One reason many executives, myself included, embrace leadership today is because of the changes to the workplace and the workforce brought on by digitalization and the need for business to rapidly transform.
As exciting as that can be, it’s not without challenges. Greatest among these is the need to manage change, not necessarily a favorite task for most. What’s really required to address the discomfort of change is a digitally minded and digitally connected leader.
I think we’re still in short supply in this regard, which makes managing rapid change more difficult. To help ourselves and others understand how to address the need for a new era of leadership, we sponsored a new global study by Oxford Economics. And not surprisingly, the study, Leaders 2020, reveals that lack of executive preparedness is a liability for success in the digital economy.
I expect that many of us feel close to acing the journey to transformation, but according to the research, only 16% of companies surveyed actually are prepared to successfully take on transformation.
What does it take to be ahead of the game and become a digital winner?
The Oxford study defined the 16% of companies that have successfully updated leadership skills and organizational processes for the digital economy as today’s digital winners, and their executives, the digital leaders. The importance of being in that small group, which clearly needs to expand, is in the finding that 63% of executives who meet the criteria as digital leaders said their organization was capable of making decisions in real time. Compare that number to the 46% of executives overall who reported that capability.
Why is this so critical? Employees at these companies are happier and less likely to leave their jobs, and financial performance is superior.
If you’re all-in for digital transformation and eyeing the digital winner category, here are four things to consider based on the Oxford research:
Embrace your workforce: Employees at digital winners are 24% more satisfied and 21% more likely to stay in their jobs even when given the chance to leave. Not a huge surprise here – we’ve long seen that managers can make all the difference to employee experiences. People working for digital winners expressed more loyalty to the business, their teams, and their own managers.
Employees are happiest at companies where decisions are made quickly, complexity and bureaucracy are at a minimum, and leadership embraces not just diversity, but inclusion – whether of race, gender, age, ability, or perspective. For me, this is about more than “engagement,” it’s about being all-in, because all-in people work harder to ensure you win.
Listen to millennials: Most of us probably feel we’ve heard everything there is to know about millennials, but the reality is, this group now comprises over 50% of the workforce, and in most organizations, they’re not just present, they’re in the leadership ranks. This group is more likely to report skepticism towards mid-level and senior managers having the skills required to drive digital transformation. Leaders 2020 revealed that millennial executives feel there is a much larger gap in company leadership skills than their non-millennial counterparts, by a factor of between 15 and 23 percentage points. It pays to make sure this generation is heard and seen at the leadership level. Our own teams have the power to make us better leaders when we include them in the conversations.
Create a diversity and inclusion strategy: There’s a lot made about a talent shortage and a skills shortage. These issues are solvable – we must widen the pool. Look beyond the G20. Look beyond the usual universities. Look beyond our often-unintentional biases on who is a good fit in our business. Inclusive teams are more successful.
Adding a broader set of perspectives is a key element to transformation, yet change clearly isn’t happening fast enough at most companies. This research shows that while diversity has increased among the general workforce and mid-management over the past three years, the executive suite looks unchanged since 2013.
Further, over the past three years, executives reported that diversity has increased 34% for board/senior leadership positions – a huge step in the right direction – but it doesn’t reflect the increase of 67% for the general workforce.
Need an incentive? Consider this finding: Companies reporting higher revenue and profitability growth are more likely to say diversity has a positive impact on financial performance, and that leadership recognizes its value. Buy-in from upper management always follows proof of tangible business benefits.
Give digital its due, but keep in mind its role: Technology transforms how we create value, interact with our customers and business partners, and reach new markets. But ultimately, technology should serve to help people be their best. Going digital is not just about technology – it is about creating a culture of innovation, supporting all-in employees and mastering business agility. Digital leaders driving these changes are 38% percent more likely than others to report strong revenue and profit growth.
The world is changing in significant ways. As leaders, we must embrace and encourage change.