Digital Competencies of Excecutives

Digital Immigrant  

With the rapid development of technology and the high volatility of the market, all predictions regarding the future are rather ambiguous. Increasing competition, high demand for constant transformation and new IT solutions are putting pressure on companies to react quickly and act proactively. This should start with changing the mindset of the leadership team and strengthening their digital capabilities, as digital transformation should not only be the task of the IT department in the company, but also a matter for the top leadership. Thus, it should belong on the agenda of the management.  

Today, the new role of managers is not only to constantly develop strategies and support employees in the domain of digital transformation, but also to act as influencers and companions. Managers who wish to lead or inspire employees must ensure that they themselves have mastered certain vital digital skills. 

In practice, however, the reality is often quite different. Despite having the rudimentary knowledge, many managers are overwhelmed with the implementation. According to the results gathered from several surveys, many corporate executives lack important digital and business decision-making skills. In addition, they either have little or nothing to do with digitization processes. According to further statistics, the vast majority of managers and executives in Germany are between 51 and 60 years old. They belong to the baby boomer generation and are collectively referred to as "digital immigrants." It is therefore a particular challenge for them to transform themselves quickly and to align themselves with the continuous process of rapid change.  

Lifelong learning

"The culture of crisis is a culture of learning" and enhancing digital learning for leaders with the ultimate goal of eliminating the problem as quickly as possible. The term "lifelong learning" has been around since 1993 and describes continuous, voluntary and motivated learning. In 2021, the federal government launched an investment program called "Digital Now" to support digital transformation programs in companies with two main grants. One is called "Investments in Employee Skills," which is designed to help companies train employees to use digital technologies. According to the BMI statement of November 2022, the German government will continue to invest around EUR 1.6 billion in the digital sector in 2023. It is assumed that learning to improve digital knowledge for executives will not only have practical purposes, but will also provide a strong impetus in many respects.

Chief Digital Officer

In addition to actively recruiting employees with high digital competence and digital experience, companies should also appoint a Chief Digital Officer (CDO) alongside the Chief Executive Officer (CEO). The main task of the CDO is to plan and execute the digitalization of the company. This encompasses of the CDO introducing interesting digital topics into the company, communicating the company's goals, and ensuring broad support for his or her plan at an early stage. In the current context, this is probably a sensible strategy for companies to adapt to the development of technology. Since the CDO is also part of the top management, he or she is often involved in the relevant strategic decisions and hence play a key role in driving digital transformation across the organization. There is an opportunity for executives to address digital issues slowly but surely and more realistically. At the same time, there is no need to worry that individual digital thinking will impact the overall strategy. As a result, employees gain more confidence in their managers and their digital transformation strategies. Their motivation to work and overall efficiency is also higher as a result of being accompanied by fully qualified managers.

According to Bitkom statistics from January 2022 across 602 companies with over 20 employees, 64% of the companies that participated in the survey currently do not have a CDO employed in their company. In contrast, only 20% of companies already had a CDO in their company and only 14% planned to fill this position. 

External IT Service Provider

The user companies examined consequently rely very heavily on collaboration with consulting and IT service providers.  

As an external partner to companies, the IT service provider offers a wide range of services in the area of digital transformation with a professional team and always captures the latest trends in digitization. In addition, they work simultaneously with many customers on diverse projects and therefore bring knowledge, innovation and experience.  

Unlike the company's internal employees, the consultants focus entirely on analyzing the company's situation and needs in specific projects and expanding its digital orientation in this area.  

Last but not least, the experts act completely independently from the company, without being influenced by internal elements. Our main goal is to complete the project as successfully as possible within the set deadline. This neutrality ensures that our customers' digital strategy can be developed in a targeted manner.