Management’s Leadership Role in the Digital Transformation

Frederic Dufour / Apr 20 , 2023

Building on AI to Shape the Organizations Future

In the article “Bridging the Gap Between AI and Management“, we uncovered the depth and breadth of artificial intelligence’s role in modern management. We understood how AI isn’t just a tool, but a collaborator – one that amplifies decision-making while preserving the essence of human intuition and expertise. As we venture further into the digital era, the symbiosis between AI and management becomes even more significant. This article extends our conversation, emphasizing the role of management in steering the ongoing digital transformation and why leadership is at its helm.

Mastering potential challenges

The forces of change are constantly evolving at the edges of the organization. Leaders are at a pivotal point in deciding the pace and scale of these changes, and how they will shape the organization’s future.

In the early days of digital transformation, installed tools and software served primarily as digital assistants. A general consensus emerged that the selection of tools and software, the implementation sequence and related communication should be delegated to experts and IT departments. In short, managers delegated to experts responsibility for an area in which they had little or no competence. This approach was considered good management.

However, when digital transformation begins to reshape the very essence of the organization and affects the nature of its interactions with employees, customers and subcontractors, entrusting such transformation to experts and IT managers assigns them responsibilities that go far beyond their original remit.

And as digital transformation gains momentum in the decision-making process, managers are being asked to regain control over areas they had previously delegated to third parties.

Above all, they are expected to actively support this transformation process. However, it is essential to make it clear that this change is not simply a “necessary evil”. In fact, quite the opposite is true. When properly understood and managed, it can be a vector of real opportunity. It has the potential to positively redefine the traditional employer-employee relationship, creating a new dynamic within the organization.

At first glance, the digitization of an organization may raise concerns about job cuts. However, the changes underway must be understood, first and foremost, in terms of roles. While some roles will disappear or change in the organizational chart, others will emerge as a result of the organization’s evolution. This is inevitable, as organizations continue to evolve as they always have.

Managers who understand the profound nature of the transformations at work and assume leadership of the paradigm shift underway will not see it through the prism of redundancies. Quite the contrary, in fact. These managers will recognize that everyone’s knowledge and skills are needed to make this transition a success. A value organization doesn’t destroy jobs, it redefines them.

Exercising Leadership

Modern organizations cannot simply be defined as robotized. Robotization does not lead to a radical change in the functional and organizational structure of the organization. Robotization is part of the evolution of professions that has accompanied each economic revolution, be it agricultural or industrial.

The present revolution is primarily methodological. Now in its mature phase, digital transformation is more organizational than technical, and more managerial than robotic. It affects the way in which information is collected and shared, decisions are made and communicated, and the way in which stakeholders are involved in the organization’s future.

When led by the manager, the change happens more swiftly, coherently and comprehensively. It is accepted more readily by stakeholders despite the reluctance they may feel and must be acknowledged.

The management’s grasp of the new methods and skills, including the ones related to artificial intelligence and algorithms, boosts its confidence and legitimacy in this new phase of the digital transition.

The seven dimensions of leadership in digital transformation

This leadership can be expressed in the following seven dimensions of the transition: the identification of needs, scheduling, communication, implementation, training, performance monitoring and continuous improvement.

Identification of needs, by modelling the organization’s value fractal, comparing the organization’s reality with the industry’s best practices, listing the methodologies and technologies available and those that will emerge shortly, interviewing stakeholders to understand their needs and concerns, and drawing up a list of indicators that reflect the organization’s values and objectives.
Scheduling, by designing a multi-annual transformation plan that defines the phases of digitalisation and details, for each of these phases, the tools, the processes, the actors involved and the objectives to achieve in relation to the creation and regular monitoring of value indicators.
Communication, by presenting and defending the plan to the stakeholders, outlining the aims and means that will be implemented without obscuring the consequences it will have on the company’s employment and organizational structure.
Implementation, by monitoring the progress of the various phases of the plan, by committing to the selection of the internal and external resources involved in the various projects of the plan and by allocating the necessary resources, including time, to carry it out.
Training, by developing personalised support for the stakeholders, by establishing partnerships with training institutes and by encouraging the cross-fertilisation of talent through the pooling of resources between departments and between organizations.
Performance monitoring, by designing dashboards to track performance, by ensuring the regularity and quality of data entry and by conducting satisfaction surveys with stakeholders.
Continuous improvement, by leading quality circles, conducting methodological and technological reviews, and testing various system developments in restricted operational areas or in digital test environments, true copies of the real environment (cf. the digital twin concept).

Conclusion: Forging Ahead with Clarity and Purpose

The digital transformation journey of an organization is complex and multifaceted. While technology, especially AI, plays a critical role, the true essence lies in the vision, understanding, and leadership of its managers. Drawing parallels from our previous article, the convergence of AI and management methodologies creates a holistic framework for organizations. As algorithms support, guide, and optimize, it’s the human intuition, expertise, and leadership that truly steer the organization towards a prosperous future.