In industries from banking to retail, media, logistics, manufacturing, education, professional services and life sciences, leaders are struggling to face up to new disruptive, technology-driven business models.
Although the word ‘disruption’ has negative connotations, in the context of digital transformation, if addressed effectively, disruption can bring enormous positive benefits. But this can only happen with strong leadership, and this raises the question of which attributes are needed for leaders to thrive in such digitally disrupted environments.
New research from IMD’s Global Center for Digital Business Transformation points to four leadership competencies that are vital for business leaders facing large-scale digital disruption.
Michael Wade, IMD Professor of Innovation and Strategy and Cisco Chair in Digital Business Transformation, has described these four must-have competencies.
1) Successful digital leaders tend to show humility and a willingness to seek diverse inputs – both from within their organisations and from outside. In today’s world of near ubiquitous
internet and social media engagement, employees have equal access to information within a business and may, in fact, have deeper specific subject knowledge than those leading them.
Encouraging and developing these employees can substitute for a lack of expertise at the executive level – provided executives are willing to cede ground to staff. Leaders must be comfortable not knowing the answer and be willing to admit that they don’t. As one UK CEO succinctly put it, ‘Hire people who are the experts. Trust in them.’
2) While humility allows leaders to be open to new ideas and innovations, being adaptable is critical in a complex and changing environment. Without it, the capacity to respond to digital disruption is severely restricted. A humble and adaptable leader is willing to change his or her mind and then communicate that newly minted adaptation to employees and peers. One leader summed this up, saying, ‘You have to be sure that you are able to correct wrong decisions or weak decisions. You have to be able to say, “OK, yesterday I said left, and today, based on this, we are going right.” It must not be a weakness for you. It is a necessity of the environment of today.’
The global reach of digital technologies has opened up new frontiers for organisations, shrinking divides and erasing traditional boundaries between territories. Dealing with fast-changing cultural and business impacts requires adaptability.
3) For any leader, having a clear vision and articulating it well is a core competency – but in times of rapid technology and business-model change, with opportunities cropping up on all
sides, it becomes critical. The sheer unpredictability of business today means traditional analytical approaches are failing to provide the long-term definitive strategies that leaders have relied on in the past. In times of rapid change people need to be inspired by a strong vision. Adaptability without vision can lead to lack of direction. General Electric CEO Jeff Immelt has, in a number of recent press reports, set out a very clear vision for that company to become the leading global player in the industrial internet, even though there is no precisely defined roadmap in place for how to get there.
4) The final competency is to engage successfully with customers, partners, suppliers, employees and the broader ecosystem. At their core, digital leaders are listeners with a broad-based desire to explore, discover, learn and discuss with others. They listen to their clients and customers, their teams, their staff and their peers and partners with humility and a willingness to change their minds. They ensure a constant interchange of information and encourage employees to challenge views and opinions, and they set and adjust corporate visions based on these exchanges.
This article was originally published by IEDP Developing Leaders and featured in Issue Four of the Curve https://www.iedp.com/
Find all Issues of The Curve here https://www.lumesselearning.com/insights/the-curve/