The short answer to this question is: vastly different to the one of 10- and even five years ago. While there will always be a set of core skills required by any leader, to be a successful leader in the digital age demands a new suite of capabilities.
Future leadership will not just be about digital transformation, but many leaders must confront the challenges it throws up if they are to make their organisations fit for the 21st century. This means leaders must understand the deep impact digital technologies such as artificial intelligence (AI), machine learning, robotics and automation will have on their businesses today, tomorrow and far into the future.
A digital mindset, therefore, is a vital part of a future leader’s make-up. This doesn’t mean becoming a techie but knowing how to apply digital technologies to optimise business performance, create new business models and opportunities as well as disrupt markets and competitors. Leaders must also understand the importance of data and data-driven decision-making if their organisations are to make the necessary shift to a modern-thinking one.
In addition, digital brings with it a raft of other demands in terms of capabilities: the speed at which it impacts means leaders have to be agile and adaptable; the scope it offers requires leaders to be innovation champions and at times risk-takers to permit experimentation; and the scale of transformation means they must be able to communicate and manage change effectively. Those at the head of organisations also need to be able to think and act strategically to ensure they maintain competitive edge. Leaders must also be much more attuned to their customers and familiar with the customer journey than ever before. If they fail to connect with the customer, they run the risk of missing business opportunities and losing out to competitors.
Another important difference is that they must do all of these things on an ongoing basis rather than as a one-off intervention, hence the importance of agility. We are only at the start of the Fourth Industrial Revolution so new technologies and business models are a long way from bedding in. Experimentation and change are part of daily life and leaders must ensure the culture of the organisation can support this.
Resilience is another key leadership attribute in order to handle the demands being made by others and remain unfazed. For instance, a study by KPMG found that the majority of CEOs in the UK are frustrated by short-termism and the pressure from their boards to deliver results on multi-year digital transformation projects. Three quarters (72 per cent) cite unreasonable expectations for return on investment related to digital transformation.
So how well equipped are those who will be filling senior leadership positions in the coming years? A study conducted by Rialto Consultancy revealed that many leaders lack the necessary skills and capabilities to move their organisations forward in an increasingly disruptive marketplace. The Supercharge your leadership skills for the future report found that one quarter of leaders don’t feel sufficiently confident in their skills as a future leader and, worryingly, only 16 per cent ranked a digital transformation mindset as one of the three most important skills required by future leaders.
The lack of focus on digital is highlighted in other surveys, too. The 2018 global CIO survey released by Deloitte found that 44 per cent of responding CIOs are neither actively involved in developing nor executing their organisation’s digital strategy, even though digital strategy is an increasingly critical part of business strategy as a whole. Two-thirds of CIOs surveyed indicated that they did not have leadership roles in developing enterprise digital strategy.
Indeed, many leaders are still making the mistake of mentally and physically outsourcing digital transformation by passing responsibility for it to a chief innovation or digital officer. Worse still, in some organisations it is being siloed with IT. Neither is acceptable because the process is as much, if not more, about business transformation than technology.
Whether you label it transformational leadership, digital leadership or modern leadership, those individuals moving into the most senior positions must go beyond the label and truly understand what it means to be a leader in the 21st century.
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