Digital Strategic capabilities | Digital leadership

Every article of this publication series outlines some aspect of leadership in digital organizations. The entire series is for leaders who are responsible for defining and implementing digital strategy and for ensuring their organizations’ ongoing relevance.

?Defining and implementing digital strategy requires a fundamental shift in mindset, culture, and capabilities throughout the organization. This shift must start with the leaders.

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We will talk about below topics:

1. Digital mindset
2. Communication
3. Relationship management
4. Education and Learning
5. Evaluating emerging technologies and industry trends
6. Agile management techniques
7. Defining and using strategic metrics
8. Orchestrating diverse environments
9. Operationalizing strategy
10. Business and technology management skills

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1. ?Digital mindset

A digital mindset is a set of attitudes and behaviors that cause someone to constantly consider the possibilities that digital technology offers their organization and its stakeholders and look for ways to make those possibilities real. This does not mean making changes for the sake of keeping up with technology trends. Rather, it means understanding how technology is changing the way people live and work, and collaborating with others to ensure that the organization stays relevant in the context of those changes.

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A digital or ‘growth’ mindset recognizes that the changes happening in society and industry are not just happening to others, and they are not only visible to leaders. Employees, partners, and customers are going through these changes personally, in their homes, schools, communities, and social activities. Far from trying to enforce new and foreign work practices onto an unwitting workforce, the digital mindset seeks to expand and accelerate possibilities that are already on their horizons.

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Successful digital organizations show a fundamentally different way of thinking about leadership. They use emerging technology as a foundation for their business, but their mindset is deeply human. Examination of recent case studies, blogs, and articles on what makes leadership work in these organizations shows consistent themes.

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It is difficult to hire or develop mindset. Instead, it emerges as part of an individual’s and organization’s values and beliefs, sometimes stimulated by a person’s history of work. The best digital leaders are people who understand their business and its history and people, but who have a record of understanding and implementing new ways of working. Organizations may need to change their leadership criteria, promoting those with the appropriate mindset rather than those who are traditional, are long-term employees, or have the most advanced degrees.

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A conservative organization wishing to pursue a digital transformation strategy may find that it does not have enough people with the appropriate mindset, institutional knowledge, and digital skill set. To resolve this, leaders will need to do four things:

• Convince senior executives to support a fundamental shift in culture and work practices (defining what kind of organization they need and want to be part of, and what values and beliefs the organization will cultivate).
• Hire people who understand the organization’s business and have made the type of changes desired in other organizations.
• Listen to and support the new hire’s recommendations and decisions, even though they may result in temporary discomfort and difficult changes.
• Instill behaviors, language, metrics, and rituals that are consistent with the vision and desired cultural changes at every level of the organization. Because culture tends to develop around the organization’s values, leaders must exhibit behaviors that demonstrate their commitment to the new way of working and reward employees who do the same.

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1. Communication

Exceptional communication skills are a fundamental requirement for digital leadership. These skills include the ability to:

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• Communicate at every level of the organization At an executive level, a leader needs to be able to articulate the value of every element of the digital and IT strategy. At the level of the impacted workers, a leader needs to understand the strategy’s impacts and be able to explain any forthcoming changes and their benefits. They should ensure that, even if the workers are unenthusiastic, they understand and will comply with the changes.
• Plan a communication strategy A communication agreement or commitment with consumers, partners, employees, and senior executives.
• Obtain feedback to ensure that the communication has been effective Good communicators monitor the results of their communication efforts to ensure that there is no misunderstanding or confusion, and they remedy these if they occur.
• Frequently update stakeholders about the status of initiatives in the program This should be done in a format and with information tailored to each stakeholder group. Stakeholders should be aware of the vision, their roles and responsibilities, and the timelines and deadlines. For example, a supplier should know what they are expected to deliver, at what price, and when. A customer should know when and why their service will change, what they are expected to do, and what things will look like once the change has been made.
• Showcase outcomes rather than performance For example, instead of stating that a team has achieved its milestones, give an overview of what the team has achieved, including personalized examples. Digital leaders are great storytellers of team and organizational successes.

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1. Relationship management

?Without proper collaboration and coordination, the scale and number of changes introduced by digitization will increase miscommunication and disorganization.

Digital leaders rely on alignment, communication, and collaboration between stakeholders in different areas of the organization. Relationship management is more than a skill set: it should be a formal practice in which digital leaders play a central role. Relationship management is ‘high-touch’, not ‘high-tech’.

