In a world of constant disruption and innovation-led advances, organizations are increasingly leveraging technology to transform their business strategies. However, as revealed in the Global Leadership Forecast 2018 (a joint research project by EY, Development Dimensions International, Inc. and the Conference Board), many companies are unable to keep up with the pace. The forecast also mentions that 50% of the 2006 Fortune 500 companies no longer exist, while futurist speaker Thomas Frey projects that advances in robotics and artificial intelligence will impact over two billion jobs in the next decade. Given the inescapable technological trajectory that the world is on, organizations with digital-savvy leaders who are cognizant of the threats and opportunities brought about by technology are now outperforming competitors with less digitally-capable leaders.
Digitally-savvy leaders are deemed better prepared to meet emerging business challenges, notably in anticipating and responding to new paradigms of competition, navigating complexity and leveraging on data and analytics to make decisions. This, in turn, results in stronger financial performance for their companies.
Digital-savvy leadership is an aspiration across the globe. In the Philippine context, we can surmise that there is also keen interest in developing talent that can address and lead companies in these disruptive and transformative times. In the Microsoft Asia Digital Transformation Study conducted in 2017, 86% of Philippine business leaders said they consider transforming into a digital business to enable future growth as a key priority, yet only 32% have a full digital transformation strategy in place. The disparity is an indication that there is urgent need to groom digital leaders for Philippine businesses to grow and remain relevant in the future.
WHAT MAKES A LEADER DIGITAL READY?
The Global Leadership Forecast 2018 mentions five key capabilities that digital-age leaders need to develop and demonstrate. These include:
• Driving digital transformation of business strategies and operations through technology, innovation and promoting digital “traits” in the organization;
• Navigating today’s complex digital landscape by accepting the options and realities that come with disruption;
• Connecting people, possibilities and technology;
• Relating to others by balancing people and technology;
• Thinking out of the box and finding holistic, creative and innovative solutions.
While different leaders advance their digital readiness at varying paces, there are certain competencies that are perceived as being more critical and that have the greatest impact on an organization’s performance.
• Digital leadership — Leaders need to understand the impact of digital and technology on their business, including the ability to foresee what new disruptions could possibly arise in the future.
• Flexibility — Digital leaders need to be mentally agile and adaptable to constant disruption, developing the focus to learn every day and the boldness to break away from “traditional” business processes.
• Execution — Digital leaders need to not only be able to come up with new ideas, but should also develop the skills to actualize those ideas — not necessarily in themselves, but within the organization.
• Collaboration — Given the disruptive nature of technology, digital leaders need to have the charisma, vision and leadership to get their people to work together to solve issues, break down internal silos, and achieve digital competency as a team.
• Talent — Digital leaders need to be able to identify and recruit digitally-savvy talent. This requires a deeper understanding of the new skills, competencies and experience that are becoming increasingly valuable in the digital age.
• Holistic Vision — Digital leaders must not only be able to see the bigger picture, but they also need to be able to stitch together ideas from different perspectives.
Developing effective digital-ready leadership does not take place overnight. It requires time, commitment and an innovation-led culture that permeates the organization from the top down. But it starts from identifying vital leadership roles in the organization and securing leadership buy-in for the company’s digital transformation. It necessitates re-evaluating the company’s current competency framework and adding in emergent skill and knowledge that need to be developed in current, as well as future leaders. Since these new competencies may not yet exist within the organization, leaders should also explore digital acceleration programs to help them adapt and immerse into the digital ecosystem and build technical awareness. Naturally, some leaders may not be able or willing to adapt to a digital mind-set, which may require a tough choice to consider replacing them with more digitally capable leaders.
What is important to remember is that “being digital” is not the same as simply “going digital.” It is not just a question of bringing new technologies into the organization. It’s more about making digital — and its related traits, e.g. innovation, a technical mind-set, always-on information access, open platforms, creativity and resourcefulness, among others — a deeply ingrained part of the organization’s culture and way of working.
To build a truly digital culture, leaders may need to revisit all the organization’s traditional processes — from recruitment to training and talent development, from reward structures to internal hierarchies, from conventional work spaces to cloud-enabled workplaces of the future, and other similar shifts.
Clearly, the amount of work and commitment needed to develop digital leaders — and by corollary, digitally-enabled organizations — is not for the faint of heart. But it is for the bold of vision.
Rossana A. Fajardo is the Advisory Service Line Leader of SGV & Co.