What’s NXT: The competent management team of the future
All organizations live in a landscape of obligations and opportunities, and as that landscape changes, so do the skill requirements of the management teams who are tasked with leading the business. In this article, we take a closer look at the competences that digitalization will require of each member of the future competent management team.
New technology has always been a strong driver of how value creation and working life has evolved. The steam engines that initiated the industrial revolution were the beginning of a change that lasted for around 200 years. It is not bold to claim that there must have been noticeable differences between sitting in the 1790s equivalent of a management team compared to discussing the issues that permeate the meeting room of a multinational service company 200 years later.
After all, the impact of technological developments affected not only what could be produced and how it was produced – increasing productivity contributed to growing organizations with a higher degree of specialization among both employees and managers. Changes in the values and expectations of society's citizens over time also influenced perceptions of working conditions and the working environment. This in turn gave rise to entirely new areas of knowledge for managers as a growing body of legislation placed more stringent demands on those wishing to manage and distribute work in an organization.
There is no alternative to exploring the possibilities of new technologies
We are now at a point in history where machines have become so sharp and accessible that more and more tasks, practical as well as cognitive, can be handed over to them. This means huge opportunities to cut production costs. In turn, it means that whether we are a commercial operator in a global market or a public organization providing services to citizens, there is really no alternative to exploring the possibilities brought by new technologies.
Refraining from automating when everyone else is doing so means in many cases that producing businesses are heading for negative balance sheets when customers choose the lower prices of competitors. For the service provider, private or public, non-existent or slow digitization means increasing dissatisfaction when target groups perceive accessibility and feedback as sub-standard.
Productivity growth as a social sustainability issue
The need to harness technology becomes clear when looking at things with the following analogy: what would Sweden be like today if the entrepreneurs of the 17th and 19th centuries had refrained from mechanizing production that until then had been carried out by hundreds of thousands of hands, equipped with tools that in many cases had looked the same for hundreds of years? The comparison may seem extreme, but it is in fact more relevant than ever. The economic development of modern Sweden was based both on strong innovations and on an industry that, thanks to high productivity, was able to compete very well in a growing world market.
Sweden’s future development is as dependent on highly productive, successful exports as ever, and competition is fierce. The public sector is also not without its reasons to embrace the new technologies. Alongside a glaring skills shortage, municipalities and regions are grappling with the population's growing need for health and care services. Taken together, the need for business to be globally competitive and the public sector to increase productivity make digitalization a social sustainability issue. A question to which all of this country's management teams need to find answers to.
Digital transformation is about optimizing for the new conditions
Digitalization can be defined as the introduction of new and smarter technologies to create what is essentially the same value. The new technology changes work practices and sometimes even culture, but to a relatively limited extent.
Digital transformation, on the other hand, can be described as asking the question "if we were to create the same value as now, but based on the capabilities of technology today and tomorrow, how would we best work and organize ourselves?". A digital transformation is an attempt to reach the full potential of technology. It is then quite common to see entirely new value creation emerge.
Putting technology at the center in this way may sound radical, but it is really nothing new. Already today, our organizations and ways of working are shaped by the tools we use. But, because we inherit technology and take it for granted, it is perceived more as a support than as a shaping force. By the same token, digital transformation involves changes in all aspects of the organization: leadership, HR, IT and cybersecurity, culture, monitoring, decision-making, innovation, interaction with suppliers and audiences, sustainability practices and so on.
Digital transformation thus involves a long journey of change through an often unknown landscape. The journey makes special demands on the leaders, i.e. the management team: if optimizing business-as-usual is equivalent to an all-inclusive charter trip, digital transformation is an expedition on a foreign continent. This has implications all the way down to employees' personal relationships.
