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Leadership Skills Requirement in Digital Age Information 2022

   

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Diskussionspapier des
Instituts für Organisationsökonomik

11/2018

Identifying Leadership Skills Required
in the Digital Age

Milan F. Klus/Julia Müller

Discussion Paper of the
Institute for Organisational Economics
Leadership Skills Requirement in Digital Age Information 2022_1
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Diskussionspapier des
Instituts für Organisationsökonomik
11/2018

November 2018

ISSN 2191-2475

Identifying Leadership Skills Required in the Digital Age

Milan F. Klus/Julia Müller

Abstract

Is leadership changing in an increasingly digitalised work environment? This question arises
in corporate practice, societal debates, and in business management research. The evolution of
digital technologies changes working environments considerably and creates new challenges
for executives. So far, however, only little research has been conducted on how these chal-
lenges and technology-driven changes are associated with altered requirements for the skill
set needed by executives. In this paper we bridge that gap by applying a three-stage research
design. First, we develop a novel conceptual framework in which we categorise leadership
skills and associate them with tasks, management level, and leadership experience. Building
on this, we conduct semi-structured interviews with executives and systematically investigate
job advertisements at the management level. Our interview results show that communication
skills, subject-specific knowledge, self-organisation skills, and self-reflection skills are con-
sidered particularly relevant in times of rapid technology-driven change. Furthermore, many
interview participants identify empathy and an open-mindedness towards the new as crucial
personal traits. Our job advertisement analysis further reveals that executives need to be able
to speak English, have IT skills, and be flexible, motivated, and stress tolerant.

JEL-Codes: M12, M15, M51, M54, O32, O33
Leadership Skills Requirement in Digital Age Information 2022_2
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Identifizierung erforderlicher Führungsfähigkeiten
im digitalen Zeitalter

Zusammenfassung

Verändert sich die Führung in einem zunehmend digitalisierten Arbeitsumfeld? Diese Frage
stellt sich in der Unternehmenspraxis, in gesellschaftlichen Debatten und in der betriebswirt-
schaftlichen Forschung. Die Entwicklung digitaler Technologien verändert die Arbeitswelt
erheblich und stellt Führungskräfte vor neue Herausforderungen. Bislang wurde jedoch nur
wenig untersucht, wie diese Herausforderungen und technologiegetriebenen Veränderungen
mit den Anforderungen an die von Führungskräften benötigten Fähigkeiten verbunden sind.
In diesem Artikel schließen wir diese Lücke unter Anwendung eines dreistufigen Forschungs-
designs. Zunächst entwickeln wir ein Framework, in dem wir Führungsfähigkeiten kategori-
sieren und mit Aufgaben, Managementebene und Führungserfahrung verknüpfen. Darauf auf-
bauend führen wir halbstrukturierte Interviews mit Führungskräften durch und untersuchen
systematisch Stellenausschreibungen auf Führungsebene. Unsere Interviewergebnisse zeigen,
dass Kommunikationsfähigkeit, fachspezifisches Wissen, Selbstorganisationsfähigkeit und
Selbstreflexionsfähigkeit in Zeiten eines schnellen technologiegetriebenen Wandels als be-
sonders relevant angesehen werden. Darüber hinaus identifizieren viele Interviewteilnehmer
Empathie und Aufgeschlossenheit gegenüber dem Neuen als entscheidende persönliche Ei-
genschaften. Unsere Analyse von Stellenausschreibungen zeigt außerdem, dass Führungskräf-
te insbesondere englische Sprachkenntnisse und IT-Kenntnisse benötigen und zudem flexibel,
motiviert und stresstolerant sein sollten.

Im Internet unter:

http://www.wiwi.uni-muenster.de/io/forschen/downloads/DP-IO_11_2018

Westfälische Wilhelms-Universität Münster

Institut für Organisationsökonomik

Scharnhorststraße 100

D-48151 Münster

Tel: +49-251/83-24303 (Sekretariat)

E-Mail: io@uni-muenster.de

Internet: www.wiwi.uni-muenster.de/io
Leadership Skills Requirement in Digital Age Information 2022_3
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Identifying Leadership Skills Required in the Digital Age

1. Introduction

Today, it would be difficult to find people or organisations that are not engaged in several
aspects of digitalisation on a daily basis (Phelps, 2014). The growing use of modern technol-
ogies in organisations (Hunt, 2015) influences the competencies, interpersonal expectations,
and self-awareness of the workforce, as well as the way that work is carried out and structured
(Colbert, Yee & George, 2016). Furthermore, modern technologies enable new ways of com-
municating and interacting with each other (Phelps, 2014). An example is remote work, mak-
ing a nine-to-five workday in the office less and less meaningful (Tarafdar, 2016). These de-
velopments create new career opportunities, while, on the other hand, shifting traditional ac-
tivities considerably or even making them obsolete (Hunt, 2015).

