Introduction
The global environment has experienced a dramatic shift toward the digital age. This has enabled organizations to put emphasis on digital transformation to keep pace with the changes that are taking place. Even though digital change can be daunting, effective leadership practices implemented at organizations can significantly enhance the productivity of workers productivity, and the attitude can generally determine the efficacy of such leadership that the management and leaders of businesses show. Thus, the correct attitude toward a digital business environment is indicative of effective leadership, which is illustrated in the traits, values, behaviors, skills, habits, and motives that leaders exhibit. This thesis will focus on leadership in the digital business environment, with the vital issue of concern entailing the leadership attributes and qualities used to compete in such an environment.
The research aims to answer the following question: “What are the new leadership attitudes necessary for organizations to compete within the digital business environment?” The question’s relevance is linked to the fact that the modern business sphere is highly digitalized, and technological changes call for the rapid transformation of organizations according to the shifts in external environments. Because the issue of organizational leadership has been widely explored by researchers, the vast extent of literature can offer abundant background information on the issue while also allowing for the formulation of research questions. It is essential to understand how digitalizing companies’ managers can adjust their leadership attitudes and competencies to meet the demands of not only changing climates but also the needs of employees whose productivity is imperative for good performance and profitability.
The particular areas of interest include organizations working in the sphere of Information Technologies. Organizations operating in these industries are expected to be highly agile and respond to emergent technological trends. The leaders of such companies do not necessarily solve technological challenges or directly affect profitability. Instead, they use modern approaches to leadership to facilitate the continuous interactions between organizational processes, strategy, structure, and culture, which are essential to discover and systematize for future use. After digging deeper into the leaders in the IT industry, the search revealed that the study would focus on the leadership at IBM, Netflix, and SpaceX and Tesla and their respective leaders, Arvind Krishna, Reed Hastings, and Elon Musk.
IBM has been among the leaders in advancing Artificial Intelligence-driven technologies for enterprises and was the first to propel the development of machine learning systems. For years, the organization has struggled with bureaucratic processes, calling for a change in leadership. Arvind Krishna has been seen as a much-needed leadership change to transform the culture and bring IBM to new highs of performance. SpaceX is not only an aerospace manufacturer but also a communications corporation, while Tesla is an automotive producer and also a clean energy company, and both of them rely significantly on the digital business environment. As the leader of both companies, Elon Musk presents an interesting case study into leadership and the approaches that he applies to two organizations. Finally, under the leadership of Reed Hastings, Netflix has become the leading provider of streaming services. The approach that Hastings has taken presents a unique case study for exploration.
Methods
To answer the research question “What are the new leadership attitudes necessary for organizations to compete within the digital business environment?” the literature review as a research methodology was carried out. The method was chosen for its potential to be useful when evaluating evidence pertaining to the recent leadership approaches that CEOs of large digital organizations use to compete in their respective industries (Snyder, 2014). Therefore, considering the fact that the issue to be explored is narrow, the method of literature review allows studying a certain group of evidence to point to the stage of knowledge on the topic. Moreover, using the technique can create further agendas for research that may use a mixed-methods approach.
In this particular study, an integrative approach toward literature reviews was taken. It is a form of research that reviews, critiques, and synthesizes relevant literature on the topic of a new leadership approach in an integrated way (Torraco, 2005). Thus, it becomes possible to generate new frameworks and perspectives illuminating the ways in which modern digital leaders implement to make their organizations highly competitive in their respective industries. After formulating a research question, it was necessary to identify the sources for the review and methods of search. The topic of exploration entails using the latest information on how modern digital leaders act in the context of the upcoming industry challenges, how they manage change, and what values and culture they encourage among their subordinates. Using purposive (convenience) sampling, it was found that the three most unique and relevant leadership approaches to be explored belong to the CEO of Tesla and SpaceX, Elon Musk, the CEO of Netflix, Reed Hastings, and the newly-appointed CEO of IBM, Arvind Krishna. Besides drawing information from case studies in journals, and interviews from online and printed publications, the literature review also included information from videos, Twitter posts, and other sources that provide relevant and up-to-date information. Therefore, it was imperative to prioritize sources published in 2016 and later to ensure that the literature review includes relevant developments, new topics, and trends, as well as timely comments that leaders provide on their social media or in interviews.
