The Role of Leadership in a Digitalized World

The studies that adopt a micro-perspective to the topic of leadership and digital technology can be classified in three different categories, depending on whether they focus on: (1) The increased complexity of C-level roles; (2) The skills e-leaders need; and (3) The practices for leading virtual teams effectively.

The Evolution of C-Level Roles

The huge impact that digitalization has had in the competitive business environment, transforming markets, players, distribution channels, and relationships with customers, has made it necessary for organizations to adopt a high-level strategic view on digital transformation. New responsibilities on the selection of digital technologies that will drive an organization's ability to remain competitive in a highly digitized world, are given mainly to its CEO. CEOs in the Digital Age assume the additional role of digital change agents and digital enablers, implying that they should recognize the opportunities offered by new technologies, and also push for their implementation. As suggested by Avolio, e-leaders have a fundamental role in appropriating the right technology that is suitable to their organizations' needs, but also in transmitting a positive attitude to employees about their adopting of new technology. CEOs are required to instill a digital culture into the top management team, involving it in actively sustaining a digital change inside the organization. For this matter, a greater interaction is needed between the CEO and the Chief Information Officer (CIO), who will increasingly become a key player in the digital strategy definition and implementation, rather than staying confined to an "IT-is-a-mess-now-fix-it" flavor of a role. Bekkhus and Hallikainen acknowledge an increased ambidexterity in the role of CIOs and develop a toolbox related to their role as gatekeepers and contributors. In order to reach their goals successfully, CIOs need to have a clear picture of both the characteristics of the digital strategy and the organizational needs it is supposed to satisfy. They should also carefully evaluate the readiness of the organization in every step of the changing process in order to adopt the proper pace. To avoid IT project failures, CEOs need to facilitate the recognition of the CIO's role, as well as promote collaboration between the CIO and other top managers.

As described before, digital technologies are not only used to support internal processes, but are also a way to build relationships with different actors in the external environment. Social media platforms in particular, are de facto powerful tools that C-level executives use to build communications channels with their followers. In a study analyzing the rhetoric of CEOs in social media, Grafström and Falkman suggest that CEOs' willingness and ability to construct a continuative dialogue through digital channels is a powerful way not only to manage organizational crisis but also to sustain the reputation and the image of the organization, positioning the brand and communicating the organizational values. Thus, as Tsai and Men unveil, by properly using social media, CEOs, as organizational leaders and spokespersons, can build trust, satisfaction and advocacy among their followers. According to the authors, digital technologies, and social media in particular, support CEOs in becoming "Chief Engagement Officers [who develop] meaningful interpersonal interactions and relationships with today's media savvy public". Even if CEOs have always been considered the personification of the organization, the rising need for transparency and authenticity has led CEOs to embrace the task of visible, approachable and social leaders who actively contribute to the engagement of followers and customers.

In sum, C-level managers are faced with higher complexity of roles, related not only to new responsibilities in the digital strategy development, but also in the engagement of stakeholders across the organization's boundaries.

Leaders' Skills in the Digital Era

Defining what skills characterize leaders in the digital era has become a matter of interest in the literature. Studies analyze what are the relevant skills e-leaders should display in order to be effective. In line with the debate on universal and contingency theories, scholars ask to what extent the skills leaders need in order to lead e-businesses differ from the ones needed in traditional organizations. Most studies are based on expert surveys that engage with digital experts, managers, CEOs and Managing Directors of e-businesses. A few studies also integrate expert surveys with interviews to IT specialists and C-level managers.

Scholars agree that the introduction of digital tools affects the design of work, and, particularly, how people work together. For example, digitalization opens up new possibilities such as virtual teams and smart working, introduces new communication tools, increases speed and information access, influences power structures, and increases efficiency and standardization. In order to steer organizations and help them reap the benefits from such digital transformations, leaders may need to develop a variety of different skills. We present below the main skills leaders need in the digital transformation era that have been highlighted in the literature.

Communicating through digital media

Global connectivity and fast exchange of information have created a much more competitive and turbulent environment for e-businesses, which must deal with rapid and discontinuous changes in demand, competition and technology. Scholars agree that the need for speed, flexibility, and easier access to information has facilitated the adoption of flatter and more decentralized organizational structures. In the digital context, knowledge and information become more visible and easier to share, allowing followers to gain more autonomy and to make their voices heard at all levels of the organization. As information becomes more distributed within the organization, power tends to be decentralized. Digital transformation allows real-time involvement of followers in many decision processes, increasing their participation. Therefore, leaders are expected to adopt a more inclusive style of leading, asking for and taking into account followers' ideas into everyday decision making, using a two-way communication and interaction. Scholars maintain that followers' higher autonomy and participation can lead to a higher sense of responsibility for the work they are accountable for. This in turn should reduce the need for control-seeking behaviors previously exerted by leaders.

