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Why today’s leader should be a digital leader by nature

David Jones, Senior Managing Director of specialised recruitment firm Robert Half, discusses the importance of digital leadership skills in a company’s CEO and how today’s leaders should navigate digital transformation.

As new technologies continue to have an impact on business operations, customers and employees, companies are experiencing an unprecedented period of evolution and adaptation as they navigate this era of digital transformation.

During any phase of change and disruption to the status quo, it takes the right leadership to be able to steer companies around the risks, through the challenges and towards new opportunities.

To stay competitive in the current market, companies need leaders who can identify trends and understand the importance of technology and how it can be implemented to drive the bottom line. According to research by Deloitte, companies now need “a completely different kind of leader: a ‘digital leader’ who can build teams, keep people connected and engaged, and drive a culture of innovation, risk tolerance, and continuous improvement.”

But while 80% of Australian business leaders say they are confident they have the right leadership team to implement digital change (according to independent research conducted in 2019 by Robert Half), a study of the ASX-200-listed CEOs reveals that only 8% of Australian CEOs have a background in technology. Aside from limited technical experience or knowledge, statistics also suggest companies aren’t moving fast enough to develop digital-ready leaders. On a global scale, Australian leaders are some of the least likely to regard the development of digital leadership capabilities as important.

Why companies need digital leadership

In the current business environment, CEOs with a background in technology are likely to become increasingly sought after by companies that have traditionally appointed leaders from predominantly financial backgrounds. But regardless of previous experience, the evolving nature of technology will require all leaders to embrace continuous learning and development, which means demonstrating a natural aptitude for technology.

With a digital-first mindset, leaders will be equipped to maintain forward focus and inspire ongoing innovation and improvement within a company as it transitions to a digital future. Specifically, leaders who nurture their workforce through a digital lens can orchestrate a collaborative approach to their digital transformation strategy by onboarding and developing talented employees.

For larger companies, this could mean experts specialised in technology infrastructure and operations such as a Chief Information Officer (CIO) or digital change managers like a Chief Digital Officer (CDO). For smaller organisations, this may involve investing in new roles, introducing external parties or platforms for top-priority digital agendas, or investing in organisational training and development.

To successfully facilitate digital transformation, today’s leaders must also be able to maintain workforce engagement and buy-in at all stages of the journey, through the inevitable challenges and setbacks. Digitally literate leaders will be most capable of instilling that all-important sense of purpose among their workforce by defining the company’s mission and values and how they’re aligned with the company’s digital strategy and goals. Leaders who demonstrate digital literacy are also well placed to drive change in an organisation by challenging any cultural barriers that get in the way of transformation and innovative ways of thinking.

It’s not all about managing internal teams though. At times of rapid change where fast decisions need to be made, leaders who are digitally savvy will be able to clearly and authentically articulate the significance of transformation strategies and the desired result to key stakeholders.

The leadership style of today’s digital leaders

Moving into the future, digital leaders must embrace and adopt alternative leadership styles to their predecessors’. With the current rate of change, agility will be crucial for remaining competitors to avoid being left behind. While companies once created set-and-forget strategies implemented over several years, today’s leader must continually evaluate progress, priorities and business models and be prepared to quickly change direction.

Digital leaders won’t always be able to identify the immediate impact or return on their investments either, which could make it more difficult to secure funding or buy-in from stakeholders. Rather than driving a direct outcome, today’s leaders must understand how digital strategies can be used as an enabler for broader corporate or product strategies, which calls for perseverance, bigger picture thinking and strong communication to model the outcomes for stakeholders and teams.

Today’s leaders must also recognise the benefits of encouraging different business functions to work together and become more integrated as part of the wider organisational digital transformation strategy. To achieve this, leaders must always set an example for the values of openness, collaboration and innovation as they transition their organisation to a non-siloed working culture. Nowadays, leadership is less about overcoming challenges by using judgement and experience, and more about finding new solutions by implementing innovative methods such as crowdsourcing and hackathons.

How leaders can develop their digital skills

In the past, leaders typically ascended the organisational hierarchy over a long period of time. Experience and loyalty, although still important, were deemed key factors in determining the suitability of leaders. Now, companies are prepared to identify and support future leaders sooner, by pushing their boundaries of responsibility and testing their raw leadership capabilities in different scenarios.

While developing leadership skills traditionally focused on methods of training, assessment and coaching, today’s digital leadership skills are gained and recognised through hands-on experience, exposure to real life problems and making valuable contributions. To develop the skills of a digital leader, professionals should take every opportunity to step outside their comfort zone by volunteering for new challenges, offering solutions and being prepared to take calculated risks.

Working in different functional areas of the business, working internationally, or undertaking collaborative projects also allows exposure to new people and different ways of thinking, as well as helping to gain an appreciation for wider business objectives. These skills will be essential for driving digital transformation across entire organisations in an increasingly global context.

As the rate of change accelerates and continuous learning becomes more essential, developing instinctive capabilities for sharing and absorbing knowledge will be invaluable to all digital leaders. Forming learning partnerships is an effective way to learn from other people’s experiences, challenges, ideas and insights.

Digital leadership is becoming a must-have for companies as they work hard to find their place in the future market. But while understanding the importance and value of digital leadership should be a priority, workforces and companies must work together to create the right ecosystem for developing a pipeline of future digital leaders. This means encouraging people to cross boundaries and embrace new challenges and knowing how to recognise emerging talent.

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