Divided into three stages, the analysis included an independent exploration of the leadership approaches of Elon Musk, Arvind Krishna, and Reed Hastings. The purpose of the exploration entailed highlighting the distinct features and trends in the different styles exhibited by the CEOs and expanding on the evidence showing how they implement those features. Highlighting the specific directions and approaches to leadership is also instrumental for systematizing the evidence in the discussion section and later visualizing them with the help of an info-graph that summarizes the key takeaways from the study.
Theory
Elon Musk: CEO of Tesla and SpaceX
Tesla is known globally as the leader in the sphere of automotive innovation, managing to accomplish a lot in a short timeframe, and Elon Musk’s approach to leadership is key to understanding the company’s success. General analyses have shown that Musk’s leadership has traits of all traditional approaches but servant leaders (Khan, 2021). Besides, a newer approach to leadership has been found in the form of entrepreneurial leadership, which is a business mindset focusing on and capturing the benefits of uncertainty (Subramaniam & Shankar, 2020). An entrepreneurial mindset is a growth-oriented perspective that enables a leader to promote creativity, flexibility, as well as continuous innovation.
Visionary Leader
Considered a visionary leader who is fine-tuned to the emerging needs of highly diverse technological environments, Musk greatly values information incoming from different sources and uses it to the advantage of his projects (Galek, 2018). This trait aligns with transformational characteristics illustrated in his tranquility and optimism, even in dire situations such as the possibility of his company’s Space X bankruptcy (BBC, 2018). For example, after a repeated failure of rocket launch back in 2008, Musk addressed his team, saying, “We are going to do this. It is going to be ok. Do not freak out” (Gromov, 2017, para. 35). To his team and observers, the confidence that Musk as a leader exhibited was “like magic. Everyone chilled out immediately and started to focus on what just happened and figuring out how to fix it” (Gromov, 2017, para. 36). Musk’s behavior in stressful situations indicates his acceptance of failure and the desire to overcome it through risk-taking and constant improvement, which are vital characteristics of the digital business environment.
Open to Failure
Being open to failure and accepting it when it happens is a unique leadership trait that Musk has consistently exhibited. According to him, taking risks for risks’ sake is not a good practice; however, “anything which is significantly innovative is going to come with a significant risk of failure. But you got to take big chances in order for the potential for big, positive outcome” (ISS National Lab, 2015). Such an approach to business and leadership allows Musk to create an open work environment in which his subordinates are not pressured to be perfect all the time.
In an environment that is innovation-focused, Musk as a leader, sees failures as opportunities for improvement. A great example of this is the shattering of supposedly bulletproof windows of a new Tesla Cybertruck during the vehicle’s presentation in front of a live audience. When Tesla chief designer Franz Von Holzhausen threw a heavy metal ball at the armored windows, the glass smashed during both attempts (Brownstein, 2019). Instead of being embarrassed or apologizing after the presentation, Musk tweeted, “Franz throws steel ball at Cybertruck window right before launch. Guess we have some improvements to make before production haha” (Musk [Tweet], 2019). For an entrepreneurial and transformational leader, setbacks are part of progress. The example of Elon Musk in this role shows that successful leaders can easily pick themselves up and return to work to understand how they can improve their businesses. Besides, Musk has demonstrated taking extreme care in the feelings of his workers by modeling confidence and self-irony to ensure that failure does not define him.
Concern for Others
Besides inspiring and encouraging his subordinates to do the best they can, an important leadership trait that Musk has exhibited is a significant concern for the health and well-being of his team. The leader is very adamant about prioritizing the safety of workers as well as their physical and mental health. For example, following the reports of high injury rates at one of the Tesla stations, Musk said, “it breaks my heart when someone is injured […] I’ve asked that every injury be reported directly to me, without exception […] I would like to meet with each injured individual so I can understand, from them, exactly what we need to do to make it better […] Then I will go down to the production line and perform the same tasks that they perform […] We lead from the front line, not from some safe and comfortable ivory tower” (Tesla Owners Online [Tweet], 2017). The statement is reflective of Musk’s concern for employees not only as a leader but also as a person who is willing to push himself and do better in the future.
