BusinessDay: Modern technology is a challenge to organisational hierarchy

Aloof leaders atop rigid pyramids of command are making way for agile and adaptive teams of equals.

By Johan Steyn, 7 June 2023

Published by BusinessDay: https://www.businesslive.co.za/bd/opinion/columnists/2023-06-07-johan-steyn-modern-technology-is-a-challenge-to-organisational-hierarchy/

Businesses and other types of organisations are undergoing operational paradigm shifts as a direct result of the widespread adoption of digital technologies in today’s world. The use of artificial intelligence (AI) across a variety of operational facets, which will have a substantial effect on leadership strategies, is the fundamental feature of this transformation.

Leaders today face unique challenges. At this point, AI is capable of processing huge volumes of data, automating complex processes, and making highly intelligent predictions. Modern business leadership demands not just an in-depth comprehension of the workings of this technology, but also an awareness of the ethical consequences of using it. Concerns over transparency, privacy and the security of personal data should always be at the forefront of one’s thoughts. Leaders now have the responsibility to establish a balance between making use of AI and resolving the ethical and societal issues it raises.

Organisational structures are undergoing a revolution in the digital age. Once lauded for their efficacy, traditional hierarchical models are giving way to more inclusive, flatter structures. In the contemporary corporate world, the dissolution of rigid hierarchical systems and personal barriers is reshaping the dynamics of leadership and collaboration.

The hierarchical leadership model was traditionally characterised by a top-down orientation. The rapid tempo of digital transformation and the resulting need for agility and adaptability have necessitated a shift. This shift has resulted in flatter hierarchies, in which leaders are no longer aloof figures atop an organisational pyramid, but instead are active participants alongside their teams.

This transition towards a more inclusive culture yields significant benefits. Organisations can unleash a treasure trove of creativity and innovation by ensuring that all voices are heard and valued. Diverse views generate a broader spectrum of ideas, which promotes problem-solving and fosters a more holistic approach to business strategies.

AI is an enabler, a tool that assists in decision-making, automates complex tasks, and fosters efficiency. Yet, its functionality is insufficient to replace human skills, particularly in leadership. Effective leadership involves emotional intelligence, empathy, vision and the capacity to inspire and motivate. These are traits AI cannot replicate.

AI cannot rectify a toxic work culture. While it can identify patterns and trends that indicate such a culture, the responsibility of building a healthy, inclusive and engaging work environment rests firmly with human leaders.

The integration of smart technology into the business landscape raises questions about the evolving skills of top executives. Traditionally, boards of large corporations have been populated by individuals with substantial financial experience, such as chartered accountants. As technology becomes increasingly integral to business operations, will we see a shift towards a cohort of experienced technologists at the helm?

The role of the board is likely to transform. A balance between technological expertise and traditional business acumen will be paramount. Understanding AI and related technologies, their potential and their ethical implications will become as crucial as understanding financial reports and market trends. Boards that can merge these skills will be best positioned to guide their organisations through the digital landscape.

This evolution also signals a shift away from progression based purely on tenure. The digital age demands agility, adaptability and continuous learning. The era of ascending to leadership roles based solely on years of service is being replaced by a meritocracy that values skills, competencies and the capacity to lead in a rapidly evolving environment.

• Steyn is on the faculty at Woxsen University, a research fellow at Stellenbosch University and founder of AIforBusiness.net.