Moving from Traditional to Digital Leadership

Adapting to the Cashless Movement

With the global movement towards cashless transactions, there is a need for banks to rethink their current approach. Banks may consider going beyond transaction-based bank branches towards higher value-added services. Examples include communal spaces such as restaurants to draw in customers, or catering to mass-market customers through familial activities. Such decisions will be guided by two main factors:

(a) The Local Demographic

The local demographic, the profile of new banking customers are becoming more digital-based. With customers becoming more accustomed to digital banking solutions, bank branches are becoming increasingly redundant in the face of digitalisation. Many banks are already reacting to this shift, with MUFG Union Bank closing all 22 US physical branches of its PurePoint Financial brand, while Capital One shuttered another 37 branches at the start of 2020.

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(b) The Economic & Digital Maturity

Digital Maturity is the measurement of the maturity of digital capacity in terms of the technology used and the comfort level of the users. Even if a company spends thousands of dollars on the latest technology, if employees are unable to use it- the company cannot be considered digitally mature. A company’s digital maturity will determine their ability to undergo digital transformation- the process of radically changing your workflows and operations with digital technologies.

Similarly, countries with digital maturity are likely to possess established economies with high branch productivity, bank penetration, and mature branch networks. They will look to cut down on such branches to reduce operating costs as customers go digital. Conversely, emerging regions will likely increase branches to meet the population banking potential and increase banking penetration in non-digitally savvy segments.

Ultimately, banks that prepare for both global trends and local market characteristics with a customer-centric approach will be the most successful in their branch transformation.

Leading the Next Generation

However, digitalisation is the transformation of business processes through digital solutions, which extends beyond banking, affecting every aspect of people’s life. Leadership within an organisation is no exception- Leaders have to adapt to changing economic and digital conditions themselves before guiding their team members through the transition as well.

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Traditional Leadership

The hallmark of traditional leadership is its directive or autocratic nature, designed to cater to a non-digital landscape. Here, the leader (at the ‘top’) delegates the responsibilities and holds the power to make decisions on behalf of their subordinates. A prime example will be the military, with higher ranking individuals holding the power to issue orders and command attention of their lower-ranking charges. Organisations with disempowering culture where only managers make decisions and staff merely follow typifies traditional leadership approach. Such leadership style also ‘sails the ship’ tightly, keeping the employees closely monitored.  It is not surprising to find such traditional leadership in some departments of an organisation if not the entire organisation, today.

Digital Leadership

With digitalisation developing into a global phenomena that transcends geographical boundaries in the past decade, more is expected of leaders to empower their people in terms of decision making and working from home among other things, which means having to trust their people will do their utmost even when not being physically supervised. Often, digitalisation gets misunderstood and confused with digitisation, which only involves the conversion of information from analogue to digital, that only forms a subset of digitalisation. Here are some examples to help distinguish the two terms:

Today, digitalisation has only been amplified by the onset of the COVID-19 pandemic, with workplace arrangements becoming increasingly flexible. Moving forward, a rising number of leading companies, like Amazon and Microsoft, have already begun steps to adopt flexible work arrangements post-pandemic. This marks a shift from remote work towards a blended model with some workers working from home, while others remain in-office.

In light of the burgeoning role that digitalisation holds in business proceedings, it is imperative for leaders to adapt themselves, before being able to effectively guide their subordinates through digitalisation. After all, leaders are responsible for modelling the way, which necessitates embracing digitalisation as a core value.

So where do we start? Let’s take a look the following six strategies to living a core value, based on James Kouzes and Barry Posner’s The Leadership Challenge.

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1. Calendar
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This digitalisation process requires consistent effort from each and every member, which necessitates long-term commitment, which is best created through scheduling relevant meetings and activities for the whole team to live out espoused values.

This ensures that everyone on the team will be on the same page, while establishing their commitment towards incorporating digital tools in business processes. Furthermore, team members will be able to hold each other accountable, it will go beyond needing the enforcement of the leader.

2. Critical Incident

Next, discussions surrounding potential inhibitors and their corresponding counter-actions should be undertaken. Implementing pre-emptive measures will help make the team immovable, better prepared for the inevitable struggles that crop up in the digitalisation process.

For instance, potential technological difficulties such as unstable internet access can be amended beforehand, preventing it from impairing the implementation of digital tools.

3. Stories

Get all team members, including yourself, to share their success stories along their digitalisation journey. By highlighting these small wins from the members, it celebrates and appreciates their efforts towards the digitalisation process.

4. Language

This process requires consistent effort that needs to remain at the forefront of the team’s focus. By continually discussing topics such as recent developments in digital tools and other topics related to digitalisation, the team will be more engaged with the process.

5. Reward

As with most long-term processes, motivation wanes with time. Leaders have to be wary of periods of low motivation, as team members might begin to lose focus and determination to continue with the process. At this juncture, the leader needs to step in with either extrinsic or intrinsic means of reward, to incentivise their commitment towards the process.

6. Measurements

To ensure that there is adequate progress taken by the team, leaders should utilise the SMART goal-setting framework as mentioned in Professor Robert S. Rubin (Saint Louis University)’s article for The Society for Industrial and Organisational Psychology.

These six strategies will provide a holistic basis for you to kickstart your transition to digitalise your processes within the organisation. Now, take some time to reflect- how has your organisation manoeuvred the transition into a digitalised world?

To find out more about how to transit to digital leadership, contact us at connect@pace-od.com or visit our website.