Another example is Musk infamously sleeping on a factory floor at the Fremont, CA facility, always being available to workers when issues needed immediate resolving. In the spring and summer of 2018, Tesla was pushing limits to meet the production quota for Model 3 cars, which meant that staff was highly loaded with work. Musk made a statement to say that he was sleeping on the floor on purpose and not because he could not go to the hotel. It was because he wanted his circumstances to be worse than anyone else’s at the company. “Whatever pain they felt, I wanted mine to be worse. That’s why I did it. At it makes a huge difference to people” (as cited in Randall, 2018, para. 5). It is important to note that in cases of severe strain affecting the company or allegations of poor leadership, Musk has shown openness to criticism and admitted that he is not perfect. As a spokesperson for Tesla mentioned, it is nearly impossible not to have any issues at a company employing 40,000 people (Clifford, 2018). However, it is a positive approach toward problem resolution that sets the leader of Tesla apart.
Intention for Socialization
The final crucial trait in an innovative approach of Elon Musk toward leadership entails the open intention for socialization; however, it is always selective and authentic. Musk has spent some of his time tweeting the latest news or general comments about different things, predominantly focusing on Tesla and SpaceX. Most importantly, the leader’s popularity on Twitter has been attributed to his followers knowing that Musk himself posts them and the willingness to share the journeys of his companies, including both ups and downs. For example, when the test of the Falcon 9 rocket resulted in failure and the crush was broadcast online, soon after, Musk posted on Twitter: “RUD = Rapid Unscheduled Disassembly :)” (Musk [Tweet], 2016). Openly sharing what may have been seen as a failure did not cause Musk’s audience of both SpaceX workers and the general public to doubt his ability to lead a technology-driven company. Instead, socialization with the broader audience makes Musk not only a leader but also a person with his own feelings and a sense of humor. The drive for intentional socialization is a notable leadership trait because its purpose is to engage as many people as possible in the discussion about Musk’s businesses. Besides, the attribute can also be considered a part of his marketing mind leadership.
Arvind Krishna: CEO of IBM
Stepping into the role of IBM’s CEO reasonably recently, in 2020, Arvind Krishna has already shown a unique approach to leadership in the context of the digital environment. Krishna has been characterized as “soft-spoken, relaxed and accessible [representing] a new leadership style of IBM” (Carville, 2020, para. 1). IBM has been consistently criticized for being entrenched in formalities and bureaucracy, which meant that for a new leader, restoring IBM back to its ‘glory’ days requires radical transformation. Krishna has been challenged with steering his company away from the unprofitable legacy of businesses and its slow growth and moving in the direction of the future of modern computing.
Knows the Company
The importance of Krishna’s contribution as a CEO and a leader is that he spent his whole career at IBM and experienced both the highs and lows. The company has fallen from the position of a leader in IT services and computing to missing the cloud technologies revolution and stepping back to less experienced but more successful competitors such as Amazon. The analysts of IBM’s leadership suggest that Krishna’s elevation to the CEO role is similar to Microsoft’s appointment of Satya Nadella to the same position back in 2014 (Novet, 2018). Nadella had big hopes for cloud technologies and succeeded, boosting the market valuation of Microsoft to more than $1 trillion (Carville, 2020). Notably, IBM’s shares gained 4.5% the Friday after the announcement of the change in leadership, leading to the valuing of the company at around $126 million (Carville, 2020). The statistics are indicative of the fact that a change in leadership at IBM was highly needed and anticipated, and the approach that Krishna has taken since has been detrimental to returning the company its reputation.
