Future leadership

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ROLE OF LEADERSHIP IN DIGITAL TRANSFORMATION

GLOBAL DIGITAL LEADERSHIP

We are in the midst of a digital revolution so powerful that even the COVID-19 pandemic could not slow it down. Want to build an adaptable, disruption-proof organisation? From Covid-19 to conflict in Europe, from net zero to navigating the vagaries of digital disruption: the challenges facing organizations today and the chronic uncertainty across our operations, supply chains, and markets are of such complexity that they require new ways of thinking and learning. These are adaptive challenges – problems that cannot be solved from the top down, but that require the people, teams, units and functions across the entirety of the organization to step up, to iterate and innovate, to learn and to adapt. For leaders looking to build disruption-proof businesses in today’s environment, there’s an imperative not only to become more adaptive themselves but to inculcate that adaptability across their organizational culture and their workforce.

So says Herminie Ibarra, Charles Handy Professor of Organizational Behavior at London Business School. And in her own research, her review of current thinking, and in her work with firms, she has identified five critical skills that leaders should prioritize in order to build adaptability within their organizations. “Businesses adjusting to adaptive problems today need to embrace a learning orientation that empowers people to become more adaptable – to experiment, iterate, and innovate and to share the learning around the organization. For many, this will mean finding new ways of working – and of course, overcoming the pushback that inevitably accompanies change. Getting people on board with new ways of working, winning hearts and minds, is contingent on building a set of skills as a leader and instilling those skills or capabilities across the entirety of the business,” says Professor Ibarra. “The five skills that we can observe are not exhaustive is nonetheless critical to making this happen. These skills are cross-cutting, collaborative, coaching, culture-shaping, and connecting.”

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?DIGITAL INNOVATION.

The revival of QR codes, the proliferation of contactless technology, and the swift development of life-saving vaccines are only some of the ways that innovation dominated and assisted us to prevail in this upheaval time full of destruction, lockdown, and unpredictable time which is marked a new revolution because of the explosive growth of digitalization and super technology to use the data for better use. Indeed, technology is here to stay. And businesses large and small, long-standing, and new, are starting to take notice in a widespread way to get the benefit of economy of scale. As digital tools become the norm in every aspect of modern life, business leaders’ interest in digital transformation has climbed sharply. In reality, according to this report by Finances Online, the digital transformation market is expected to grow from $469.8 billion in 2020 to $1,009.8 billion in 2025. The same report found that 70% of organizations already have a digital transformation plan or have started working on one.

?Organizations need competent and excellent power to navigate digital leadership.

According to a study conducted by the MIT Sloan Management Review, only 25% of CEOs are digitally proficient, and only 7% of businesses are led by a digitally competent group of leaders. Further, technological skill and expertise are only an iota of the problems when it comes to leading a digital transformation. Leadership must play a multi-faceted, dynamic role during a digital transformation. Understanding technology and leveraging it are just one of their numerous responsibilities. And that’s exactly what this article is going to cover – the complex (and vital!) role of leadership during a digital transformation.

Let us understand them one by one from a broad perspective as below:

WHAT IS DIGITAL TRANSFORMATION?

Digital transformation AI

Digital transformation is the process of transforming a business through strategic technology putting into practice. Its primary purpose is to make an organization relevant and competitive in an increasingly technological world. To accomplish a transformation, leaders must weave digital tools throughout the organization in a way that elevates performance. They must also fundamentally reimagine the way the organization operates. Digital transformation strategies are as diverse as the organizations that carry them out.

Although highly variable, these transformations can be categorized into four broad types:

Process Transformation?

The primary goal of a process-driven transformation is to improve process efficiency. Thus, all digital changes will be oriented towards improving processes. For instance, leadership might prioritize technology that reduces wasted resources and processing times.

Cultural Transformation

Also known as an organizational transformation, this is the broadest type of digital revolution. Transformations at the cultural level use technology to redefine what it means to be a part of the organization. Everything from day-to-day operations to employee training, to company values will see a drastic shift as technology is folded into the business.

Business Model Transformation

Business model transformation is akin to industry disruption. Here, an organization puts forth an innovative product or service that redefines how their industry creates value. A great example of this is the first iPhone, which broke paradigms in the telecommunications industry.

Domain Transformation

Domain transformation is like diversification, only more powerful. It involves using your current resources and market position to merge into a more promising, digitized industry. For instance, a graphic design firm that pivots from printing products to minting NFTs would be an example of a domain transformation. While there are distinct varieties of transformation, they all bleed into one another in the real world. Businesses often combine different strategies and objectives to achieve a truly holistic digital revamping. Regardless of the subcategory, one thing is certain of all digital transformations: they require sweeping changes, decisive action, and fearless leadership.?????????????????????????????????????????????

