In his pioneering Harvard Business Review article, “What Leaders Really Do,” John P. Kotter asserts, “Management is about coping with complexity. Leadership, by contrast, is about coping with change.” He adds that what leaders really do “is prepare organizations for change and help them cope as they struggle through it.”
We live in the digital age where market dynamics continuously shift and the constant evolution of technology is disrupting the face of every industry. Leaders must help their organizations manage this avalanche of change. Hence, every leader is expected to be a digital leader. No organization can afford to maintain two separate leadership categories, namely business-as-usual leaders (analog) and new age leaders (digital).
Let’s take a look at some of the qualities that leaders must cultivate so they become digital leaders.
Digital LiteracyAt a minimum, leaders must be capable of answering the following questions:
- What is digital?
- How is digital impacting (or expected to impact) the organization and the industry?
- How can organizations leverage digital to create better value and experience for clients and consumers?
Although the word digital is pervasive and omnipresent, not many leaders are comfortable defining it. Leaders can develop a clear understanding of what digital means by diving into extensive literature, gathering multiple perspectives, interpreting the term in their own business context, and forming a point of view the leader can unambiguously articulate for the benefit of others.
To illustrate this point, consider that the term digital in Wikipedia is defined in a naïve manner as “something using digits, particularly binary digits” and then it provides links to various other sub-groups of terms like “technology and computing” and “brands and enterprises.” There is no doubt that we need a better definition in the context of talent management work. Instead, we may need to think about digital in terms of a strategy or as a mindset.
For instance, digital as a transformative strategy redefines and enhances human experience by leveraging latest technologies and digital tools. With this as the focus, the key elements of digital are:
- It has the goal of redefining and enhancing human experience (related to customers, employees, end-users).
- It is a transformative strategy, not just meant for an incremental change.
- It leverages the latest technologies.
Case in point: Uber’s business model is based on a strategy that has redefined and transformed the traditional cab services by:
- building an app and an eco-system around it which provide a superior end user experience
- not owning any inventory of cars
- not employing any drivers
- leveraging latest technologies like mobile apps, location and map services, cloud, payment gateways, and so on.
Digital as a mindset is focused on challenging the existing ways of doing things, irrespective of role, to create an enhanced experience for stakeholders by leveraging latest technologies. For example, when Elon Musk envisioned the possibility of reusable rockets capable of re-flight, he challenged the existing way of launching rockets. Successful implementation of such rockets can bring huge cost advantage to space programs and will make space flights affordable to masses in the long term. This sort of breakthrough will eventually add value to society at large.
Likewise, when Amazon came up with and implemented the concept of Amazon Go, where customers would not have to wait in any queue for purchase, checkout, or payment, it altered the way people experience retail stores.
In a recent article in The Wall Street Journal, Andy Main combined these two views (“digital as a strategy” and “digital as a mindset”), pointing out that digital transformation is not just about technology. “Ultimately, the goal is to uncover opportunities to better address human needs by applying innovation, design, organization, and digital technology to existing and new business models. Making that happen requires a digital mindset that influences every aspect of the business, including strategy, talent, operations, and customer engagement,” he writes.
Talent development leaders have a critical role in developing the digital literacy of their organization’s leaders. They can help leaders:
- provide a strong vision, purpose, and strategy around digital transformation—allowing it to be co-created and co-owned by the team
- put practices in place that enable the team members to develop the required digital capabilities
- crafting a governance model around digital transformation.
Disruptor’s MindsetLeaders are not only expected to cope with change, they are expected to lead change. But to truly exhibit digital leadership skills, one needs to challenge the status quo and often disrupt a business-as-usual mindset. To this end, leaders typically feel a sense of urgency to reinvent their strategy and, if required, even cannibalize their own products and services by reimagining a new business model. Leaders know that in the digital age, if they don’t take the initiative and disrupt their own business model, someone else will.