Krishna’s approach to leadership has been referred to as calm but insightful, firm but unaggressive. Through a new style that the organization has not experienced, Krishna intends to connect with as many workers as possible and establish a culture of transformational leadership. For example, on a recent trip to IBM’s offices in India, Krishna spent hours at the corporate cafeteria talking with whoever came up to him (WSJ, 2020). The leader a lot of time with team members, up to the early morning hours, answering questions and offering insights on the plans for organizational improvement. As Krishna mentioned himself, “you’re surrounded by really smart people. Listen to their questions – that makes you learn” (as cited in WSJ, 2020). Such openness in a leader is crucial for showing the company that change is starting to take place, and the reciprocal relationship established between the CEO and workers is the cornerstone of potential success.
Krishna’s approach to leadership is illustrated in his honesty and transparent communication with the members of IBM. In his address to workers named “Changes in My Leadership Team at IBM to Transform Our Culture and Skills,” Krishna (2020) mentions several appointments in the board of directors while also highlighting the intentions behind the changes. For example, when announcing the appointment of Obed Louissaint as the Senior Vice President of Transformation and Culture, Krishna praises the accomplishments of his colleague as a “skilled leader who has first-hand experience in shaping an organization’s culture to spur innovation and in aligning the skills of IBMers with the evolving needs of our clients” (Krishna, 2020). Thus, while highlighting the experience of a fellow board member, the leader shows his focus on the company’s clients and the need to change the culture to meet their needs.
Entrepreneurial Culture
Krishna is culture-oriented, which is shown in his promise to change it for the better. For him, culture is a vital force that will make it possible for IBM to capitalize on the potentially fruitful opportunities for growth in its industry. According to him, IBM is a company innovator in every dimension of its operations, and it truly meets its objective when customers find value in IBM that cannot be found anywhere else (Krishna, 2020). Because of this, culture is the most crucial component of long-term success, which enables IBM’s leader to facilitate an environment that encourages curiosity, ongoing learning, and quick innovation. Within such a climate, it becomes possible to foster an entrepreneurial mindset.
Being a proponent of the importance of corporate culture within organizations, Krishna has shown a unique approach to managing a technological giant. A common mistake that leaders of large tech companies make is the lack of understanding of the importance of combining culture, communication, and technology. In a 2020 interview for CNBC, Krishna addressed this problem by saying that besides a brand’s portfolio, “culture is absolutely critical. I have talked a lot internally about the growth mindset and about being much more entrepreneurial, and we can be entrepreneurs at large companies” (CNBC, 2020). However, establishing a culture of entrepreneurship at a large company is only possible with the help of an extreme focus, which allows organizations to be dedicated to a specific goal and adhere to the growth mindset (CNBC, 2020). Besides, in the interview, Krishna said that his approach to leadership is about thinking that a glass is half-full rather than half-empty, which entails focusing on what can be done as opposed to what cannot be done. Being entrepreneurial means going after what one believes to be valuable, which can bring much more satisfaction in the long run. Applying this culture to the entire company, according to Krishna, is what can help successfully combine culture, communication, and a tech-focused mindset.
The fact that Arvin Krishna is an Indian-born executive who reached the top rank at IBM should also be considered because the approach to leadership in India has its unique characteristics. Indian leaders have been shown to benefit from being brought up in a people-oriented culture that emphasizes humility, modesty, close-knit family connections, and diversity. As mentioned by Michael Useem, Professor of Management and Director of the Center for Leadership and Change at the Wharton School, Indian leaders place immense value on sustaining employees’ morale and building company culture (as cited in Jaishankar, 2020). Within such a perspective, people are perceived as assets that have to be developed rather than costs that should be reduced to the minimum, which is illustrated in Krishna’s desire to build a strong company culture. In Jaishankar’s (2020) book “The India Way,” the author mentions that Indian CEOs tend to be more flexible and resilient because they are likely to grow up dealing with adversity. Both a competitive drive and an entrepreneurial leadership mindset develop naturally as a result of living in a country with a billion people and limited opportunities (Jaishankar, 2020). Moreover, Jaishankar (2020) wrote that Indian CEOs and organizational leaders have “a personal steeliness and are unflappable” (p. 137). Based on the findings of a cross-cultural survey conducted at Southern New Hampshire University, Indian managers were perceived as having strong leadership traits (Mizroch, 2015). The findings suggested that Indian leaders were effective at achieving “extraordinary results and built great organizations without much hoopla” (Mizroch, 2015, para. 4). Thus, Indian leaders have shown to be increasingly popular CEOs in companies worldwide because of their resilience and entrepreneurship.
