Leading through Digital Disruption
  • Leadership

Leading through Digital Disruption

4 competencies for effective leadership in an environment of digital transformation


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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 – addressed effectively – disruption can bring enormous positive benefits. But only with effective leadership and this raises the question: what are the attributes needed for leaders to thrive in digitally disrupted environments?

New research from IMD’s Global Center for Digital Transformation and metaBeratung points to four leadership competencies that are vital for business leaders facing large-scale digital disruption.

In this extract from a recent article Michael Wade IMD Professor of Innovation and Strategy and Cisco Chair in Digital Business Transformation describes these four must have competencies.

First, successful digital leaders tend to show humility and a willingness to seek diverse inputs – both from within their organizations and from outside. In today’s world of near-ubiquitous Internet and social media availability, 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 such teams can substitute for a lack of expertise at the executive level – provided they are willing to cede ground to staff. Leaders must be comfortable not knowing the answer, and be willing to admit it. As one UK CEO succinctly put it, “Hire people who are the experts. Trust in them.”

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. As one leader put it, “You have to be sure that you are able to correct wrong decisions or weak decisions. You have to be able to say: ‘Okay, yesterday, I said left and today, based on this, we are going right.’ It has to 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 organizations, shrinking divides and erasing traditional boundaries between territories. Dealing with fast changing cultural and business impacts requires adaptability. 

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 which 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 rudderless change. General Electric CEO Jeff Immelt has set out a very clear vision for the 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.

The final competency is to successfully engage 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 and 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. 

Read the full research report Redefining Leadership or a Digital Age.

IMD is a top-ranked business school, expert in developing leaders, transforming organizations and creating immediate and long-term positive impact.

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