What it takes to be a leader in the digital economy
by: DOUGLAS A. READY, CAROL COHEN, DAVID KIRON, AND BENJAMIN PRING
The 2020 Future of Leadership Global Executive Study and Research Report finds that leaders may be holding on to behaviors that might have worked once but now stymie the talents of their employees. Organizations must empower leaders to change their ways of working to succeed in a new digital economy.
Executives around the world are out of touch with what it will take to win, and to lead, in the digital economy. Digitalization, upstart competitors, the need for breakneck speed and agility, and an increasingly diverse and demanding workforce require more from leaders than what most can offer.
Although a significant segment of the current generation of leaders might be out of touch, they still have control — over strategic decisions, who gets hired and promoted, and the culture of their organizations — but not for long. The need for change is urgent, and time is running out for leaders who are holding on to old ways of working and leading.
Evidence of this growing mismatch between how many organizations are currently led and how they should be led comes through loud and clear in this new, exciting report, “The New Leadership Playbook for the Digital Age: Reimagining What It Takes to Lead.” This global executive study and research report’s objective is straightforward: to explore how the changing nature of competition, work, and society is influencing the future of leadership. We surveyed 4,394 global leaders from more than 120 countries, conducted 27 executive interviews, and facilitated focus-group exchanges with next-gen emerging leaders worldwide. The findings are as sobering as they are inspiring. They serve as a warning for today’s leaders — as well as an invitation to reimagine leadership for the new economy. Today’s trailblazing leaders increasingly recognize that in order to credibly transform their organizations, they must credibly transform themselves and their teams.
Some brief highlights of this evidence that concerned us include the following:
- Just 12% of respondents strongly agree that their leaders have the right mindsets to lead them forward.
- Only 40% agree that their companies are building robust leadership pipelines to tackle the demands of the digital economy.
- Only 48% agree that their organizations are prepared to compete in digitally driven markets and economies.
- While 82% believe that leaders in the new economy will need to be digitally savvy, less than 10% of respondents strongly agree that their organizations have leaders with the right skills to thrive in the digital economy.
As we dug deeper into the survey data and interviews, it became clear that, in addition to a deficit of digital savviness, some cultural and behavioral leadership norms that worked well in the past are no longer effective. Worse, navigating the gap between past and present has created intractable tensions, undermining execution and leaving many organizations stuck in a state of cultural inertia. This explains why so many companies are slow, unresponsive, stodgily siloed, densely hierarchical, and excessively focused on short-term returns. Finally, we found that many organizations are suffering from a series of blind spots and are holding on to leadership behaviors — such as command and control — that might have worked in the past but now stymie the talents of employees throughout their organizations.
On the bright side, we identified a number of leadership teams that are embracing new ways of working and leading. For example, many of them are increasing transparency, demonstrating authenticity, and emphasizing collaboration and empathy. What’s more, we found powerful correlations between those companies that are actively engaged in digital transformation and their readiness to lead more effectively in the new economy. However, given what appears to be a state of continuous disruption, we also discovered something both heartening and validating: Certain leadership behaviors and attributes — honesty, integrity, inspiration, and trust — have withstood the test of time, regardless of the respondent’s country, age, cultural context, or industry.
While identifying mission-critical leadership behaviors is important, it is insufficient as a means of reimagining leadership for the digital economy. In fact, we believe that is the easy part of the challenge. Great leadership teams pay attention to cultivating not only the leader competencies and skill sets needed to lead, but also the mindsets required to build authentic and passionate communities of leaders. These teams don’t simply rearrange the relationship between leaders and followers; they unleash the talents of every person to cultivate communities of leaders.
On the basis of our analysis of global survey results and a sentiment analysis of our interviews, we identified four distinct yet interrelated mindsets that together constitute the new hallmarks of leadership in the digital economy: producers, investors, connectors, and explorers. The narrative thread connecting these mindsets is that they intentionally align efforts to bring out the best in colleagues and collaborators while measurably enhancing outcomes for customers, communities, our planet, and shareholders. In this report, we use case examples and executive interviews to show how commitments to these new mindsets pave the way for new leadership behaviors to take hold.
Leadership teams that are charting a new course are reimagining what leadership should look, feel, and be like in this new and incredibly exciting world of work. They state unequivocally through powerful narratives who they are, what they stand for, and how they operate, and they are clear about the cultures and mindsets they aspire to create in their organizations by role-modeling those behaviors.
This report is action-oriented. Readers can use our practicable findings and specific recommendations to develop a new generation of leaders excited and well equipped to lead in the digital economy.
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