Likability
The factor of likability is also a crucial component characterizing the leadership style of Arvin Krishna. IMB’s new CEO has scored high on the scale of likeability alongside his ability to make complicated decisions without entering into conflicts with subordinates. This makes Krishna an authentic leader who shares the values of his organization and has taken on the ever-changing and expanding responsibilities across the organization without putting a strain on it. As mentioned in a. Bloomberg (2020) article citing a Bloomberg Intelligence analyst Anurag Rana, Krishna spearheaded IBM’s change toward a hybrid strategy, encouraging the organization to work in collaboration with fellow providers instead of competing against them. In addition, Rana mentioned that Krishna’s “openness and ability to work with everybody, from that point, this is very good for IBM” (Bloomberg, 2020, para. 20). In light of the highly-anticipated and welcomed change of leadership at IBM, Arvind Krishna has become a likable leader, which means that more people are willing to follow him on the path toward meeting organizational goals.
Innovative Leader
Besides likeability, professionalism, an entrepreneurial mindset, and transparency, Arvind Krishna has also been cited to be an innovative leader who has been “shaking up” the way in which everything at IBM was done. As a part of the strategy to refocus the company to hybrid cloud computing and artificial intelligence, Krishna intentionally engaged in disruption conducive to the strategic transformation of IBM. The transformative change has the potential of succeeding only to the extent that the company’s CEO can cultivate faith and engagement throughout the organization and embed them into the strategy and value proposition. Notably, Krishna initiated the spinning off of the business unit managing the IT infrastructure into a new public company. The reason behind the separation is attributed to Krishna’s desire to motivate people. According to him, the transformation would lead to engineers becoming increasingly motivated to create more technologies because they are allowed to focus on innovation without the need to consider sales. However, those working in the sphere of sales tend to get more productive when they can bring value to their clients. Besides, when managing operational and technological complexity associated with IBM’s transformation, Krishna does not follow the path of his predecessors and keeps focus on value. He mentions that it is important not to be “the person who can apply technology for technology’s sake” (WSJ, 2020). Instead, it is imperative to understand what substitutes value and how they should be approached by an organization so that others are interested in making commercial offerings for it.
Care for Others
Finally, care for others is an essential leadership trait that Krishna has exhibited since being in CEO’s position. In his letter “My first day as CEO – our journey together,” Krishna begins by stating that his priority in the global pandemic is the physical and mental well-being of workers and acknowledges the devastating impact of COVID-19 on IBM workers’ families, friends, and clients (as cited in Murray, 2020, para. ). During times of adversity, Krishna underlined the importance of solidarity, empathy, and understanding as backbones of the corporate culture. Besides, Krishna says, “I love this company. In my 30+ years with IBM, I have seen first-hand the tremendous talent and dedication that IBMers possess. […] I’m truly honored and humbled to be your CEO and to lead an iconic, storied, and innovative company like IBM” (as cited in Murray, 2020, para. ). Thus, through expressing concern for the well-being of his subordinates and underlining the privilege of being the CEO of IBM, Krishna shows that his authority means nothing without the contributions of others.
Reed Hastings: CEO of Netflix
As Netflix’s CEO, Reed Hastings has become known for his hands-on approach to leading a large team in an on-demand media giant. From the very beginning of his path as a leader, Hastings has given his employees a high level of autonomy that comes at a particular cost, which entails high expectations of performance and a culture of transparent feedback. Such a dichotomy makes the leader a unique case study of the approaches that modern leaders implement in the context of the digital business environment. Might it be an intelligent strategy, luck, or good timing, Hastings has credited the unique corporate culture of Netflix to the immense success of the company.