At the same time, inspiring and motivating employees have become pivotal skills for leaders to master, and seem to be required to an even greater extent in order to encourage the continuous involvement and active participation of followers. Indeed, the same digital tools that provide autonomy to followers, may also drive them toward greater isolation. According to Van Wart and Roman, some of the most common problems generated by the digitalization of organizations are worker alienation, weak social bonding, and poor accountability. It is therefore extremely important that leaders support and help followers in dealing with the challenges of greater autonomy and increased job demands, by adopting coaching behaviors that promote their development, provide resources, and assist them in handling tasks.

Similarly, the ability to create a positive organizational environment that fosters a strong sense of collaboration and unity among employees has become vital for leaders to have. Yet, e-leaders' reliance on traditional social skills, such as the abilities of active listening and understanding others' emotions and points of view, may not be enough to warrant success in creating such environments. Rather, they need to integrate these social skills with the ability to master a variety of virtual communication methods. According to Carte, "while leadership in the more traditional face-to-face context may emerge using a variety of mechanisms, in the virtual context it likely relies largely on the communication effectiveness of the leader".

Roman labels this skill as e-communication, and defines it as "the ability to communicate via ICTs in a manner that is clear and organized, avoids errors and miscommunication, and is not excessive or detrimental to performance". The leader needs to set the appropriate tone for the communication, while organizing it and providing clear messages. Moreover, the leader needs to master different communication tools, as their communication effectiveness depends largely on the ability to choose the right communication tool. Roman provides a set of major selection criteria, which includes richness of the tool, synchronicity, speed of feedback, ease of understanding by non-experts, and reprocessing capability (ability to use the communication artifact multiple times in different venues). This ability allows to adapt the communication to the receiver preferences (as it would otherwise happen in a face-to-face interaction), so as to provide a variety of cues that enhance social bonding, convey the right message to the target audience, and better manage urgency and complexity.

High speed decision making

One way in which the introduction of technology has changed organizational life has been the greater need for speed. Scholars agree that e-business leaders are forced to make decisions more rapidly. This seems to suggest that decisiveness, and problem-solving abilities keep being extremely relevant for e-leaders, and may become even more prominent in the future. According to Lynn Pulley and Sessa, never-ending urgency can create situations in which leaders need to make decisions without having all of the information or without having time to think and analyze the problem properly, which may lead to falling back onto habitual responses, instead of creating novel and innovative ideas. To help navigate such situations, leaders need to be able to tolerate ambiguity, while being creative at the same time. If it is true that the digital world forces leaders to examine problems and provide innovative answers at a faster pace, the use of information technology also allows them to make more informed decisions. Information systems can provide enormous amounts of real-time data. For this reason, the ability to process high volumes of fast-paced incoming and outgoing data (e.g., Big data), in order to analyze it, prioritize and make sense of the relevant information for decision-making, has become and will be even more relevant in the future. Recent research points out that leaders will increasingly need to collaborate with IT managers, providing directions for data analysis and offering meaningful interpretations of results.

Managing disruptive change

The fast-paced technological evolution places high demands on organizations' ability to deal with continuously changing conditions and players. Lynn Pulley and Sessa highlight the constant need for organizations to adapt, foresee opportunities, and sometimes improvise, in order to maintain their competitiveness in the market. Under increasing pressure to innovate, leaders need to undertake an active role in identifying the need for change, as well as handling, and initiating change within their teams and organizations. Horner-Long and Schoenberg findings confirm that e-leaders tend to show more entrepreneurial and risk-taking characteristics than leaders in traditional contexts. However, continuous change should not disrupt the focus and mission of the organization. While promoting a flexible and innovative attitude in the organization, the leader needs to clarify a common direction. Lynn Pulley and Sessa identify the ability to inspire and share a common vision about the future of the organization as one of the challenges of e-leaders, who are frequently confronted with the need for change. While acknowledging the importance of this skill, Horner-Long and Schoenberg did not find it to characterize e-leaders any more than traditional leaders.

Managing connectivity

Scholars maintain that e-leaders also need to foster their networking abilities. Beyond the need to explore and create networks to lobby for resources and stakeholder support, developing social interactions seems to play a key role in favoring innovation. As innovation becomes a top priority, leaders need to understand how to take advantage of networking opportunities. The hyper-connected environment, in which leaders operate, especially with the ubiquitous use of social media and other digital platforms, provides new networking opportunities due both to an easier access to larger groups of individuals, and the possibility to establish connections through more immediate communication. New technologies and especially the advent of social networks might have reinforced the perception that being persistently part of the network is compulsory. As reported in Horner-Long and Schoenberg "in the new economy some leaders do nothing but network - there is no commercial need. It is simply networking for networking's sake". Although it is a general requirement to be able to create and maintain social relationships with various stakeholders, effective leaders differ specifically in the ability to recognize those relationships that lead to tangible benefits.