In recent literature, authors use different terms to label modern leadership, such as digital
leadership (El Sawy et al., 2016), e-leadership (Avolio & Kahai, 2003; Phelps, 2014), and e-
HRM (Bondarouk & Ruël, 2009), where the titles are used as umbrella terms covering the
topics of digitalisation, IT and HRM. When analysing the differences between traditional
leadership and leadership in the digital age, it is remarkable that these differences are mainly
attributed to a changing work environment (Avolio & Kahai, 2003), with computer-mediated
communication playing a pivotal role (Phelps, 2014). Yet, even though the fundamentals of
leadership do not seem to have changed considerably (Hunt, 2015), technology-driven devel-
opments in the work environment induce executives to rethink relevant issues such as corpo-
rate strategy, business models, and platforms (El Sawy et al., 2016). It is thus essential to un-
derstand how traditional settings differ from virtual environments (Phelps, 2014), to recognise
the importance of digital technology for leadership concepts, to identify challenges, and to
finally derive necessary leadership skills.

This paper aims to help identify relevant leadership skills in this age of digitalisation. The
remainder of the paper is structured as follows. In Section 2 we conduct a systematic literature
analysis to identify leadership skills that are generally considered relevant. We systematise
these skills in a novel framework and highlight skills that have been linked to the topic of
digitalisation in the underlying literature. This framework provides the theoretical basis for

Acknowledgements: This project benefitted from our praxis cooperation with the Dr. Schwerdtfeger Personalberatung,
Emstek, Germany, and we would like to thank the whole team, especially Fabian Leupold for their help organising and con-
ducting the interviews. We would like to thank Julius Merkens and Mareike Staufenbiel for their valuable research assistance
and Prof. Dr. Alexander Dilger for worthwhile suggestions. We alone are responsible for any remaining errors.
Leadership Skills Requirement in Digital Age Information 2022_4
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our empirical investigation, in which we examine digitalisation-related leadership challenges
and identify skills that are particularly required. In our investigation we use semi-structured
interviews and a systematic analysis of job advertisements. Section 3 provides an overview of
our methodological approach and data. Our results are presented in Section 4 and discussed in
Section 5. Finally, we conclude in Section 6.

2. Literature Review and Leadership Skill Framework

2.1. Leadership Challenges Arising in the Digital Age

Technological developments such as machine learning and robotics in conjunction with an
increasing automation of routine tasks lead to difficulties both for executives and employees
(Gratton, 2016; Tarafdar, 2016). For executives, questions arise such as how to manage virtu-
al teams, how to handle multigenerational groups with different technology preferences, how
to support a functioning knowledge transfer (Gratton, 2016), and how to create a mindful rela-
tion to ubiquitous digital technologies (Tarafdar, 2016).

In a virtual work environment, face-to-face communication and other traditional social mech-
anisms no longer prevail, making it necessary to carry out new ways of coordinating team-
work and communicating (Townsend, DeMarie & Hendrickson, 1998). A study conducted by
Barley, Meyerson & Grodal (2011) shows that inappropriate management of technologically
mediated communication leads to interruptions in employees’ working processes and increas-
es their perceived stress levels. Similar statements can be found in Colbert et al. (2016), who
identified a continuous checking of e-mails at work and at home as “ingrained habits for
many people” (Colbert et al., 2016, p. 736). Accordingly, employees spend much of their time
answering e-mails, which can lead to the perception of being overloaded. Interestingly, the
more time employees spend dealing with their e-mails, “the greater their perceived ability to
cope” (Barley et al., 2011, p. 887). Sykes (2011) confirms that e-mails have become a signifi-
cant cause of interruption during a workday. While the internet, e-mails and in some cases
even social media have become standard tools for doing work, “they also provide easy access
to family, friends, online-shopping and other nonwork purposes while at work” (Colbert et al.,
2016, p. 734). Being electronically connected (to work) at all times makes a clear-cut separa-
tion between work and leisure challenging, which in turn can end up in work-nonwork con-
flicts (Butts, Becker & Boswell, 2015). If managers are not able to find appropriate ways to
establish boundaries between work and leisure time, organisations might face the fallouts of
information overload, technology addiction, and techno-stress (Tarafdar, 2016).
Leadership Skills Requirement in Digital Age Information 2022_5
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Another potential for conflict arises from the age structure of the workforce. In many cases,
younger employees are more familiar with digital technologies than their older colleagues. If
older employees work together with younger co-workers in a team, the different technology
knowledge and preferences can lead to conflicts (Colbert et al., 2016). Managers should be
able to identify the corresponding divergence at an early stage and avoid escalation. Finally,
the issue of cyber-security needs to be considered. Modern technologies can bring about sig-
nificant improvements through information capturing and processing, but they also make or-
ganisations more vulnerable to cyber-attacks (Lynch & Gomaa, 2003). Executives need to be
aware of the respective benefits and risks to ensure adequate use.

Some of the changes that are needed to address today’s organisational challenges may be in
the design of the technology itself (Colbert et al., 2016), while others may require rethinking
leadership-related topics. The potential associated with appropriate use of digital technology
and the role that leadership plays in this context will be outlined in the next two subsections.

