The world’s largest and most valuable personal taxi company owns no vehicles, the world’s largest lodging provider owns no property, the world’s largest communication companies own no infrastructure and the world’s largest retailer owns no inventory. Whether we’re talking about Uber, Airbnb, Skype or Alibaba, the pervasiveness of digital disruption is undeniable. People and talent leaders in today’s digital economy are facing an incredible challenge – leveraging the unique benefits of a multigenerational workforce with wide-ranging digital skills and comfort, while at the same time managing a rapidity of change never before seen in global commerce.
Overcoming this challenge and creating opportunity is dependent on a few foundational tenets. First, we need to recognize digital skill disruption is already upon us. Second, we have to understand that developing digital leadership isn’t a traditional managerial development exercise but an existential business strategy. The data are clear: lasting change starts with leaders and lasting digital transformation is no different. Finally, we have to take action immediately…right now. If not, we’ll find our businesses in the position of Checker Cab, Blockbuster or our legacy brick and mortar retailers.
More Disruption Please
By 2028, Deloitte estimatesthere will be 2.4 million manufacturing positions unfilled due to lack of available skills, potentially costing the U.S. economy $2.5 trillion in manufacturing GDP. Unfortunately, this digital skills disruption isn’t isolated to pockets of the economy prevalent here in Michigan – the challenges are widespread. According to a 2016 McKinsey Study, by 2020 nearly a third of overall industry revenues will come from new business models, models that do not exist today. To compound the challenge, we as people leaders working to build a change-agile workforce are running on a treadmill that continues to increase in speed.
The pace of change and disruptive transformation isn’t slowing down. Increasing adoption of technology like production automation, artificial intelligence and predictive analytic platforms will widen the already expansive gapbetween in-demand skills and the supply of skills capable of addressing need. It is easy to ask ourselves why developing future-proof digital leadership is so important when there are so many things competing for our attention in the here and now. The answer is simple: results speak for themselves and our competition isn’t waiting for us to decide next steps.
Money Talks and Markets Don’t Wait…Neither Does Competition
Digital transformation isn’t about evolution for the sake of technology or external image. Developing and executing a digital leadership strategy is about business results. Companies that take a proactive, planned approach to digital transformation are up to 26% more profitable than their competitors and enjoy up to a 12% higher market valuation. If increased profitability and valuation aren’t enough, recognizing the choice has already been made for us is a powerful motivator for immediate action.
By 2020, the World Economic Forumpredicts more than one-third of mission critical skill sets will be comprised of skills not currently in high demand or even non-existent today. The skills gap isn’t coming; it is already here and it is getting worse. Moreover, market realities aren’t the only external catalyst for making digital leadership development a priority. Chances are our competitors are already taking action.
Fujitsu’s 2017 Digital Transformationsurvey indicated nearly 90% of business leaders are planning or executing digital transformation strategies. Over a third (34%) of those same respondents suggested they had already realized positive results. In seemingly paradoxical fashion, our research foundnearly nine out of ten HR managers do not have the leadership talent needed to drive the rapid, sustained change required to remain competitive in the current digital landscape. Despite significant action and widespread awareness of need, quality execution and undeniable results remain elusive. There is still time for us to catch up or widen the lead between us and our competition; however, that window is closing quickly. How do we take advantage of the time bound opportunity to lead a talent-focused digital transformation? Start with our leaders.
Digital Transformation Requires Digital Leaders
In many cases, middle management is as important as senior managementin driving change. Without the tactical support of leaders managing critical business functions on a daily basis, even the best laid plans developed in the boardroom fall short of delivering optimal results. The key to converting digital disruption challenges into true business opportunities is developing digital leadership capabilities up, down and across the organizational hierarchy.
While nearly 90% of HR leaders indicate they do not have the digital leadership skills needed to lead in the future, the reality is we aren’t as far away as we may think. Developing leadership in the digital era isn’t a total rebuild. In fact, our research suggests 80% of the inherent enables we consider critical to leadership today – drive, aptitude, subject-matter expertise, people skills and integrity – remain the same. It is the remaining 20% of coachable capabilities – learnability and adaptability, entrepreneurial decision making, and people empowerment over command and control – that requires a new approach in light of digital realities. There’s no time like the present to redouble our efforts to build digital leaders!
Start Today, Change Tomorrow
Digital disruption is here, and it will be even greater tomorrow. Ignoring digital disruption won’t make it go away; but, it could make you go away.
We know organizations with a digital leadership foundation to their digital transformation strategy realize stronger financial results and enjoy competitive advantages relative to talent retention and development. Our competitors aren’t waiting for us to get our act together. We need to move…now.
If you need help rethinking your digital leadership development strategy, let’s talk. At Right Management, we take a digital leadership development approach that differs from existing, legacy models in three key areas:
- We ensure inherent enablers are aligned to the challenge of leading in times of certain uncertainty.
- Our approach narrows coachable capabilitiesto those that matter most to the delivery of desired outcomes.
- We guarantee business outcomesare defined not only in financial terms but also in metrics that measure the impact on human motivation.