HOW TO LEAD A DIGITAL TRANSFORMATION

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Like any organizational change, a successful digital transformation must begin at the top and seamlessly flow to all corners of the business. There are many ways that leadership and digital transformation intersect. In the following section, we highlight the role that organizational leadership should play in a digital transformation.

Lead by example

Leaders must “walk the walk” in order to ensure technology is embraced by all employees, not just the IT department. Whether they’re department heads, CEOs, or the board of directors, business leaders of all ranks must play an active role in digital transformations. For a successful digital transformation, leaders must lead by example, use technology to promote company values & culture, manage the change effectively, and foster teamwork. Momentous change requires bold and versatile leadership. Ready to become a digital transformation leader? “A vision cannot be realized without the ability to execute.” This means business leaders must invest in their own digital proficiency. Why? Authenticity matters to employees. If you ask employees to level up their tech skills, but you don’t know how to send a Zoom meeting invitation – let’s just say that doesn’t send a consistent message about the importance of technology in your business. In short, tech-literate leaders promote buy-in by practicing what they preach.

Use technology to promote company values?

Technology without values and a moral compass leads to dystopian nightmares in movies and in real life! Leadership plays a crucial role, not only in setting company values, but in promoting them every day. Therefore, leaders must also ensure that company values and a healthy company culture remain at the core of the digital transformation. Plus, according to research from the MIT Sloan Management Review, modern workforces expect this from their leaders.

Manage the change effectively

Digital transformation is all about change management, and change management is all about effective leadership. Even the best digital transformation plan is destined to fail if the change is not managed correctly. To minimize disruptions while navigating transformation, leaders must commit to best practices in change management.

Foster harmony and synchronicity within teams

Just because you’re working with new technology doesn’t mean that collaboration and teamwork are not important. In fact, with employees spending so much time behind computer screens, deliberate team-building efforts are more necessary than ever. As leaders, it is our responsibility to foster teamwork. This will not only improve productivity; it will also create a better, more engaging digital environment for your employees.

Five leadership skills for the future:

We can also parse these so as to understand clasp on the subject issue:

1. Cross-cutting: Building broader, more diverse networks.

The capacity to build reach and diversity by constructing cross-cutting human networks is a skill that is demonstrably beneficial to leaders and to businesses. A groundbreaking US study of S&P 1500 CEOs managed to condense leaders’ professional networks of business contacts into a single diversity index – a quantifiable value that weighted things like the gender and nationality, education, professional expertise, and global work experience of the CEOs’ networks. These networks were contacts that leaders had proactively forged through school or university ties, work ties, and social connections. When the researchers compared network diversity values and looked for ties to the performance and value of the firms in their study, they found that CEOs with more diverse networks create more firm value—because they are more innovative, as measured by patents, and engage in more productive, diversified mergers and acquisition activity. CEOs who were diversely connected (at the 75th percentile of the researcher's “diversity index,” as based on gender, nationality, academic degrees, professional expertise, extracurricular activity, and global work experience), compared with those who were simply average, improved Tobin's Q, a ratio of market to book value of assets, at a level equivalent to an $81 million increase in market capitalization for a median-size firm in their sample. “What this study shows is that CEOs who cross-cut their networks and build more heterogeneous contacts have access to diverse knowledge and expertise. They have greater visibility of emerging and international opportunities. As a result, they enjoy benefits like higher quality patents, more successful mergers and acquisitions, and better stock evaluation.” But there’s a catch. Human beings are hardwired to cleave to the familiar. We bond more easily with those similar to us or who share cultural or societal values. It’s as though we’re programmed to be narcissistic, says Professor Ibarra. And we’re “lazy” when it comes to rooting out the new. So how do we build more diverse networks as leaders? It’s as simple as getting comfortable with being uncomfortable, she says. That might entail involving people from different units, functions, backgrounds, ethnicities, ages, or thinking styles in group decisions to spark divergent ideas. It could be as simple as purposefully sitting next to someone new at lunch. Whatever form it takes, cross cutting your network will build your perspective, expand your knowledge base, help challenge assumptions, and surface new ways of thinking about adaptive problems.

2. Collaborative

Collaborative leadership harnesses the benefits of diverse and divergent thinking, but getting it right is contingent on setting up the systems, processes, and cultures that enable the free exchange of ideas. Keen to codify the secrets behind the perfect team, US behemoth Google embarked on a two-year study, Project Aristotle, published by the New York Times Magazine. Looking at 180 Google teams and more than 250 team attributes, the study found a group of behaviors or norms that actively promote constructive collaboration. These norms included dependability, having structure and clarity, and ensuring that the work itself has meaning and is understood to lead to a positive impact. But underpinning them all was one primary characteristic that enabled all the others: psychological safety.