Unique Culture
Hastings has established an organizational culture in which workers can take vacations when they need them and make it last as long as necessary, and there is no dress code and no requirement for approving business expenses. Besides, when workers are bold enough and can offer constructive criticism can even get rewarded or promoted. Regarding this freedom, Hastings says, “it’s risky trusting employees as much as we do. Giving them as much freedom as we do. But it’s essential in creative companies where you have much greater risk from lack of innovation” (as cited in Allyn, 2020, para. 2). Thus, by choosing to focus on innovation as the cornerstone of the organizational culture, the leader has consistently empowered his workforce.
Believing that his workforce is skilled and sophisticated enough to perform in the autonomously-driven environment, Hastings expects that his employees will ultimately do what is right for Netflix. Such a belief fits with the transformational leadership concept, which allows leaders to reinvent the understanding of culture and create environments that they feel will be the most suitable for employees to reach the established goals. Hastings suggests that creating a company culture at Netflix that will be centered on traditional corporate practices can adversely impact the motivation, attitudes, behavior, and performance of workers. However, an innovative approach toward leadership and culture enabled the culture of reciprocity in which workers feel the obligation to repay the company for flexibility.
The idea behind establishing a unique and transformed organizational culture at Netflix came to Hastings as a result of the shortfalls the company experienced when operating in the sphere of DVD rental subscriptions. Under the strained circumstances, Hastings was forced to lay off 30% of the staff during the recession; however, this allowed the remaining workers to thrive and offer value to the company. Over time, creativity reached new levels, with managers being given the power to sign deals for millions of dollars without the approval of high-level executives (Lee, 2020). In their book No Rules Rules: Netflix and the Culture of Reinvention, Hastings and Meyer (2020) state that in a highly diversified business environment, organizations should be flexible and adaptable, and there is not much change occurring for the opposite.
As a leader, Hastings is transparent about the fact that the environment that he has created over decades of work does not fit everyone. Specifically, employees must be prepared to receive candid feedback for their decreased performance or perceived shortfalls in work. It is a common practice for employees to study their mistakes and make reports or presentations on what they have learned from them. Even after accepting the rules of the corporate culture, some Netflix employees may feel that the approach made them stressed and worried as they could be fired any day (Lee, 2020). Nevertheless, Hastings has consistently argued that the Netflix philosophy allowed the company to adapt to the ever-changing digital environment and become the leader of online streaming services.
Making Fewer Decisions
Another important characteristic of Hastings as a leader entails him making fewer decisions, allowing employees to take ownership of generating new initiatives, strategies, and products. For example, when approving “House of Cards” to be produced by Netflix, Hastings delivered around thirty minutes before greenlighting it. The leader credits the company’s culture of freedom and empowerment to rapid decision-making. However, such a decision was made not because of the lack of consideration or the absence of previous research; instead, employees had already completed an extensive exploration of the market and concluded that the show has immense potential. Hastings takes pride in making as few decisions as possible in a quarter (We Are Netflix [Tweet], 2018). The leadership strategy entails creating in employees a sense that they can make a difference if they want to make a valuable contribution.
What is unique about Hastings as a leader is that he does not align himself with traditional leaders, such as Steve Jobs. He has mentioned that certain companies’ conceptions of leadership were very different from his view. Specifically, Hastings said that “some companies operate by the principle of the product genius at the top. There’s this whole motif that to be a great CEO, you have to be a great product person. That’s intoxicating and fun, but you build in incredible amounts of dependence on yourself” (as cited in Snyder, 2014, para. 6). Thus, Hastings believes that being a leader does not mean being at the top of product development; instead, it entails building a team of great thinkers and innovators who can work both separately and collaboratively to accomplish set goals.
Acceptance of Errors
The acceptance of mistakes and learning from them is another trait of Hasting’s leadership at Netflix, although the approach is quite different from what can be seen in Elon Musk. The CEO of Netflix stated that it is poor judgment to establish foolproof processes for everything. In “dummy-proof” processes, however, “you only get dummies to work there” (Snyder, 2014, para. 7). Because of this, Hastings is opposed to that and focuses on giving employees freedom. While they will make mistakes, it is possible to get a lot of great ideas. Thus, freedom and rapid recovery from errors are better than trying to avoid making errors altogether.
