The defining traits of a successful leader used to be a high performance on execution, strategic and business acumen and becoming successful P&L owner working towards increasing the bottom line. Then there was a realization that leaders also need to be emotionally intelligent, self-aware, build healthy innovative teams through trust and conflict management to achieve all of the above. There is an expectation of conscious capitalism from them, i.e improving communities along with building businesses. This movement will continue on rapidly.
In addition to this, now, there is expectation of excellence in another dimension from successful future leaders: digital leadership What is the definition of digital in this context? Digital means reorganizing the business ecosystem. Digital is more than just technology. Digital refers to the ways in which technology is now being used to create value across functions.
The key future emphasis areas of digital to name a few are:
- Big Data, Internet of Things (IoT), Cloud, All kinds of Social Media
- Artificial Intelligence, Machine Learning & Robotics
- Blockchain &Cryptocurrency (Bitcoin)
According to Professor Venkat Venkataram the author of “The Digital Matrix”, The digital leader will have to have a deeper understanding of the digital age, its disruptive technology trends, and their impact on organizational culture.
Mind you, this will be in addition to previous definitions of old-school leadership that have been talked about in the last three decades. A new kind of leadership is the need of the hour.
Digital leaders will be in high demand as business increasingly relies on digital technologies. These leaders will have to be savvy with technology, data-driven and inspire teams to drive transformation and business outcomes through experimentation and multiple iterations. They will need to incorporate data, agility and design-thinking aggressively to redefine strategies and business models.
Among all executive functional roles, the chief financial officer is considered to be the best role to be groomed for the C.E.O. level. They are the best people to have a good understanding of every function in the organization from a numbers perspective. However, technology can be a deterrent for them. No matter which function you evolved from to reach the executive level team, you will need to be open to having a broader view of technology in the context of your vertical. The skills and perspectives of the digital leader will now be valuable in every vertical for every industry including operations, human resources, product development and marketing.
The five main areas which need attention to become successful digital leaders are:
1.Having a digital transformation strategy
An alternative approach to designing strategies for driving business success in the new digital economy is needed. New age digital-driven start-ups are creating and attacking new markets in every sector. However, most legacy businesses continue to operate by old playbooks. Organizations have to keep pace with the changes in their industry. It is critical to learn how to navigate the world of digital ecosystems.
Awareness and a deeper understanding is now required of the clash between traditional and digital business models and reinventing your business for future success. Newer business models are evolving even within well-established successful companies; those which have enjoyed a tried and tested successful model in the past
Companies will now have to both compete and collaborate with other companies to create and capture value.
2. Exploring a platform strategy for your business
This capability needs learning to design, launch, monetize and compete in a networked platform market.
So, what is a platform ecosystem?
Companies that operate as platform ecosystems are Uber, Amazon, Flipkart, Alibaba and Facebook to name a few. They connect buyers and sellers, grow market share from collective network effects and leverage the strength of their users to innovate.
The economy is shifting towards platform ecosystems. Platform ecosystem firms are fundamentally different from product firms. Leaders will need to evaluate if a platform model will make sense for their business. From this lens they will have to re-evaluate factors like information, asymmetry pricing and intellectual property.
Leaders now must look at converting products to platforms and harness platform innovation. They will have to learn to convert existing businesses smartly without negatively impacting the current revenue streams, and make vital decisions on issues of openness, cannibalization, and competition.
Other questions to answer will be:
- Why is pricing different in platform markets and how will the price be determined?
- How do you choose what to give away and what to keep in this freemium economy?
- Why product strategies fail for platforms and how to compete in a network market?
3. Business analytics for data-driven decision making
What this means is to lead your company to make better business decisions using analytic methods and create competitive advantages from data. Virtually all managerial and leadership positions in the digital economy increasingly rely on data-driven decision making. This approach to business governance termed data-driven decision management (DDDM) values decision making backed with hard verifiable data. The success of the data-driven approach depends upon the quality of the data gathered and how well it is analyzed and interpreted.
Having good comprehension of the entire process of making effective decisions with data gives you an edge, both in performing such analysis yourself, and in effectively managing teams which will now include business analysts and data scientists, even if it did not in the past.
You need to become a data-driven or “evidence-based” manager. Becoming an evidence-based manager requires:
- Knowing the process of reframing a business question as a data question
- Reasoning what data might be of assistance
- How to obtain the data
- Integrating and cleaning the data
- Performing the analysis
- Deriving and communicating insights from the analysis
- Building the managerial culture to operate in this way
- Create competitive advantages from enterprise data.
4. Design thinking and agile methodology
Business value will be derived from repeated iteration leveraging feedback from all stakeholders, continuous learning and modern infrastructure. It will become even more important to create a culture of experimentation where data is swiftly gathered to assess the business value and drive innovation. Agile methodology and design thinking are already being practiced and implemented all over the world. It will now need to be learned and understood at all levels in the organization independent of function and role starting with the executive level leaders.
Good design enables a capability for experimentation that would otherwise be infeasible as it speeds up learning and decreases the development time needed to realize the necessary technical changes to drive the next experiment. This capability produces an increase in optionality and paths for innovation; and so overall increases business value.
Going forward, the synthesis of design, management and experimentation will create real business value.
5. Personal leadership in the digital age
Continuing to develop capabilities required to lead, innovate, co-create and build relationships dynamically in this fast-moving digital age is mandatory. Relying on intuition is not going to go away. That is still the ultimate compass of decision making for leaders.
The five personal capabilities needed for success in the digital age are:
1. Leading without boundaries: Leading beyond the perceived role of the leader’s team, organization, geography, and formal authority, enabled by new age tools to provide innovative solutions to customers and other stakeholders.
2. Collaborating and co-creating the future with customers and other stakeholders: Multi-organizational value networks formed from a range of relationships with different stakeholders are substituting traditional value chains. Leading in this new business model requires a “we both win” mindset.
3. Trust for building relationships: In the present environment with the need for innovation and collaboration, trust replaces formal authority as the basis for leadership and will continue to do so for Digital Leaders.
4. Working efficiently with virtual teams: The digital age relentlessly shrinks time, space and location. If managed, virtual teams turn this challenge into an advantage over traditional teams.
5. Learning all the time: The capability to learn, adapt, implement in every area required as you grow is the critical competitive advantage.
Leaders in the digital age have to be even more dynamic and agile while continuing to be peak performers with authenticity.
The views expressed in this article are not those of Fortune India
The author is the founder and CEO of Talent Power Partners a global Leadership Development company based in Bangalore. She is a Leadership Development Specialist, an ICF Certified Executive Coach [PCC] and author of the book Team Decision Making.