Does Your Leadership Style Work in the Digital Age?

Advancement in digital technologies has disrupted everything — including leadership styles, according to Knowledge@Wharton.

“So what is a leader to do given this new digitally enabled and hyper-connected environment? Employees and freelancers (such as Apple’s developer community) want ownership, impact and recognition, rather than to follow instruction. Customers want to participate in the marketing and development process (witness how consumer/business relationships have grown on social media and the rise of crowdsourcing businesses like Victors and Spoils), rather than be told what they want and why. Leaders are finding that open and agile organizations are able to respond faster and more effectively to these developments than organizations where all insight and direction comes from the top. In short, the autocratic Commander, whether brilliant or misguided, just won’t cut it anymore. Leaders need a broader range of style options to match the broader range of assets companies are creating today.”

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“In our business model research, based on financial data from the S&P 500 companies, we found that Network Orchestrators — companies that invest in intangible assets, like relationships with customers and suppliers (Facebook, LinkedIn, Airbnb, TripAdvisor) have the highest Multipliers (price to revenue ratios) at an average of 8x (more details here). These value premiums result from rapid growth and low scaling cost, as noted by Jeremy Rifkin in The Zero Marginal Cost Society. Further, we identified that the different leadership styles complement some business models and detract from others because each business model leverages different types of assets, which perform best under different leadership styles.”