In the digital era, the fundamental nature of leadership has not changed, but the rapid development and deployment of social and digital technologies means that the expectations for leaders are evolving.

There are five new dimensions of leadership that reflect the increasing role and ongoing impact of new technologies in organizations, industries, economies, and societies. These dimensions extend traditional notions of effective leadership by adding a digital element to leaders' role requirements and responsibilities. Although these new dimensions are primarily applied to top organizational leaders, the underlying principles are relevant for all leadership levels.

Are you prepared to lead in the digital era?

Digital literacy

Leaders must be digitally literate, and they should ensure that the people who work for them are as well. Digital literacy requires knowledge and understanding of relevant digital era concepts, digital tools and systems, and social technology features, platforms, and tools.

Built on top of this knowledge base are the skills to use social and digital technologies efficiently, as well as the necessary judgment to use them effectively. Examples include knowing the right channel to use for a given communication, using email productively, creating and engaging properly in discussion threads and forums, understanding content curation and validation, contributing to a wiki, and applying HTML basics.

Leaders must recognize that the over-reliance on the distinction between digital natives and digital immigrants is counter-productive. Fluency is a state of mind, not a factor of chronological age. Anyone can be as digitally sophisticated as they choose to be.

Applications of social and digital technologies

Leaders must be able to see the competence-extending potential of technological innovations and consider the revenue-generating possibilities of pursuing them. We all have seen the disruptive and destructive effects of new digital technologies on traditional businesses and industries such as journalism, book publishing, retail, and music.

Given that, it can be hard for leaders to realize that these technologies also can create opportunities by enabling organizations to extend their traditional competencies into new areas. But it can be done. Long-established companies such as Nordstrom, Christie's, and the Financial Times all have benefited from reframing or extending their traditional business models to include a strong digital dimension and investing in creating multichannel experiences for their customers.

Leaders also must understand the wide range of ways that social and digital technologies can be leveraged internally to enhance communication and collaboration, increase innovation, streamline operations, and generally improve the performance of both individuals and groups. Today's five main technology trends—social software, mobile devices, big data and analytics, cloud-based tools and services, and the Internet of things—have the potential to change almost every aspect of an organization's operations.

Finally, leaders must recognize that their human capital and talent management practices will be transformed by social and digital technologies. The impact of these technologies on talent acquisition and learning, as well as HR operations, already is well established and it will continue to increase. We also will increasingly see applications in onboarding, performance management, career development, and leadership development.

Implications of social and digital technologies

Leaders must understand that social and digital technologies are changing the nature of work, and revise their approaches to workforce management accordingly. As the digital era continues to progress, changing technologies will give rise to a variety of new social and digitally oriented jobs and career paths, while also causing potentially significant declines and changes in more traditional roles.

These projected role changes likely will require new human capital strategies and adjustments in organizational structures, leadership roles, and hierarchies. They will necessitate new job descriptions and changes in planning and staffing, training and development, performance management, and compensation.

Leaders must help their organizations anticipate and manage digital era risks. New digital technologies can create risks for organizations by disrupting traditional business models, but risk in the digital era goes beyond that. Cybersecurity is an increasingly important concern for organizations of all types and sizes in all sectors. The hacking examples at Target, JP Morgan Chase, Sony Pictures, and various federal government entities remind us that we are all vulnerable.

Software is a crucial weapon against digital threats, but so are people. In fact, they often are the first line of defense—and unfortunately, the weakest link in the chain of protection. Leaders must ensure that their employees understand the variety of digital attacks and know how to protect against them.

Risk management in the digital era also involves protecting an organization's brand, reputation, intellectual property, and trade secrets, as well as protecting its employees against discrimination, harassment, and retaliation. Leaders must update their knowledge and understanding of the legal environment to include the ways in which traditional laws and regulations are expanded and changed by social and digital technologies. They also must update their understanding of the relative rights and responsibilities of the organization and its employees.

Digital transformation

Leaders are critical to laying the foundation for and facilitating digital transformation. The increasing application of social and digital technologies in organizations means that nearly every organization is destined to become a digital organization.

Leaders must recognize that the process of becoming a digital organization is a marathon not a sprint, and generally requires a holistic, integrated, and mindful approach to produce optimum results. They must:

Create the foundation for digital transformation by developing a strategy, laying out a roadmap, and instituting action plans.

Identify and perpetuate the cultural values that can lead to success.

Serve as champions and change agents.

Create and maintain internal governance structures that establish order and structure while giving people the freedom to collaborate and innovate.

Ensure their workforce is ready for and committed to change, and that they have the digital competencies they need to succeed.