In the digital economy, the imperative to change along with continuous innovation, rapid decision-making, and continuous changes in a global marketplace is setting new expectations for both organizations and individual leaders. However, those who get it right are seeing very clear benefits.
Together with Oxford Economics, we recently conducted a large-scale study of 4,100 executives and employees across 21 countries to identify the characteristics of the companies and individual winners of the digital economy. Who are the leaders? What does it take to be a leader of the future? What do you need to do to become a winning organization and an individual digital leader?
What do you need to do to become a winning organization and an individual digital leader?
Organizational Success Requires Execution, Not Just Buzzwords—But It Pays Off
From an organizational perspective, the data showed that the leading organizations (we call them digital winners) share four key characteristics. All do the following:
- Embrace digital technologies: These companies execute on a company-wide digital vision and embed technology across all aspects and levels of the organization
- Streamline decision making: Leading companies have a significantly larger focus on real-time data-driven decisions as well as on organizationally distributed decision-making.
- Flatten the organization: A focused effort is put into reducing complexity and bureaucracy across the organization while the latest technology is made available to all employees.
- Build a digital workforce: A key part of being a digital winning organization is the ability to improve digital proficiency, not only for the executive level but across the organization, which in turn enables a more strategic usage of new technologies and an overall organizational transformation readiness.
While the above characteristics are not by themselves novel when it comes to business transformation strategies, the fact is, only 16% of our surveyed companies fall in the category of digital winners, which means that 86% of companies are not prioritizing or executing on these characteristics. And they are failing to do so at their own peril.
The digital winners are in fact 38% more likely to report strong revenue and profit growth (76% vs. 55%), have much more satisfied employees (87% vs. 63%), and enjoy a much more loyal employee base (75% vs. 54%).
Digital winners are 38% more likely to report strong revenue, profit growth and have much more satisfied employees
Similarly, these companies reported more mature strategies and programs for hiring skilled talent, building diversity, and enabling succession planning, all of which add to their bottom-line results and overall employee satisfaction.
Individual Leadership Sets the Stage for Organizational Success
On the individual level, the research points to a number of traits that successful executives should pay close attention in order to successfully lead winning organizations of the future.
- Empower your employees: Leadership is not about control, but increasingly, allowing and empowering people across hierarchical levels to make tough decisions without running every call through the entire chain of command. Considering the increasing need for real-time decision-making, now is the time to move beyond old-school decision-making and start leading for the future.
- Listen to the next generation: The millennial generation is skeptical that mid-level and senior managers have what it takes to drive needed digital transformation. Building employee satisfaction, productivity, and skills starts at the individual managemnent level, and in most companies the younger generation does not necessarily see eye-to-eye with their older colleagues on how to stay competitive in the years to come.
- Invest in your workforce: Employees working for digital winners are more likely to be loyal to their organization, team, and manager. From a managerial perspective, this is critical as these employees are also more likely to say that their specific manager is critical to engagement. This has a direct bottom-line impact as the research shows that a great majority of very satisfied employees routinely go beyond the minimum requirements of their jobs.
- Lead in diversity: While diversity can certainly be considered an organizational issue, it starts in the individual teams, and individual executives are key to making it happen to the benefit of the larger organization. While there are still massive steps to take for most teams and organizations, especially at the senior level, our data shows that diversity can have a positive impact on culture, financial performance, and loyalty as a core value, especially to the younger generation.
The organizational digital winners and next-generation executive leaders are not just changing with the digital economy, but how we perceive the future of work and the future of leadership.
So how are you changing your approach to leadership?
To read more about the Leaders 2020 study, click here.
Related image (diversity and inclusion) via Shutterstock