The acceptance of the fact that mistakes are inevitable is attributed to the fact that Netflix is a creative business rather than a safety-critical business. Over time, the biggest threat for the organization is the lack of innovation, which means that the company must be relatively tolerant of errors, with quick recovery from them being possible if both employees and the leader have good judgment. According to the “Netflix culture” (2021) document, “the seduction is that error prevention just sounds so good, even if it is often ineffective. We are always on guard if too much error prevention hinders inventive, creative work” (para. 21). Therefore, Hastings has created a work environment that celebrates processes that increase productivity instead of preventing mistakes. A method used for this approach entails regular meetings, which usually start and end on time and have well-prepared agendas. Netflix uses such meetings to ensure that employees can learn from one another and are more productive at getting their tasks completed rather than preventing errors or approving decisions.
Candid Feedback
Hastings is a proponent of candid feedback and accepts the issue that many employees and managers struggle with giving. Being open and honest when giving feedback is complicated because of the fear of hurting the other person. To stay on good terms, team members keep the candid feedback to themselves, which results in the most valuable feedback not being given. At Netflix, the feedback guidelines have been summarized in a “4A” format: “aim to assist, actionable, appreciative, and accept or discard” (de Morree, 2020, para. 6). When it comes to giving feedback, the “aim to assist” principle entails giving feedback with positive intent and not because of the desire to get one’s frustration off the chest, intentionally hurting another person, or furthering one’s political agenda. Therefore, it is imperative to clearly explain how a particular behavioral change can help the company and the individual receiving feedback. Besides, feedback must be “actionable,” which means placing focus on what the recipient can do differently in the future rather than saying what had been done ineffectively.
When receiving feedback, it is important to be appreciative despite the fact that it is natural to humans to get defensive or apologize when receiving criticism, as people reflexively want to protect their reputation and egos. Thus, Hastings suggests that when receiving feedback, employees should show their appreciation through careful listening and approaching a message with an open mind, not becoming angry or defensive. Finally, the principle of “accept or discard” means that amidst the varied feedback that workers receive at Netflix, it is necessary to listen and consider all advice provided (de Moree, 2020). However, there is no requirement to follow everything. While saying “thank you” for feedback is essential, both the provider of advice and its recipient agrees that the decision to react to advice is up to the latter. Following the guidelines on giving and receiving feedback can be complicated and requires practice. However, Hastings is sure that the potential it provides is huge, as high quality is fundamental to the progressive way of working.
What is unique about Hasting’s approach to feedback is that he encourages it from the very top. For instance, in 2019, the CEO himself received some negative feedback from his employee and shared it with everyone else (Gallo, 2020). A worker told him that during meetings, Hastings tended to “skip over topics or rush through them when you feel impatient” (Gallo, 2020, para. 4). Instead of ignoring the feedback that was given by a worker who clearly stands lower than the CEO, Hastings said, “it is so frustrating that I still do this. I will keep working on it” (as cited in 2020, para. 5). Therefore, by cultivating a culture of consistent and honest feedback, Hastings receives more negative feedback than any other leader.
Discussion
Modern organizations operating in the digital sphere are challenged by immense competition, and it is the responsibility of their leaders to create environments in which workers will be as productive and motivated as possible. The analysis of the three approaches to leadership using the cases of Elon Musk, Arvind Krishna, and Reed Hastings presents several important takeaways. The first crucial finding is concerned with the fact that all three leaders welcome the transformational approach, which entails creating a shared vision, propelling knowledge sharing, and inspiring workers. Specifically, Elon Musk is a transformational leader because he is aware that risks are inevitable to take when striving for innovation. Arvind Krishna is a transformational leader because he challenged the culture of bureaucracy at IBM as soon as being appointed as the CEO. Reed Hastings is a transformational leader due to the abandonment of the traditional organizational culture to facilitate success (refer to Table 1).