The renaissance of technical skills

Lastly, scholars underscore the increased value of technical competencies. This represents a shift from the latest paradigm established over the past four decades, whereby leadership primarily requires emotional and social intelligence competencies that enable the leader to understand, motivate and manage his team effectively. Notwithstanding, leaders also need to understand and manage the use of various technologies. Indeed, IT knowledge and skills have become high on demand requirements to operate in a digitalized environment. Furthermore, the mastery of current technologies must be balanced with the ability to stay current on the newest technological developments. This emphasizes the need to adopt a life-long learning approach to developing one's digital skills.

Developing leadership skills in the digital era

To lead in the era of digital transformation requires individuals to be both people-oriented and technically minded. These two skills often characterize very different profiles of people that, yet, need to come together in order to implement an effective digital transformation in their organization. The case study presented by Coutu, highlights the need to establish a profitable exchange relationship between leaders of people-oriented (e.g., sales), and IT functions, in order to create a cross-functional and cross-skill contamination. Systematic knowledge dissemination from the individual to the group is highlighted as the most effective way to spread knowledge and expertise across the organization. Coutu addresses how this cross-skill contamination can be performed, by means of implementing reverse-mentoring programs. Nonetheless, the author uncovers the problem of potential generational conflicts, whereby newer generations, who tend to be more knowledgeable and skilled in digital technologies, may gain informational power over others, generating concern and skepticism in older, change averse, individuals.

Studying modern military operational environments, Boe and Torgersen highlight the need to lead under volatile, uncertain and complex situations, characteristics they find similarly describe the context of modern e-businesses. According to the authors, leadership training needs to combine both technology and change, creating simulations of scenarios in which ambiguous information and improvisation create complex and uncertain conditions.

One way in which exposure to technology and simulations can be combined is through training in virtual spaces. In large community games, leaders may have to recruit, motivate, reward, and retain talented team members. They have to make quick decisions that may affect their outcomes in the long-run, for which they need to analyze the environment in order to build and keep their competitive advantage. Lu adopt experiential learning theory to explain e-leadership skills development, referring to activities in which learning is performed in a virtual context. Their study attempts to empirically examine the transferability of virtual experiences into in-role job situations. Results show partial association between virtual games behaviors and hierarchical position of the participants, however, conclusions concerning the transferability of certain skills or experiences gained in virtual games may be highly affected by reverse causality. Ducheneaut and Moore, conduct a virtual ethnography to show that people participating in multiplayer role-playing games train behaviors related to networking, management and coordination in small groups. However, in a recent review on the use of games, based on digital tools or virtual realities, for training leadership skills, Lopes highlights a general lack of theoretical grounding in the development and analysis of virtual games. Moreover, they find extant studies rarely show these games affect leadership skill outcomes. Robin finds that while simulations facilitate learning, they do not seem to lead to better results than traditional methods. The authors suggest simulations' main advantage lies in the possibility to enable learning in situations where it would otherwise be difficult or impossible. They thus propose the use of a combination of traditional and technology-based training to achieve the most effective learning outcomes.

Leading Virtual Teams

The introduction of digital tools has enabled the organizational structure to become not only flatter and decentralized, but also dispersed. One way in which digital technology has shaped organizational life and people management has been by enabling the potential use of virtual teams. Virtual teams are defined as "interdependent groups of individuals that work across time, space, and organizational boundaries with communication links that are heavily dependent upon advanced information technologies". They have become increasingly pervasive in the last few years, especially in multinational organizations.

Indeed, several benefits of virtual teams have been acknowledged in the literature. First, the use of virtual teams has allowed for a dramatic reduction of travel times and costs. Second, it has enabled teams to draw upon a varied array of expertise, regardless of location, making it easier to access and recruit talent across the globe. Third, by facilitating the heterogeneity of team members, it has fostered creativity and innovation, due to the possibility of combining different perspectives.

Despite its advantages, certain specificities of virtual teams' challenge the traditional way in which teams are managed and led. For instance, virtual teams are characterized by geographical and/or organizational distance. This implies that leaders cannot physically observe team members' behavior nor rely on verbal cues, facial expressions, and other non-verbal communication in order to understand the team's thoughts, feelings, moods and actions. This is considered one of the biggest barriers to developing and managing interpersonal relationships. The heavy dependence on ICT may lead to communication problems, such as failing to distribute information to all team members, understand or convey the level of urgency or importance of the information, and interpret silence. Geographical dispersion often implies cultural diversity between team members, which may affect leaders' ability to build and maintain team spirit and trust. According to Sullivan, space may suppress leadership capacity, even in situations of shared leadership. Moreover, virtual teams are subject to time differences.