2.2. Technology-Driven Leadership Potentials

Even though digital technology is ubiquitous in modern work environments, its potential is
often only used to an insufficient degree (Colbert et al., 2016). Even entry-level employees
may bring high levels of digital know-how into organisations (Colbert et al., 2016), which can
be valuable and thus should be exploited. Employees have access to a wealth of information
that can be used to create multifaceted services at reduced costs (Colbert et al., 2016), with
digital technology enabling collaboration among geographically distributed team members
(Phelps, 2014). On a virtual level, an optimal composition of teams can be reached without
resulting in clashes within the existing organisational structure (Townsend et al., 1998).
Among the tools enabling virtually based forms of work and collaboration are web-based cus-
tomer relationship management systems, web-based collaboration tools, and project or con-
tent management systems, ranging from simple applications to sophisticated suites of tools
(Phelps, 2014). Digital tools may also enable employees to track and evaluate their working
processes, making it easier for them to identify productivity issues (Gratton, 2016).

Overall, managing digital technologies efficiently can bring about many benefits. With the
phrase “Anyone can be as digitally sophisticated as they choose to be, Hunt (2015, p. 50)
points out that the attitude of both managers and employees is essential for making the best
possible use of modern technology.
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2.3. Role of Leadership in the Digital Age

As technological innovations need to be implemented appropriately, leaders seem to be criti-
cal to “laying the foundation for and facilitating digital transformation” (Hunt, 2015, p. 51).
To be able to do this, leaders need to be aware that social and digital technologies change the
nature of work, and they need to adapt their way of working accordingly (Hunt, 2015). Fur-
thermore, leaders need to serve as role models, promote and perpetuate cultural values en-
couraging a supportive attitude towards change, implement appropriate governance and or-
ganisational structures, and ensure employees have profound digital know-how (Day et al.,
2014). Executives also need to remove obstacles to the use of new technologies and provide
opportunities for employees to work with them (Bondarouk & Ruël, 2008).

Furthermore, executives should be the ones to discover ways of supporting a shift towards
flexibility, the flow-driven use of digital tools, and a mindful relationship with digital tech-
nologies (Tarafdar, 2016). Gratton (2016) found that many people use digital technologies
more often in their everyday life compared to at work, and, accordingly, they associate posi-
tive technology-related influences with their daily lives rather than with their work. The estab-
lishment of mindful usage patterns for new technologies is a particularly relevant task of ex-
ecutives, considering the potential work-nonwork conflicts that may arise if employees feel
permanently attached to work. According to Colbert et al. (2016), such mindful usage patterns
are characterised by “time for focused thinking, opportunities for recovery, and effective col-
laboration” (Colbert et al., 2016, p. 735).

To retrieve the potential of virtual teamwork, executives should also be able to leverage virtu-
al collaboration tools like Yammer or Slack for communication, Google Drive for collabora-
tive writing and Trello for collaborative project management (Colbert et al., 2016). In this
context, leaders should not only focus on their own preferences but take into account the dif-
ferent preferences of the individuals within their teams as well (Tarafdar, 2016). Further, vir-
tual teams might feel less connected to their organisation, making it crucial that leaders define
and communicate the team’s role within the greater mission of the organisation (Townsend et
al., 1998). Identification of employees with their organisations can both increase intrinsic mo-
tivation and promote a sense of connectedness within the team and with the organisation. Fur-
thermore, leaders need to clarify their expectations about employees performance and devel-
op novel mechanisms to supervise and control geographically dispersed team members
(Townsend et al., 1998).
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2.4. Literature-Based Leadership Skill Framework

As Friedman, Fleishman & Fletcher (1992) distinguish the three core activities of leadership
as personnel supervision, project management, and strategic planning,1 we can now analyse
the skills a leader would need to deal with these activities. Katz (1974) defines three basic
skill categories to be crucial for successful leadership: technical skills, human skills, and con-
ceptual skills. To develop our framework, we first compare and combine the core leadership
activities and the basic leadership skills (see Figure 1).

Figure 1: Connection between Core Leadership Activities and Basic Leadership Skills

Comparing the core activities and basic skills, we identify a noticeable connection between
them. In Figure 1 we use bold lines to indicate a strong relationship between elements and
dashed lines to denote a comparatively weaker connection. The underlying consideration is
that specific core activities require certain basic skills to be particularly strong. For example,
strategic planning will most likely require highly developed conceptual skills, as a wide varie-
ty of information must be taken into account. Nevertheless, in many cases strategic planning
will also require adequate interaction with employees (human skills) and sound knowledge of
different techniques (technical skills), albeit not to such a high degree.

Demarcating skills from traits is also important, as traits are stable constructs, while skills
need to be developed (Lord & Hall, 2005). We introduce the concept trait into our framework
and partition traits from skills to emphasise the difference between the two concepts. Personal
traits describe something that persons have or bring with them and cannot be learned from

1 Other categorisations of leadership activities exist, see for example Yukl (2012).
Leadership Skills Requirement in Digital Age Information 2022_8

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