E-Business vs Innovative Leadership

The e-business revolution is changing the face of today’s and tomorrow’s organisations. One of the most critical challenges emerging in the e-business domain is the issue of leadership. The transformation to an information economy necessitates new ways of working, and hence, new ways of leading. Innovative leadership strategies are required in the B2C domain most importantly if organisations are to succeed in an increasingly dynamic and volatile e-business environment.

Such visionary leadership is often identified as a salient characteristic of successful e-business. But what does visionary leadership mean in the e-business domain? Innovation in IT requires a middle-driven leadership approach, rather than a top-down approach that was common in the past. It is at the middle level of management where the real strategists and visionaries are found, since business is a process game and it is the people in the middle who understand the process. Reliance on a middle-driven leadership approach will mean tangible changes in the workplace: there will be more non-technical leaders and colleagues who have greater knowledge of business processes where collaboration is the currency of innovation and diversity its enabler.

A cross-industry study of managers at more than 55 well-known US companies at varying stages of leveraging the Internet by recruiting firm Spencer Stuart indicates that executives in these organisations are searching for leaders who can develop cultures and teams that can capitalize on new channels, are comfortable with ambiguity and possess an entrepreneurial spirit. According to this study, such leaders possess three key traits: quick thinking, communication and flexibility. Two of the top five critical functions of these leaders include marketing and business development.

The issue of innovative leadership is also addressed in studies that have examined the attributes of successful B2C e-business organisations. Firstly, leaders regard the Internet as the cornerstone of a network-centric business era. Secondly, leaders distinguish the contributions of information from those of technology, since they realize that enduring advantage comes not only from technology itself, but also from how information is collected, stored, analysed and applied. It is not enough for organisations to use technology strategically; organisations must also deploy technology in an appropriate organisational and managerial context. It is when technology is treated as an asset and afforded a key role in the transformation process that there is greater likelihood of technology leadership, business success and the establishment of a competitive advantage.

Thirdly, leaders recognize that competition, opportunities and customer expectations evolve rapidly. Related to this, leaders also learn quickly and have the capacity to shift focus, since leaders concentrate on building an integrated technology, information and marketing platform. For example, the practice of differentiation is a key to e-business success. The challenge for organisations in the domain of differentiation is to continually differentiate the product or service over time, to make it less price sensitive, yet in ways that remain attractive to the targeted market segment. Finally, leaders follow a top-down or outside-in route to business innovation, focusing on business plans and goals and the subsequent integration of technology into these business initiatives.

A more specific study of leaders in B2C commerce in the retail area, founded that retail leaders have four attributes: they know the strategic purpose behind their web sites; they build an organisational structure to suit that purpose; they install benchmark processes and practices to meet customer preferences, and they employ the technology necessary to execute their plan and decisions.

Another study reported five different strategies serve as stepping stones to a successful web strategy: vision, governance, resources, infrastructure, and alignment.

  • It is necessary to approach the issue of strategic vision in e-business as a continuous cycle that involves both building on current business models and creating future business models through selective experimentation. The aim is one of balance: refining current business rules while creating new business rules for the e-business domain. Strategic challenge is to spearhead experiments to assess future states and migrate operations to the desired state. Establishing the vision and rationale for these experiments, including the mandate to proactively cannibalize the current business models, is a critical hallmark of leadership.
  • The challenge of managing an e-commerce organisation is daunting since they differ markedly from traditional business operations. Essentially, the issue of governance entails two fundamental decisions: operational decisions and financial decisions. The governance of e-commerce organisations is best seen as trade-off between these two decisions: how organisations differentiate and integrate operational and financial issues.
  • Interlinked with the issue of governance is the issue of resources: how do organisations best assemble and deploy resources in order to succeed in the e-commerce domain? Four different but interrelated approaches are required in order to assemble and deploy the required resources: placing strategic bets; learning how to leverage your alliances; outsourcing of operations and maintaining operational parity. Effective strategies for organisations in the e-commerce domain are based on the pattern and timing of resource deployment, since such decisions are different from traditional business models. Resources must be assembled from multiple sources and managed on a dynamic basis .
  • The establishment of operating infrastructure is the fourth critical strategy for organisations establishing a web strategy. The four characteristics of operational infrastructure that are the building blocks of an integrated physical-digital platform include: attaining superior functionality; offering personalized interactions; streamlining transactions and ensuring privacy.
  • The alignment of a management team. Articulating the roles of key members in the management team is critical in shaping the strategy of e-commerce organisations. Such organisations require a pattern of leadership that differs greatly from other transformational business activities. Value creation is at the heart of e-commerce. Hence, leadership in such organisations involves strategic challenges of business creation; issues of the governance of organisational structures; new avenues of financing; changes in operational infrastructure, external relationships and patterns of resource deployment.

These models of leadership in an e-business environment give a diverse overview of what is required of an individual to be a leader in an e-business environment. But the question then arises as to which is more accurate.

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