Developing Leaders for the Digital Era

As digital disruption upends traditional business models, many companies are revamping their leadership programs to produce a new breed of leaders.

What defines a great corporate leader? It seems a simple enough question, but the answer has changed in recent years as digital technologies have transformed business. Many organisations and C-level executives that once adhered to a command-and-control style of management are finding the digital age demands a more collaborative and agile approach to leadership.

To remain competitive, many organisations are seeking digital leaders who have interdisciplinary skills, with an understanding of different business functions, industries, and technologies. These leaders can drive a culture of learning and continual improvement, and are comfortable managing teams that increasingly include contract and part-time workers. Perhaps most important, digital leaders typically embrace innovation and risk-taking. Yet despite the clear need for such talent, most organisations haven’t moved rapidly enough to cultivate leaders who fit the bill. Today, only 5 percent of companies believe they have strong digital leaders in place, according to Deloitte’s 2017 Global Human Capital Trends survey. In a sign of positive change, however, 72 percent of survey respondents are developing or starting to develop new leadership programs focused on digital management.

Fostering these digital leaders is important for any business, but it is particularly critical for organisations undergoing business and IT transformation. Revamping legacy systems and truly focusing on the customer likely requires organisations to link not only technology and insights but also people—inspiring and rewiring culture and talent across the organisation to establish new ways of thinking, collaborating, and connecting. Digital Leaders Defined

Digital leaders typically think, act, and react differently than traditional leaders. There appear to be four primary types, and most organisations will be most effective with some combination of the four: • Digital investors. These are senior executives who embrace the venture capital mindset, uncover opportunities, invest in talent and ideas, forge partnerships, and build an ecosystem that enables innovation. For digital investors, a principal task is educating others, including other senior leaders and the board, about the implications of digital technologies. Digital pioneers. These are business and function leaders who can reimagine the future, shape new and different business models, and lead a winning digital strategy. Digital pioneers set the vision for the company, create the road map for the next two to three years, drive the adoption of new digital capabilities, and set the pace of change. Digital transformers. These are leaders who manage the organisation and its people through radical change. Digital transformers determine how to • • • Developing Digital Leaders

To identify and support these types of leaders, CIOs and their C-suite counterparts can work together to: • Rethink the organisation’s leadership model, with a focus on innovation, growth, inclusion, and collaboration. Identify potential digital leaders in the organisation—investors, pioneers, transformers, and enablers—and train them. Ensure accountability by identifying the person or group responsible to the Csuite and board for building leaders as part of the business strategy. • • carry on day-to-day business activities while moving the digital agenda forward. Digital enablers. These are leaders who bring and build critical technical capabilities—such as analytics, application design and development, cognitive computing, and data science—to take digital initiatives from the drawing board to the marketplace. They are also critical to boosting the confidence of the analogue workforce, helping those employees tackle digital challenges. • • Promote younger people into leadership more quickly, giving them opportunities to learn on the job. (Also consider tapping these individuals as reverse mentors to help senior executives learn about technology, work practices, and the culture of younger employees.) Foster risk-taking and experimentation by creating programs that focus on new product and service innovations and encouraging participants to experiment as they gain new skills.

As organisations pursue digital transformation, they likely will find that their leaders need different strengths and skills than in the past. To develop a new breed of leaders—people who are agile, innovative, and collaborative—organisations can rethink their leadership development programs. By empowering potential leaders to think, act, and react differently, companies can position themselves for competitive advantage, regardless of what changes the coming years bring. For more information, please visit www.deloitte.com/mt/hct