The competent management team of the future: the new job requirements
All of this adds up to the fact that virtually all management teams face similar and partly new challenges. As in the past, developments in technology and work life are changing the list of competencies required to run a successful business. Obviously, different industries and responsibilities require different breadth and depth. But, for a management team to have meaningful conversations that lead to high quality decisions, all members need to share a minimum level of understanding. In the same way that we are now expected to know the basics of, say, health and safety measures, the organization’s key software or even strategy development, the skilled management team of the future needs to have a handle on four areas of knowledge.
1. Technical literacy
Why is blockchain technology attracting so much interest? What can be done with natural language processing? Is there a clear definition of artificial intelligence? Technological literacy means having a general understanding of what technology can do today, where it seems to be going tomorrow, but also understanding what still counts as science fiction. A technically literate person also knows the most common concepts related to the application of technology in their field of activity.
For the vast majority Sweden's management teams, there is no need to be able to program or set advanced requirements specifications for IT suppliers. But just as a newspaper reader benefits from an understanding of society, historical events and a general knowledge of the natural sciences and humanities, the digitalizing management team benefits from sharing a basic body of knowledge.
With technical literacy in your skillset, the ability to inspire and motivate employees on the digital transformation journey also increases. This is especially true in organizational cultures that carry a wait-and-see attitude towards technology. The curiosity of leaders can inspire employees to explore the possibilities for better service and need satisfaction for the customers, students or patients who should be at the center.
Do you need to bring forth an understanding of digitalization among your employees? Kairos Future has helped several organizations motivate digital adoption through inspirational sensemaking talks and exploratory workshops, for more information contact Fredrik Torberger.
2. Work data-driven
The digitalization of work and communication means that more and more processes are generating data and that more and more systems can be connected. The data includes insights into user behavior and needs, bottlenecks in interfaces and infrastructures, in short, starting points for innovation and wise decision-making.
The ability to extract insights from data can be likened to giving the organization a new way of experiencing the world. The skilled management teams of the future work data-driven and understand which aspects of the business can and should be monitored and analyzed.
Starting to work data-driven is not transformative in itself – it does not necessarily bring cascading consequences across the organization. Instead, the journey begins with identifying what data sets already exist and from there on, developing meaningful metrics and a routine for monitoring.
3. Innovation management
Digitalization, but also rising sustainability ambitions, means that taking new products, services and ways of working from idea to implemented reality. There are people with a seemingly innate ability for this – often referred to as entrepreneurs. For the rest of us, there are systems and knowledge to be embraced. The skilled management team of the future understands the culture and processes that lead to successful innovation. With this knowledge, the chances of supporting employees who have an innovation mission are greatly increased.
Ensure high innovation capacity by equipping employees with innovation management skills. The Kairos Future Academy calendar is available here. Innovation leadership is also touched upon in this report on leading on the edge of chaos. If you need support with an innovation process or strategic-level conversations about becoming more innovative, contact Katarina Stetler.
4. Leading self-organizing teams
A digital transformation is, as previously mentioned, an expedition into often uncharted territory. Like the mapmakers back in the old days, organizations need to search in multiple directions to discover value in the landscape of digitalization. This means innovating while keeping the regular business running. Organizational complexity is increasing, and this motivates working in self-organizing teams.
Strong centralized and operational leadership means that it is up to the core team - the management team - to process information and make decisions that determine the whole organization’s speed ahead. In addition, employees' own drive is inhibited, while collective intelligence is dampened. The alternative is more self-organized teams, an idea that has recurred in various forms in recent decades but which few organizations have applied. Those that have taken the dive have experienced truly remarkable effects, including a rapid decline in absenteeism.
We believe that the competent management team of the future will have a different set of leadership principles than those today. Not just because self-organization is the latest management hype, but because today's complex workplace simply cannot be centrally managed. Change is the only constant, and for that we need management teams with the courage, confidence and knowledge to empower employees to purposefully and autonomously explore the organization’s future value creation.
Where is your organization on the journey to an effective, innovative and motivated organization with a high degree of self-organization? Feel free to contact us for a first conversation, Nina Al-Ghussein Norrman or Fredrik Torberger.