The new Associate Dean of the Executive MBA at Esade, Xavier Ferràs, analyzes the skills needed by the executives who are to lead the digital transformation
Digitalization has sparked a radical transformation in the way we generate knowledge, especially in the business arena. These sweeping changes have arrived in the form of disruptive technologies such as artificial intelligence, 3D printing and synthetic biology. Technologies which were not necessarily expected or demanded by the market, but which, once here, can revolutionize the playing field and generate new business opportunities for those who are able to seize them.
In an article published in the Harvard Deusto Business Review, the new Associate Dean of the Executive MBA at Esade, Xavier Ferràs, explores the implications of digitalization for management, and identifies the characteristics leaders and executives must have, if they are to successfully navigate this tidal wave of change.
The challenges of the technological revolution must be resolved from a profoundly humanistic perspective
As he explains, real change does not consist in digitalizing what already existed, but “in diving deep into these technologies in order to comprehend their transformational potential.” Rather than simply digital transformation, the terms digital “awareness raising” and “co-evolution” are better suited to the dynamism and the creative potential that go hand in hand with technological evolution.
In the new era, Ferràs insists that technological competencies, which used to be secondary, are now essential. However, as necessary as they are, they are not enough in themselves. “Paradoxically, in the new technological revolution, the questions, ethical dilemmas and unexpected situations that arise must be resolved from a profoundly humanistic perspective,” Ferràs declares.
Thus, the Esade professor proposes four categories of competencies to be developed by the new manager in the digital era. On the one hand, computational and digital competencies. On the other hand, social and humanistic competencies.
According to Ferràs, computational competencies are related with elaborating abstract concepts of a logical and mathematical nature, understanding causal relationships between variables, developing and refuting theories based on empirical evidence, and establishing logical problem solving routes. Three in particular stand out:
The solution of complex problems
This refers to understanding multivariable problems, with interrelated variables, and the capacity to establish coherent and viable mechanisms for solving them.
The use of scientific method
In this respect, on a methodological level, a business plan should not be very different from a doctoral thesis. “Both procedures seek the confirmation or the rigorous refutation of a working hypothesis based on evidence,” Ferràs explains. “If the scientist explores the frontiers of science, the manager must explore the frontiers of the market.”
The systemic view
Or, in other words, seeing the whole picture: understanding how the sum of the parts of a system functions, and not focusing solely on how each of the parts functions.
It is through these competencies that digital technologies can be applied to the solution of practical problems. They require a knowledge and understanding of the technologies and of how they can be implemented in real-life situations to generate value. These competencies include:
This consists in the ability to design specific sequential mechanisms in order to solve problems (what we know as algorithms or programs). Thus, they are oriented towards a particular function and they can be written in a digital code for subsequent transfer to an information system that will run them in practice.
This is about understanding the value of data as a unit of information and knowing how to design mechanisms to extract and process data. As artificial intelligence becomes more popular, designing a data strategy that feeds machine learning systems will be key. What data should we use to train the algorithm? How frequently should we offer it data? And what quality will this data have? In the view of Ferràs, the answers to these questions will provide "a genuine means of differentiation for companies.”
It goes without saying that the new manager must be familiar with, understand and monitor new technologies and their dynamics. Ferràs argues that “technology strategy (control over how a technology emerges, grows, is tested, is absorbed and becomes a basis for business opportunities) must be incorporated into the body of knowledge that is key to every organization.”
Social competencies have been important throughout the history of management and their importance will continue. Therefore, we must ensure that they are not eclipsed by the digital transformation, and the manager must be mindful of the most relevant social competencies:
This is the ability to manage not only one's own emotions, but also the emotions of others, in social environments. The mastery of this competency will continue to be important for leaders of organizations.
Ferràs describes this as “the capacity to transmit ideas, concepts and proposals with rigor and conviction, attracting the attention of interlocutors and maximizing the information that they genuinely absorb.”
This is the capacity to manage in multicultural environments, where a wide range of behaviors and beliefs interact; these guide people's actions and therefore they need to be understood. Specific stand-out skills here are “global vision, understanding the world as a whole, and linguistic competence in other languages.”
This is the capacity to initiate new projects. At the same time, it includes a whole series of skills related with resilience, adaptability and personal initiative. In the view of Ferràs, “an entrepreneur, inside or outside a company, is someone who perceives change as an opportunity and is capable of giving it value through the development of new projects.”
Finally, although these in fact are the most important, there are humanistic competencies. “These represent the fundamental bases for comprehension of: the phenomena that are generated at the heart of human thought; human intervention in relation to the world and society; human nature itself; ethics associated with human nature; and the mechanisms that regulate these phenomena,” the Esade professor explains. Four humanistic competencies are highlighted:
Management based on values
Prediction mechanisms may well improve together with the new digital technologies, but the world continues to show that markets remain subject to unexpected events. “For this reason, not only is it necessary to have powerful digital analytical systems, but also solid codes of values that provide strong support for critical decision-making,” Ferràs observes. Concepts such as “courtesy, courage, sincerity, honor, modesty, respect and dignity” are beyond the understanding of machines and will give managers a true sense of direction when unexpected events strike.
“Content has an expiry date, while capacities endure. Especially in technological disciplines," Ferràs declares. While scientific knowledge constantly expands, learning becomes a key competency, which must be applied on a permanent basis. It is not sufficient to learn once. You have to “learn to learn, learn to innovate, learn to take entrepreneurial initiatives, learn to investigate, and also learn to forget (knowledge, business models, experiences, obsolete good practices).”
Creativity and strategy
Creativity tends to be repressed by organizational culture, despite the fact that its strategic value is increasing. “If a strategy is to be successful, it must contemplate a differential value proposition. And to be differential, the proposition must contain elements of exclusivity and creativity,” Ferràs explains. Hence, there is a clear connection between strategic thinking and creative thinking, so it is a good idea to train creativity by means of the specific methodologies that exist for this purpose.
Philosophy and critical thinking
“At a time when technification is very much to the fore, it is also necessary to relativize and to engage in abstraction, in order to gain a better understanding of the world and its phenomena,” Ferràs notes. In the new digital era, managers have to master the logical-mathematical reasoning with which problems can be solved, but they must also ask themselves about the substance of this reasoning and consider why it opens the door to solving specific problems. Furthermore, they must be capable of “constantly questioning the world around them, developing a critical spirit and ideas of their own,” especially when certain trends become established in a manner that appears to be unquestionable.
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