Digital leadership
Introduction
It is observed that in the digital world, there are broadly two types of leadership style in CEOs. On the one hand is the well-established market player, who prefers to invest only in a sound business case and focuses only on the predictability of cash flows. He/she does not prefer speed and innovation. On the other hand is the digital-era market disrupter or the brash upstart, who believes in innovation and speed and tries to score a win while managing risk by failing fast and starting a fresh. While many CEOs and CIOs understand and accept that a shift in business strategy is necessary to adapt to the changing world , but what they may fail is to realize is that how important their own mindset is to the success of the transition to the new business model. While the digital world is moving forward at a break neck speed, the core beliefs wired into the human brains often are not.
The leader's mindset provides a frame of reference that affects how they hear, interpret and act on information, which in turn affects how the company operates. Successful disruptive digital leaders are able to transform their own thinking first and then transform the company. Five important mindset traits can help you differentiate between well-established digital leaders against that of a successful disruptive digital leader.
Grow despite uncertainty
While a well-established marketplace player might be frozen or slow to respond in the face of the uncertainty of the digital era, a disruptive digital leader understands and embraces the idea that uncertainty is inevitable and also required. Instead of expending energy trying to change that, these leaders explore what is technologically possible, how changes will disrupt the markets, and the risk-reward trade offs. However, embracing uncertainty alone does not mean throwing caution to the wind as far as sound decisions of fiscal accountability are concerned. It means establishing a plan that allows for change and gradual evolution, and does not create a fallacy of fake predictability.
Focus on ideas that jump into the future
Traditional incremental thinking usually runs the risk of irrelevance in the digital world hence leaders should focus on ideas that jump into the future. Digital leaders are visionary when it comes to the technology frontier, but all decisions are still rooted in the end goal or mission. This demands a risk-tolerant mindset as future technologies are volatile and may run the risk of getting delayed or fail completely. But a true digital leader is driven by the challenge and potential for creating new business value by harnessing new technology.
Digital tools
In this new era of technology , it is quite easy to get distracted by “glamorous” new tech tools just made for technology's sake. Digital leaders have to look beyond these distractions, seeking to master the digital-era tools. The goal should be to become a pioneer and sustain a long-term investment to secure a leadership position in emerging areas such as platform-based business model economics OR turning data into customer value via algorithmic business tools.
Select a tool and focus on making it a core competency of the company.
Start, test, learn, repeat
The difference between a digital leader and the followers is that the leader's mindset is to seize the opportunity and that stalling it would mean that another company would have already seized the opportunity while the followers prefer to wait till the time the tech enabled breakthroughs are proven. Digital leaders understand that well-grounded strategic bets based on expected business outcomes and digital tools need to be the focus of the company. These CEOs will take a Start-Test-Learn-Repeat approach as a pathway to a breakthrough solution Instead of waiting for total clarity before proceeding, in certain cases such as lean startups, minimum viable product and data-evidence-based experimentation, companies can use “test” as a path to creating new value while mitigating downside risk.
Invent rapidly
The digital era is always characterized by disruption hence companies must be able to invent more rapidly than competitors. To encourage innovation at a high speed, digital leaders must establish a culture of genuine creativity. They must visibly implement this belief at every level from new hires to the board room and actively create a culture that encourages risk taking and new discovery. Companies that are risk-averse will obviously be too slow to innovate, as employee thinking and actions remain bogged down in traditional industry rules. On the other side, companies that encourage speed and occasionally encourage failure are much more equipped to succeed in the digital world.
Conclusion
Successful digital leaders know that hiring high quality and committed talented employees is the key ingredient for market success. They understand that those with engineering , management and data skill sets will become some of the most prized assets in the digital era. Top-notch talent may be motivated by something other than just financial rewards, and digital leaders are smart at creating a compelling sense of purpose to attract and reward talent. Certain companies allow key talent to work on preferred projects, and might even let them select their own manager. Talented and committed employees also benefit from working at a company that understands the digital world and allows the m operational freedom to succeed in it.
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