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“Creating psychological safety such that everyone feels empowered to speak up without fear of scrutiny or recrimination means learning, as a leader, when to hold back and make space for others to contribute,” says Professor Ibarra. “It means learning to listen and building the social sensitivity to draw out the introverts or those less inclined to speak out. It’s about understanding that sometimes silence is the default, and having the awareness to pull out contributions where necessary.”

3. Coaching

Coaching is about empowering your people to make optimal use of their autonomy – of their ability to make their own decisions in a way that is adaptive and agile. And that is about making a shift from ‘know it all’ to ‘learn it all,” says Professor Ibarra. “At its core, coaching isn’t about telling people what to do or how to make decisions. It’s about asking them good questions that affirm their knowledge, abilities, and confidence in their contributions – and thereby encouraging them to bring their own creativity, innovative thinking, and solutions.” Good questions, she adds, are open-ended and not leading: “If you know the answer already, don’t put it as a question because it’s a statement.” Instead, aim to create conversations with employees and take a leaf from the books of firms like Microsoft who have made the shift from a culture of inspection to a culture of coaching – of giving managers the sense of empowerment, agency, and the confidence to unearth problems and find solutions for themselves and for their clients.

4. Culture shaping

Microsoft also has valuable lessons for leaders in terms of what Professor Ibarra calls culture shaping. She cites CEO Satya Nadella, who instituted a culture-wide shift from internal competitiveness – an institutional jockeying for position and influences attached to established knowledge or expertise – to a growth mindset: a culture of experimentation, trying new approaches, embracing failure and learning without fear of reprisal, judgment or career limitation. “Shaping your culture sometimes means having the courage to destroy certain processes or systems in favor of better ways of doing things. Nadella took a risk pitching learning as the core cultural pillar at Microsoft because learning implies getting it wrong, making mistakes and absorbing the lessons along the way.” Perhaps the greatest example of this was the decision by one of Nadella’s direct reports, Jean Philippe Courtois, to transform the way the company did quarterly business reviews, says Professor Ibarra. “The mid-year quarterly business review engendered fear, it took weeks and weeks to prepare, they meant that Microsoft employees had their eyes off the ball – their customers. In transforming how they were done, Courtois was really walking the talk in making the firm more adaptable, more agile, and more growth-oriented. Sometimes, with culture shaping you need to take a wrecking ball to those things that are no longer fit for purpose.”

5. Connecting

Professor Ibarra’s final C ties to the interpersonal dynamics of leadership. Her challenge to leaders is to ask themselves this question: why should anyone work for you? Building the connections, trust, the engagement among team members and employees for those people to then buy in and align their efforts around your leadership is contingent on modeling certain attributes, she says. Among these is empathy – a skill like any other that can be learned, developed, and improved. “Empathy may not come naturally to some and it may be something to work on – to reflect on and to proactively think about as a core leadership skill. Certainly, if the last few years have taught us anything however, it’s that human qualities such as authenticity, humanity, transparency, and vulnerability – the skills that undergird leaders’ ability to connect with their people – have been critical in withstanding disruption.” Life has changed dramatically in the last few years, says Professor Ibarra. And what got us here is unlikely to get us there, she warns. Taking regular stock of how leadership – and the expectations around leadership – continue to evolve is key. It is key to remaining relevant, effective, and successful as a leader, and key to safeguarding the adaptability and well-being of workforces and organizations in times of chronic change and uncertainty. Discover fresh perspectives and research insights from LBS

CONCLUSION

These days, it may seem like every business is rushing to unveil its own digital transformation. But a successful transformation doesn’t just depend on shiny new hardware. It hinges on capable, forward-thinking leadership.

Leaders act as intermediaries between the employees and the management, create new goals, delegate responsibilities, and tackle challenges. They must lead by example, use technology to promote company values & culture, manage change effectively, and foster teamwork. A McKinsey research report reveals that less than one-third of all digital transformation efforts succeed globally, even for digitally savvy sectors like media and tech. The success rate is even lower for other sectors. The biggest challenge to achieving widespread transformation is reluctance from the employees to accept new technologies or policies 1. Therefore, it is essential for leaders to understand that change starts with people. Successful digital transformation programs begin with the need for senior management to understand this 1. To survive, lead, and create the future, Johansen argues that leaders must build and apply these 10 future leadership skills: maker instinct, clarity, and dilemma flipping. Accelerate your next career move with our Women in the Leadership program. Gain the confidence to lead and build a network of supportive female peers from diverse backgrounds, with a unique program format that blends virtual and classroom learning for maximum impact.