Is every business, even in the B2B world, competing with Google and Amazon? Does digital transformation demand new kinds of leadership and employee development strategies?
These are among the questions answered in a sneak preview of the Leaders 2020 study from SAP SuccessFactors and Oxford Economics. Karie Willyerd, Digital Futurist at SAP SuccessFactors, shared the initial findings of this important research during a session at the recent SAPPHIRE NOW + ASUG Conference entitled “Explore New Leadership Trends for the Digital Economy.”
“To be considered a digital leader, we decided respondents had to agree or strongly agree that technology informs company operations, management is technologically literate, there was a focus on employee skills development to make the digital transition, decisions are data-driven in real-time, and complexity and bureaucracy are reduced,” said Willyerd.
The survey results – just in from over 4,000 employees and executives in 21 countries – verified many expectations. “We thought digital leaders would have more mature human capital strategies, more satisfied employees willing to go above and beyond for the company, and stronger revenue and profit growth. All of our assumptions were validated,” said Willyerd.
Millennial differences, high-growth outcomes, satisfied employees
Among the study’s notable initial findings was that a much higher percentage of millennial executives think management skills require drastic improvement compared to non-millennial executives. The results also showed direct links between high-growth performance, employee collaboration, and digital leadership. Leaders in digital transformation were 38 percent more likely to report strong financial performance, roughly one and a half times more effective at collaboration, and had 38 percent higher employee satisfaction rates. However, only 16 percent of surveyed companies of all sizes qualified as digital transformation leaders.
“People are just beginning on this journey,” said Willyerd. “Companies say some of the biggest challenges they have are that their leaders aren’t prepared to make the digital transformation. There’s a lot of data out there, but how do you take data to insights, and insights to decisions? Respondents at the majority of organizations say that they aren’t ready for constant change.”
A more diverse future
Digitally leading companies of all sizes reported more diversity across the organization except at the Board level, with marked opinion differences between genders and age levels.
“While women had different opinions than men on the progress of diversity in the workplace, millennial executives were much tougher on whether we’re making progress there,” said Willyerd. “They are quite critical of HR practices. They look ready to make a significant change in the organization.”
Smaller companies at the data-driven forefront
In an unexpected finding, the study found small and mid-size enterprises (SMEs) made more data-driven decisions than larger ones. “We thought smaller companies would not be as data-driven as bigger ones but that was not the case,” said Willyerd. “Small and mid-size companies indicated the greatest concern with increasing efficiencies and cost reductions, whereas the big companies were more concerned with innovation. SMEs also said that they were less diverse.”
Every company is B2C
The digital era is just beginning for companies of every size. But transformation is already paying off with high-performance results for executives who have realized investing in people is an essential ingredient for digital transformation leadership. Willyerd views this as a sea change where every company reflects the business-to-consumer model. “We’re all competing in business models with companies that can be like Google and Amazon, giving you that customer-level experience instantaneously,” she said.
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Images via SAP