In a conversation with HBR’s Angelia Herrin, Workfront CEO Alex Shootman says that based on a recent survey it has been found out that “only eight percent of companies’ CEOs believe that their business model will remain economically viable if their industry continues to digitize at its current course and speed.”
Even when a legacy company reinvents itself after going through a digital transformation journey, it can’t declare victory because in digital world, competition increases exponentially. The company would have to evolve at a faster pace than earlier to stay relevant. When we look at Uber, the poster child of digital transformation, we realize the tremendous competition it faces in different regional markets—be it Lyft in the United States and Canada or Ola in India. In some countries, Uber has even merged with a local entity like it did with Didi in China.
Another interesting case that may help in understanding a disruptor’s mindset is the Chinese electric car maker Byton. Founded by two industry veterans, Carsten Breitfeld and Daniel Kirchert (ex-BMW and ex-Infiniti, respectively), the company aims to transform the way consumers experience mobility.
“Earnings will come from selling mobility, not just selling cars. Byton is about electric cars that are smart, connected, and autonomous,” Carsten points out in a recent interview with McKinsey Quarterly. “The car will become a platform—a smart device on wheels. This platform can be used to sell digital content generated from data, and those products will be designed for shared mobility.”
The Wall Street Journal article, “Cultivating Digital Leadership,” talks about some of the pertinent qualities of a leader in the context of this kind of disruption, including “risk-taking and experimentation by creating programs that focus on new product and service innovations and encouraging participants to experiment as they gain new skills.” The author also identifies some primary types of digital leaders: digital investors, digital pioneers, digital transformers, and digital enablers.
Cultivate and Leverage DataData plays a crucial role in the digital economy. A savvy leader must integrate the decision-making process with data analytics. A Fortune India article emphasizes that “data-driven decision management values decision making backed with hard verifiable data. The success of the data-driven approach depends upon the quality of the data gathered and how well it is analyzed and interpreted.”
Another article from CMSWire.com concurs: “The key to any digital workplace success is realizing that digital and data are connected, and leaders must recognize that being data-driven is a core requirement to run a successful digital business.”
But leaders should not only focus on how to analyze existing organizational data, they must also strategically plan on how to store new data sets (that have not yet been captured). In other words, leaders must constantly consider how to use artificial intelligence, machine learning, and other advanced technologies to cultivate and leverage new data so their companies are positioned to reap future benefits.
To succeed in this endeavor, leaders must create a vision, strategy, and roadmap around:
- how to use organizational and business data for decision making and for competitive advantage
- how to reframe a business question as a data-centric question
- how to effectively employ data analytics, AI, and machine learning for better predictability, enhanced customer and end-user experience, and deeper insights into the business
- what additional data capturing systems and processes need to be implemented to build better data mining opportunities in the future.
Break Silos and Empower CollaborationLeaders have always played a vital role in breaking silos, empowering teams, and facilitating collaboration. However, in the digital age, the cost of not having internal cooperation and teamwork while forcibly trying to create a seamless customer experience on the outside is unsustainable.
According to Alex Shootman a lack of synergy among different teams is a “digital work crisis.” He indicates that “companies know that digitization is the path forward. But most organizations do this kind of function by function. And so, it makes it impossible for teams to execute together. And because of that, executives are flying blind; they’ve got no way to play, no way to execute, no way to measure what’s going on.”
To break silos and enhance collaboration, the talent development function can help frontline leaders take one or more of the following steps:
- forge multi-disciplinary, multi-functional partnerships and create new opportunities
- foster an inclusive culture and encourage diversity of thought
- lead beyond the perceived role and structural boundaries
- promote boundaryless behavior among business, IT, and other teams
- communicate the vision, purpose, and strategy at all levels
- co-create the future with customers, employees and other stakeholders
To empower teams in a digital workplace, leaders should encourage members to think differently and challenge the status quo. They need to avoid micro-management and provide only directional inputs, as well as work efficiently with any virtual teams and build trust-based relationships. What’s more, they need to identify next-generation digital coaching them and offering growth opportunities.