Leaders need to develop new skills and focus on organization culture and people if they must succeed in guiding their organization into the uncertain future digital world.
Today, almost all organizations need a leader who has the knowledge and skills to integrate the needs of the legacy business with the new expectations created by digitization. Since the world is going digital – let’s call this leader a “Digital Leader.” Digital Enterprise-Journal (DEJ) has clearly defined the leader’s traits for an organization that is digitally transforming. This leader needs to drive the culture of innovation and continuous improvement in their organizations. They must build teams, keep people engaged and connected to drive the innovation culture. In my experience, the leader must also make digital relevant both internally and with the customers being served by the company.
I see a significant shift in the leadership needs of the organizations. Many organizations used to seek strong leaders with domain expertise in the past, but now they need an entirely different leader – more agile, innovative, and digitally ready. Many boards feel that they need to attract young and energetic leaders to be the new digital leaders to transform the organization effectively. However, I have found that the dominant needs are connecting with people and allowing the culture of innovation to be fostered, characteristics that are age-independent.
When I ran the US part of the business for a global IT services company, I believed that people are the company’s primary driver of value creation. This belief is true for all types of organizations. Unfortunately, many senior executives feel that technology drives more value than human capital, and the investment goes into technology rather than developing people. Technology is essential, but people remain indispensable. The topic of technology vs. human capital is and will be highly debated. If a company needs to transform its business for the newer digital age, one of the changes that executives need to bring is an intense focus on leadership development programs. In my experience, I have seen that current leaders are facing far more significant challenges than ever before.
There is a paradigm shift in the way leaders are evaluated – gone are the days when the leaders were lone heroes who will take the company forward. Now, leadership must collaborate by creating a team environment where the best skills of the individuals are aggregated toward building a higher degree of impact. Unfortunately, very few highly effective companies have adapted this. Many companies are still struggling to get out of the “Leader as hero” concept.
A new wave of Thinking needed in leaders of the Digital World
When I was growing as a leader, we were taught the Deming Cycle –an iterative four-step management method used in business to control and continuously improve processes and products. It is also known as the plan–do–check–act (PDCA). My experience taught me that to succeed in the digital world, I had to modify my cognitive, behavioral, and emotional traits. They needed to be differentiated – thinking, acting, and reacting needed to be transformational. Initially, I had great success with the people I was leading but had less impact on the board members who still believed in the “Leader as hero” concept.
I found it excellent that executives talk about these new concepts in conferences to boost their image but implementing or supporting the change in their organization often took a back seat. Increasing revenue and profits were paramount, and often, the connection between the digital world was left to be dealt with later.
It is becoming clear that older business models will no longer grow the business in the digital world. The leaders need to build new capabilities. The companies were built on the model of financial goals and hence created new control mechanisms. It’s time for companies to bring equal importance to both innovation and agility in the organization. Leaders need to redesign their organizations to be more dynamic, people-centric, and innovative. They need to create ecosystems of partnership. Leaders need to build dynamic teams and drive a culture that is focused on continuous improvement.
And most importantly, highly impactful leaders must have the ability to take risks. I have seen that the leadership teams that have the capability of taking risks have shown impressive results.
Millennials are also influencing what is required for a leader to be successful. They need continuous mentoring and help in developing career paths that make an impact for them. Hence, newer thought processes around inclusion toward improved execution are critical for a digital leader. Millennials are raised to believe that they can make a difference in the world. They are more tech-savvy than the previous generation. It’s important to recognize this and show them that you trust their abilities and allow them to be leaders. They must get meaningful and significant vital projects to work on. They will live up to expectations.
A few years back, I hired a fresh graduate from a top engineering school who could understand the concept of designing user interfaces. Within 4-6 months, she was able to have a meaningful conversation with the top leadership of our customers on this topic and became a good leader in her space within a brief span.
It is important to create a leadership pipeline at all levels. Top-heavy leadership is conducive to the growth of the company. I believe that companies need to have 40-50% leadership roles for Millennials.
Lessons Learned from Experience
All industries are facing talent shortages and resulting skill gaps as technology changes accelerate. Leadership decisions on automation investments are necessary as organizations balance managing the current state with the absolute need for future growth. Integrating the two pieces is one of the most critical agenda items for CEOs today.
Here is one of my personal stories – While working for a global IT solutions company, I recognized a gap in the development of our leaders, so we implemented a new strategy for evolving our leaders to drive Digital Transformation opportunities. We evaluated our team using the 360-degree feedback method and identified the potential leaders. With a pool of 40 potential leaders, we identified 12 that became part of the “Next Gen Leadership” program. The training program focused on building the traits needed to do the job. The training program also had elements of team building and was conducted by renowned people in the industry. The existing company leadership played the most critical role in sharing the challenging situations they faced while growing the business. We also invited guest speakers from the industry to share their stories, specifically in the area of Digital Evolution.
After the successful completion of the program, I promoted some young leaders and made them accountable for the company’s growth. It showed excellent results in the US business for the organization. Because of the impact, other regions of the organization adopted the core elements of our efforts, and it became a global program.