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Don’t Forget the “Leadership” in Digital Leadership

by Verity Creedy and Shannon Lawrence

If you think this is just another blog on digital leadership, keep reading, because you may be surprised by our thinking on this extremely hot topic.

Most organizations recognize the need for digital reinvention to secure their future. In fact, it's a necessity, given the impact of technology, globalization, hyper-competition, changing consumer needs, economic and political volatility, and the always-increasing complexity and unpredictability of the world in which we work.

Naturally, this context has many people thinking about the implications for leaders. What will they need to do to be successful? Will it be different from what has led to success in the past? DDI explored these questions and identified some answers in our recently published Global Leadership Forecast 2018.

It strikes the two of us, though, that while the digital context is very current, the need for leaders to adapt to a changing business landscape and find new operating models and ways of generating revenue is not new.

There is always something disrupting the way organizations operate. Within the span of our working lives, we can recall the disruption caused by globalization, the outsourcing of non-core functions and offshoring to low-cost labour markets, the creation of shared service centers to drive standardization, and the implementation of Lean and Six Sigma processes. More recently, Agile methodologies have expanded from the systems development world to other functions.

And now there is digitalization.

What does digital mean for leaders?

Digital is fresh, important to sustainable business growth, and inherently interesting, so it's tempting for those of focused on accelerating leader growth to become obsessed with what it means in our world, to the possible exclusion of other important skills, knowledge areas, and behaviors.

Yes, there will be business implications to not having digital-ready leaders. The Global Leadership Forecast 2018 confirms this, as it shows that digital pioneers outperform digital laggards and that digitally mature organizations have a fundamentally distinct operating culture (see the graphic below).

The digital leadreship performance premium

What is digital leadership?

So, what are we really talking about when we refer to digital leadership? Are we referring to creating and executing digital strategies? Finding business models that leverage emerging technologies? Leading people using digital workforce management tools? Are we referring to engaging and inspiring virtual teams? And, furthermore, what differentiates the digital pioneers from the digital laggards?

Because one of us hails from Generation X and the other is a Millennial, we have both been curious about the answers to these questions, so that we can focus on, acquire, and accelerate the right digital leadership skills to ensure that we don't become digital laggards (and to help the DDI clients we work with answer these questions, too).

DDI research indicates that there are some differentiating capabilities for effective digital-era leadership (see chart below), which provide research-based guidance for updating leadership and talent strategies so that they reflect the current business context. Reassuringly, leaders' personal digital literacy is not as strongly linked to an organization's digital progress as is leading through digitization, underscoring the fact that digital leadership is about much more than just personal technology savvy. While Millennials are slightly more effective than previous generations in digital literacy, they are not significantly better at the competencies that have a greater impact on digital progress.

Key digital-era leadership capabilities

As our clients explore ways to 1) identify whether their leaders have digital-era leadership capabilities and 2) rapidly develop or hire and promote for these capabilities, we strongly believe it is important to maintain focus on, and protect investment in, the enduring aspects of leadership that are critical to transformation of any kind and enable leaders to adapt to the next business disruption.

There are elements of the profile of digital-era leaders that are relevant well beyond the execution of digital strategies and the business models they create. These include data-driven thinking and decision making, hyper-collaboration (working co-operatively with a diverse community to build consensus and take collective action to achieve goals), adaptability, execution, identifying and developing new talent, and intellectual curiosity.

The risks of the missed connection

Let's consider what would happen if leaders don't make the connection between evergreen leadership skills, and the unique digital skills. The risks would include the following:

  1. Leaders lead in isolation. It is of no use for leaders to be digital pioneers or to be placed in critical roles where they are accountable for operationalizing digital strategies if they cannot sell a vision, inspire others, influence stakeholders to allocate resources, and drive the behavior change necessary for effective execution of digital strategies. Having ideas is not enough; a motivated team is also needed to deliver on them.
  2. The digital solution doesn't make money. On the surface, some of the most effective digital initiatives seem simple, but that doesn't mean the inventor did not consider the business plan and revenue steps required to monetize the idea. Having ideas for the expansion of digital business is pointless if the leader does not also have the entrepreneurship and data-driven insights to ensure that the idea will be sustainably profitable.
  3. Retention of colleagues becomes an issue. As members of their team attempt to take risks with digital solutions or struggle to engage with new technology, demonstrating the crucial and classic behaviors of empathy and good coaching to develop talent so they have the right skills for the future is essential to accelerate others through the digital transformation.
  4. Customers are handed over to the competitors. As organizations explore new ways to engage with customers and enhance customer experience, leaders need to be curious about what customers value, have empathy for their perspectives, and be able to adapt to rapidly changing expectations. Failure to do so will cause customers to choose competitors.

Keep your eye on the ball

If we have one important message for organizations creating specific programs for digital leadership, and L&D managers who are asked to reallocate significant portions of their budget to digital-specific development, it's this: Don't take your eye off the ball when it comes to the evergreen leadership skills. Continue to ensure your organization has leaders who can make money in any context and within a constantly changing environment.

One global organization we work with has made the decision to move away from creating a digital leadership program and instead create a program focused on evergreen leadership skills. As the HR director for that company said, "It was agile leadership, now it's digital leadership. And another type of leadership will come before we know it. We think the best thing we can do is focus our development budget on [the] common and critical behaviors, as the best way to future-proof our leaders and mitigate risk to our growth roadmap.”

The right way to develop digital leadership

Having said what not to do, what do we recommend for those being asked to "develop our digital leadership” in order to accelerate the organization's digital journey?

  1. Know how your leaders stack up against the time-tested, evergreen leadership capabilities. Obtain objective data about current skill levels. Provide development opportunities to address the weakest areas. Continue to reward those who exhibit strength in these skills.
  2. Accelerate leadership capability in digital competencies but recognize that development will happen on the job, not in the classroom. Building digital-era leadership capability requires environments where everyone learns every day. Place a heavy emphasis on experiential learning, and having leaders actively manage their own growth and development.
  3. Build the capability of your HR function to drive the digital culture and model the behaviors. HR functions must transform to become nimbler, data-driven, tech-savvy, and better tied to business needs.

In summary, we would advise you to keep a check on your balance between digital and timeless leadership skills and try not to fall into the trap of designing your talent strategies against passing fads.

To the organizations creating uniquely digital leadership strategies, be warned: By the time you have them in place, it might be too late. The world may have moved on, and you will have failed to prepare your leaders for the next big thing because you've neglected those leadership skills that will always matter.

Learn how DDI can help you transform your leaders to transform your business.

Verity Creedy heads up DDI's European sales team and is based in London. When she's not working with clients to identify talent solutions that address their business strategic aims, Verity can be found reading endless Bizzy Bear books with her young daughter, window-shopping at unusual shoe stores, and finding new ways to raise money for Cancer Research UK. If you have any Bizzy Bear favorites, shoe store recommendations, or fundraising ideas, please send them to verity.creedy@ddiworld.com

Shannon Lawrence leads DDI's European consulting team and is an Aussie living in London. When she is not engaging with clients or her team, she is likely building with Legos with her two young boys, doing her homework for the Business Coaching qualification she is currently undertaking, experimenting with technology to avoid becoming a digital dinosaur, or exploring Europe with her family. If you have any recommendations for places in Europe where Shannon can get a great coffee and experience the culture of that country (while keeping kids engaged, of course) please send them to shannon.lawrence@ddiworld.com

Posted: 07 Mar, 2018,
Talk to an Expert: Don’t Forget the “Leadership” in Digital Leadership
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