The relationship management practice addresses relationships between individuals, teams, organizations, and virtual groups of stakeholders. It is instrumental in:

• establishing shared or mutually recognized goals
• facilitating a culture of no-blame cooperation and collaboration
• continual learning among and between teams
• setting guidelines and policies for open and transparent communication
• defining how to identify, prevent, and mediate in conflict situations.

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Digital leaders will find relationship management invaluable for linking strategic objectives at an enterprise level with the objectives of individual parts of the organization. When implementing strategic initiatives, they can set up appropriate agreements to align goals and establish performance objectives between different types of stakeholders.

?The relationship management practice guide provides detailed information about how to establish, manage, and execute this practice. It is a valuable resource for digital leaders.

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1. Education and learning

?Education is an ongoing activity that is central to the success of digital organizations. Specifically, ongoing education enables digital leaders to:

• understand the changes occurring in the internal and external environments
• identify technology and industry trends, and learn how these may be used to address specific areas in their organization
• learn about the mistakes other organizations made when adopting new technology or creating new business models
• communicate details about the organization’s digital and IT strategy, and set expectations about the changes it will introduce
• inform stakeholders about how the application or use of new technologies will achieve or increase the organization’s competitive advantage
• achieve higher levels of enthusiasm for the initiatives identified in the digital and IT strategy across all stakeholders
• teach the appropriate stakeholders the basic concepts and techniques of building, managing, supporting, and using each new technology
• promote a sense of humility: no one in the organization knows everything.

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1. Evaluating emerging technology and industry trends

Digital leaders must be able to evaluate technologies and industry trends in terms of the opportunities or threats they represent for the organization. This requires an in-depth understanding of the organization’s:

• current architecture, including which components might be impacted
• business model
• products and services, and their associated value propositions
• operating model and value streams.

?Aspects of this can be covered in the next articles.

?Not every emerging technology will align with an organization’s goals and vision, so digital leaders need to understand how to identify the technologies and trends that will significantly benefit their organization.

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1. Agile management techniques ?

?Digital organizations must be able to manage the high volume of innovation that their customers demand. To do this, they may use agile approaches to reduce time to market and respond to the level of change in their industry.

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This approach involves merging build and run cycles, reducing design and production times, and automating or outsourcing as much repetitive work as possible. Cross-functional teams aligned with value streams are common. All of this requires a very different style of leadership.

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1. Defining and using strategic metrics

?Strategic metrics focus on outcomes and strategic objectives. Managers who are used to reporting performance (revenue, expenditure, number of items produced, number of incidents solved) and quality (number of exceptions, uptime, on-time delivery) must change their focus. Although these metrics can and should be an input for some strategic metrics, they are not enough by themselves.

?Strategic metrics indicate whether:

• the initiatives designed to achieve the strategy are on track
• the strategy continues to be relevant and achievable
• the organization will achieve the anticipated benefits by following the strategy, or whether it needs to change the strategy or make further organizational changes.

?Digital Strategy metrics are covered in detail in newsletter’s article https://www.dhirubhai.net/pulse/digital-strategy-measuring-ahmed-shokry/?trackingId=RyAB9OwxRDSPZjtnHNtdWQ%3D%3D

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1. Orchestrating diverse environments

Digital organizations are not only diverse in the culture and background of the staff they employ, but also in the technologies they use and the array of disciplines and knowledge they need to access to be successful.

Digital leaders need to develop leadership styles that facilitate collaboration between these diverse capabilities in support of the organization’s objectives.

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1. Operationalizing strategy

?Leaders who play a strategic role will find themselves in a unique, often uncomfortable, position. They are visionaries, ahead of the rest of the organization. They are also pragmatists, whose job it is to discover how to realize the benefits of each possibility they and their teams have discovered. Vision is only valuable if it can help the organization to meet its objectives. Digital leaders must combine imagination and application.

?Digital leaders also need to be comfortable with the uncertainty that comes with being between the possible and the actual. They must develop a reward system based on being able to live and thrive in this in-between space.

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1. Business and technology management skills

?This chapter has listed a range of unique capabilities and features of digital leaders. In addition to all these, digital leaders are business leaders who must have the skill and knowledge that qualifies them to lead in their organization.

?Digital leaders must understand the business of their organization. They must understand the technology upon which they are placing its future. Crucially, they must understand the disciplines and skills of managing both.

?The languages of finance, marketing, business operations, information security, modern ways of working (such as ITIL 4, Lean, Agile, and DevOps), and technology management are all essential for a successful digital leader, as they are for any business leader.

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Effective digital leaders are not necessarily born with the skills needed to lead a successful digital organization. Rather, they learn, develop, and practice ‘conscious leadership’ skills.

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