast-paced business environment. The crux of the matter is that change can make employees uncertain and tired. And now more than ever, they are just a bit fed up with change – to put it mildly. We’re in the middle of such disruptive and uncertain times, that the willingness to adapt has more or less collapsed. People are struggling with burnout and high levels of stress, resulting in lower engagement and the phenomena of quiet quitting: they just don’t feel like putting in the extra effort anymore.  

According to a recent Gartner survey, 74% of employees were supporting organizational change in 2016; today, only 38% say the same. Even worse, employees who experience this so-called ‘change fatigue’ are more likely to jump ship and apply for a job in a workplace where their managers are leading with authenticity and have a human-centric vision, rather than being purely driven by profit and increasing shareholder value.

The co-pilot vs. the backseat

Cian Ó Móráin, Change Management Research Lead at Gartner, explains why transformation processes sometimes fail so dramatically: “It’s related to the fact that 82% of workers recently surveyed by Gartner say it’s important for their organization to see them as a person, not just an employee. An open-source approach provides employees with a more human deal by actively engaging them in change initiatives. Employees want to co-pilot your change management efforts, not take a backseat.”

With an open-source approach to transformational change leadership, it’s all about involving employees in the decision-making process and valuing their input – regardless of their hierarchical position or digital savviness for that matter.

As an HR executive or CHRO, you need to encourage your people to openly share their ideas, opinions, and worries in a place they feel safe and included.

In other words: you have to understand that digital transformation leadership is much more about focusing on the human side than it is about technology.

3. Why You Need to Invest in Human-Centric Leadership

If an organizational change in itself is a challenge, digital transformation (DX) is even more multi-faceted. It deeply affects your people in their daily routine, but also in the way they interact with each other and how happy they are with their job:

• First of all, DX changes how work is done by introducing new tools, technologies, and processes that help people to work much faster and more efficiently: think of the automation of boring, repetitive tasks, real-time collaboration across different time zones, and greater access to data
• Secondly, digital transformation changes where work is done. With the advent of remote work, people can work from anywhere today – as long as they have access to the necessary technology and infrastructure. This can increase flexibility and create a better work-life balance, but it also requires your employees to be self-motivated, self-disciplined, and able to manage their time effectively
• Thirdly, digital transformation changes who does the work. As technology like AI is able to take over so many tasks, some jobs may become obsolete while new roles require different skills and expertise. That means your people need continuous upskilling and reskilling
• Finally, thanks to technology, your teams can work anytime, anywhere. This gives them more flexibility, but it also blurs the lines between their private and professional lives, which in turn can lead to stress and the feeling of always being ‘on’

You might even wonder if ‘digital transformation’ is the right term here. After all, it’s the employees (and also you as an executive) who undergo the most profound transformation before, during, and after the process of digitalization. That’s why you should always put your people central. If you don’t take the right approach, they will resist. But with a human-centered vision, you are more likely to get their buy-in and commitment.

Prioritizing the development of resilient teams that are adaptable, collaborative, and agile in the face of change is, therefore, crucial to get the job done.

4. Building Resilient Teams

One way to build resilience is by providing your team with the necessary tools and resources to develop new skills and competencies. According to the World Economic Forum, we’re entering a fourth industrial revolution that will change our lifestyles, career opportunities, and social interactions through unparalleled technological advancements. Consequently, as these disruptive technologies become increasingly essential, employees must upskill and reskill to meet these new demands.

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Creating a future-proof workforce involves offering training programs, implementing a mentorship or buddy system, and giving your people access to internal mobility opportunities. Additionally, leaders should foster a culture of psychological safety where employees feel comfortable taking risks and speaking up when faced with challenges.

5. What Are the Key Digital Transformation Leadership Skills?  

Creating such a working environment is where the importance of emotional intelligence in leadership comes into play. It’s a crucial skills set to guide your people through any transformational process:

• Leading with emotional intelligence is important during digital transformation because change can often create a sense of uncertainty, anxiety, and stress among employees. When you’re able to recognize and understand the emotions of your team members and can talk to them with empathy and support, you can help to ease the transition and build trust and rapport

• Emotional intelligence allows you to effectively communicate with your team members, and understand their perspectives and concerns. That’s why you need to tailor your approach to meet individual needs. This helps to create a sense of inclusivity and security and can lead to increased employee engagement
• Emotionally intelligent leaders are also better equipped to handle conflicts and difficult conversations that may arise during the process of digital transformation. They can manage their emotions and help to de-escalate tense situations using active listening skills and open communication

Building positive relations and leading with purpose

Emotional intelligence is a characteristic we often see in transformational leaders. This leadership style involves motivating and empowering employees while striving to reach organizational goals and develop a shared vision. They’re great at building positive relationships on all levels of the organization, facing challenges with clarity, and leading with purpose – which is something especially younger generations on the work floor resonate with.

They’re often considered authentic personalities by their peers and staff, as they’re completely comfortable with staying true to themselves and their personal and professional values. This, in turn, helps to build loyalty and credibility with their teams, which will ultimately smoothen the process of digital transformation and organizational change.

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Transformational leadership development

Some people are born with a high level of emotional intelligence, potentially making them successful transformational leaders. But emotional intelligence is a skill set that can also be developed over time with the right practice and training. By doing so, you can enhance your transformational leadership skills and let your teams thrive – despite uncertain and disruptive times.

6. Innovative Leadership Strategies

Breakthrough leadership in the digital age is all about having the right mindset to develop an innovative transformation strategy. Here are some ways to develop transformational leadership techniques and create a roadmap to success:

• Develop a clear vision: digital transformation requires a new way of thinking and acting on all organizational levels. That’s why as a leader, you need to develop a clear vision that aligns with your organization’s goals and objectives. Ensure that your team understands your strategy and is committed to achieving it
• Build a growth mindset: encourage your team to be innovative, try new things, and take ownership. Create a safe space where they can experiment and fail without fear of retribution. Recognize and reward employees who come up with innovative ideas that contribute to the organization’s transformation process
• Foster collaboration: digital transformation involves multiple departments and stakeholders, so it’s crucial to foster collaboration among them. Encourage cross-functional teams and break down silos to make communication and teamwork easier
• Lead by example: don’t underestimate the importance of your leadership in the workplace. As an executive, you must lead by example. Embrace digital technology and use it in your daily work. Be open to learning and understanding new technologies (like AI and data analysis) and continuously improve your own digital skills. It will help you to guide your team in the right direction
• Communicate effectively: cultural acceptance of digital transformation is often an obstacle that many leaders have to deal with. That’s why clear communication is essential to make sure that all stakeholders understand the rationale behind digital transformation efforts and their role in achieving success. Encourage your team to ask questions, provide feedback, and participate in discussions about the way DX affects their work and the company
• Invest in training: digital transformation requires new skills and knowledge, so it’s essential to invest in training for yourself and your team.
• Celebrate success: finally, don’t forget to recognize and celebrate successes along the way. If you acknowledge and reward progress, employees are more likely to feel motivated and committed to the digital transformation journey

Leading through ambiguity requires a clear vision and strategy, strong communication and collaboration skills, and the ability to motivate others to embrace change. At Lepaya, we help teams and future leaders develop those skills by offering innovative learning experiences and Power Skills training.