Table 1. Key Takeaways on Leadership from the Literature Review
The breakdown of the approaches leaders take in the diverse digital environment has shown that all three of them, besides being transformational leaders, understand the importance of innovation and adapting corporate cultures to meet this objective. The entrepreneurial mindset is what unites all three leaders because they have a specific set of beliefs, knowledge, and processes driving entrepreneurial behavior. Moreover, both Musk and Hastings are welcoming of error as a tool for improvement and innovation through creativity and the freedom of doing whatever one wants. Both of them realize that risks must be taken in order to make a difference in their respective fields, and when risks lead to failure, it is the job of leaders to recognize their inevitability. At Tesla and Netflix, the greater perceived risk entails aiming for less, which is why both leaders set seemingly unattainable goals but succeed slowly through creativity and innovation.
Even though the approaches to corporate culture are different in the three leaders, their main objective is facilitating an entrepreneurial mindset conducive to goal accomplishment among employees. Among the three case studies, Hastings’s corporate culture is the most extreme, leading to some criticism as being ruthless and demoralizing. This is because some Netflix employees have struggled with giving and receiving radical and transparent feedback, while Hastings underlined the importance of accepting the practice for maximum efficiency and creativity. In contrast, Arvind Krishna’s approach to culture is the mildest as he views employees as sources of value and entrepreneurship, which means that they are assets to be developed and improved for maximum outcomes. As the leader of the most technology-oriented companies globally, Musk has established a culture conducive to innovation that reaps benefits from uncertainty. Within their respective organizational cultures, all three leaders have shown openness to communication and engagement with personnel. There have been several reported examples of CEOs being readily available to their employees and open to answering questions and addressing concerns. For instance, Musk has been seen sleeping on the Tesla manufacturing facility’s floor to be readily available to employees and address issues as soon as they arise. Reed Hastings has been open to discussing his shortcomings as a leader and promising to work on them in the future.
Conclusion
The analysis of the leadership approaches of modern leaders operating in digital business environments has shown that the key driver for them is innovation. By fostering an entrepreneurial mindset and challenging the traditional approaches to leadership, Elon Musk, Arvind Krishna, and Reed Hastings have cultivated organizational environments in which employees are motivated to show high levels of performance. Importantly, there is a sense of freedom that unites the leaders as they are not afraid to be vulnerable in the eyes of their subordinates and do whatever they can to instill a culture of openness. While Elon Musk accomplishes it through self-irony and acceptance of failure, Arvind Krishna pushes the narrative of an entrepreneurial mindset among workers as a means of pushing away the bureaucracy-ridden culture. In contrast, Reed Hastings challenges the traditional approaches to leadership and, edging on laissez-faire leadership, lets his subordinates do whatever they want as long as the results are there.
The current study has some limitations associated with the sampling method and the sample itself. Considering the narrow topic, purposeful (convenience) sampling was implemented to find the most appropriate and relevant literature on the topic of leadership within digitally-focused organizations. The search through keywords has shown that the largest bulk of information on the issue comes from recently-published online magazine and newspaper articles, which provide quotes from interviews with leaders. Through snowball sampling, Twitter posts and YouTube videos were accessed to get direct quotes from speakers as well as learn more about what they say about leadership themselves. However, considering the newness of the research topic, few published journal articles were available. All three leaders are current CEOs, and there is a gap in peer-reviewed studies exploring their approaches to leadership in a digital business environment.
The implications for future research entail the possibility of conducting a comprehensive study involving human subjects working at digital organizations. The current study provides a framework for future studies by showing that modern digital leaders are likely to combine transformational leadership with the mindset of innovation and entrepreneurship. It becomes possible to explore the attitudes of employees toward such approaches to leadership and evaluate the extent of their engagement and motivation working under the guidance of leaders that have abandoned traditional styles and techniques. Finally, the current thesis has reduced a gap in research regarding the attitudes and approaches that modern leaders implement when allowing their organizations to compete within the ever-changing digital environment.
References
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Appendices
Appendix A. Key Takeaways on Leadership from the Literature Review
Appendix B. Tweets
Appendix C. Infographic of Findings
