Sharing Economy – The rise of the Digital Leader in incumbent organisations

The rise of the sharing economy is surfacing a new kind of leadership. Many Digital leaders are creating new consumption models as part of pure play disruption. Digital leaders in incumbent companies are shaping new digital offerings alongside their traditional business model. 

McKinsey describe Digital Leadership as having some major capabilities: 

1. Agile decision making
2. The ability to connect business systems 
3. A focus on value - both customer and shareholder value 
4. Balancing a two speed IT environment. 

Forbes describes it as having five characteristics  which compliment Mc Kinsey’s principles. So there is a general pattern evolving. Deriving value from digital as a disruptor (pure play start-ups such as Netflix, Spotify, Deliveroo) or as an incumbent (think Tesco, John Lewis or B&Q) as they seek to transform their business models through partnerships, alliances and new ventures. 

Understanding and responding quickly to the user is the common thread regardless of the business model. So, we are seeing digital leaders not just in the pure play disruptor space but also rising quickly in our incumbent client organisations. Traditional businesses are embracing values such as courage, foresight, action orientation and boldness in their decision making. All hallmarks of a digital approach.

These leaders know that they can benefit hugely from their incumbent business structures with easy access to sometimes undervalued treasures like:

• Access to rich data sets 
• A loyal customer base and customer following 
• Strong brand as an established player in their marketplace
• Access to financial resources  
• Deep relationships across a value chain or wider ecosystem 

In EY we're seeing a new kind of culture and energy emerging with a leadership style informed by new ways of working including:

• Alignment to the core business strategy - with autonomy from the core business units to incubate new models 
• Being open to working in a new ecosystem – seeking and nurturing new ventures continually horizon scanning for new pivot opportunities
• A willingness to make bold moves – leaders who act before they have to and are action focussed

Many of our long standing clients with traditional business models are approaching us about how to optimise their business in the sharing economy. We believe that there is a real opportunity for many incumbents facing disruption by on demand services to empower their digital leaders and really drive digital value. Director of Digital, John Dwane at Electric Ireland , one of Ireland's Leading Utility companies which is part of ESB group, commented:

"Making digital happen in a traditional organisation is as much about change management as it is about digital change. Most large traditional organisations require a burning platform to make change happen quickly...something that threatens its survival or existence. If the case for change is not clear or obvious, it will be very difficult to make change happen.

If the burning platform isn't obvious to your staff, it takes lots of communication. For example, show how similar organisations are changing and highlight the benefits, make small changes first and celebrate success. Demonstrating success builds confidence and momentum in trying new things. This attracts more supporters and builds curiosity with detractors."

... you know you are getting there when others make the case for digital change...not you! Then it's time to move on and out of the way. 

It's an exciting time for traditional businesses as they rise to the challenge alongside pure play disruptors such as Uber and Airbnb. Digital leaders are emerging from both business models driving new norms in organisational culture. 

If you would like to explore Digital Leadership or Digital Strategy with us, please contact:

• Margarete McGrath @margaretemcgrat
• Rebecca Kemp @rebeccakemp