In order to overcome these challenges, virtual team leaders need to adopt specific behaviors and practices. One of the most important practices highlighted in the literature involves the setting and periodical revision of communication norms within the team. Instead of focusing on behavioral norms, as in traditional teams, virtual teams require a clear definition of the norms pertaining to their use of communication tools, through which information flows and activities are performed. Clear communication norms entail a number of advantages for virtual teams, such as: correct exchange of information, regular interaction and feedback, less ambiguity about teamwork processes, better monitoring of each member's contributions, faster detection of problems and mistakes. Moreover, because leaders play a fundamental role in enabling and mediating the communication between team members, they are able to lead them in the construction of a common language. This involves gaining a deep understanding of the underlying meaning of words and expressions used in the team. The mutual understanding of the organizational and social context in which each team member is embedded facilitates this process.

As mentioned in the previous section, virtual team leaders also need to be able to choose the right communication tools and navigate well through their functionalities and the interactivity across various tools, if they are to avoid disruptions in communication and achieve a more vivid and open communication that favors positive team member relationships. While synchronous communication is considered more appropriate to manage complex, interdependent tasks, asynchronous instruments may allow for team members with different backgrounds to adopt their own pace in processing others' ideas or generating new ones. Moreover, asynchronous communication facilitates a continuous flow of information and the ability to work for a greater number of hours. Furthermore, leaders need to use multiple channels with different levels of richness. According to Hambley, "a rich medium allows for transmitting multiple verbal and nonverbal clues, using natural language, providing immediate feedback, and conveying personal feelings and emotions". A richer tool is supposed to lead to better team cohesion. Yet, the authors found mixed results in terms of the association between constructive interaction and task performance.

Virtual teams often group together individuals from different educational, functional, geographical and cultural backgrounds. On one hand, such heterogeneity should promote innovative solutions, but on the other hand, it may also undermine collaboration. A virtual team leader thus needs to have good cross-cultural skills, to identify different cultures' characteristics and understand similarities and differences across cultures. Especially at the early stages of a virtual team's lifecycle, the leader needs to assure that the diversity of team members is understood, appreciated, and leveraged. As virtual teams do not usually have the chance to enjoy in-person informal activities typically used to share personal characteristics and abilities and foster team building, the leader needs to share and manage personal information virtually and ensure the team has a clear understanding of each team member's expertise and skills. Once the diversification of skills is acknowledged, virtual teams can also benefit from a clear distribution of roles and tasks. Especially if virtual teams adopt asynchronous communication tools, tasks and schedules need to be clearly defined to avoid delays due to task misallocation or overlapping.

According to Malhotra, virtual teams may also engage in practices aimed at digitally monitoring the team activity, relying on remote monitoring of virtual communication and participation, as well as document posting. However, Jawadi notices how monitoring and controlling mechanisms may be negatively perceived by team members. Indeed, their findings show that behaviors directed at monitoring and coordinating team interactions are not associated with higher leader-member relationship quality. According to Carte, high performing virtual teams are characterized by monitoring behaviors, but only when these are shared between members. Although traditional performance appraisal and monitoring mechanisms are being replaced by alternative systems that rely on real-time digital feedback, the key features that characterize effective face-to-face feedback have been kept.

Perhaps the best measure of impact of the pervasive adoption of virtual teams in organizations has been the extensive accumulation of literature focused on studying the phenomenon, alongside its antecedents, challenges and outcomes. As our study reveals, scholars have identified a number of best practices, whereby virtual team leaders become the key players in charge of resolving the challenges posed by physical and organizational distance.

However, especially when considering virtual teams, there has been a shift in the literature to steer away from traditional notions of leadership as being assigned to one individual, toward focusing on new conceptualizations of shared and distributed leadership. Virtual teams, which are often cross-functional, are indeed characterized by a relative absence of formal hierarchical authority. In the same way that the need for speed in responding to accelerated environmental change and higher connectivity led to the development of virtual teams, that same need may be driving the flattening of hierarchical structures toward more evenly distributed, shared and empowered leadership among virtual team members. As such, virtual teams are often left alone to shape and define their own leadership style, which may encourage all team members to perceive themselves as leaders and drive the collective development of leadership skills. In these so-called self-managing work teams (SMWTs;), decisions and leadership responsibilities are equitably allocated among team members, who are also engaged in supporting and accompanying each other in the accomplishment of their tasks. The concept of shared leadership does not necessarily imply the rejection of a "formal" leader, but introduces the idea that any team member may be a leader, and as such, is expected to assess the team in its context and assert what is best for the team: whether to volunteer himself as team leader or empower any fellow team member(s) to serve the team as leader(s). This process leads to the creation of a shared understanding of both the leadership responsibilities and the power dynamics within the team.