January 24, 2020
Most executives lack skills to lead in digital economy
Most executives around the world are out of touch with what it takes to lead effectively and for their businesses to stay competitive in the digital economy, a new study has claimed. Out of nearly 4,400 executives in over 120 countries surveyed by MIT Sloan Management Review (MIT SMR) and Cognizant, only 9 percent agreed that their organisation has the skills at the top to thrive in the digital economy.
According to the survey:
- Only 12 percent of respondents strongly agreed their own business leaders have the right mindsets to lead them forward.
- Only 13 percent strongly agreed their organisations are prepared to compete in increasingly digitally driven markets and economies.
- A large majority, 71 percent, of respondents believe that they are personally prepared to lead in the digital economy. However, the same group scores significantly lower when asked whether they possess specific digital skills, such as using data analytics to influence their decision-making (55 percent) or recommending the use of machine learning technologies (50 percent).
- Just 40 percent believe that their organisations are taking the necessary steps to build robust digital leader pipelines.
“A generation of leaders in large companies are out of sync, out of tune and out of touch with their workforces, markets and competitive landscapes. What got them to their current exalted status won’t be effective much longer — unless they take swift action,” said Benjamin Pring, report co-author and director of the Center for the Future of Work for Cognizant. “Allowing unprepared senior executives with outdated skills and attitudes to stick around forces next-generation, high-potential leaders to move on to new pastures, which harms morale and ultimately shifts the organisation further away from where market demand is heading.”
[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]A generation of leaders in large companies are out of sync, out of tune and out of touch with their workforces, markets and competitive landscapes.[/perfectpullquote]
Leaders must learn new behaviours and mindsets
The study’s authors have identified three categories of leadership behaviours, which they term the 3Es:
- Eroding behaviours: these are antiquated leadership patterns such as relying on hierarchy for influence, command-and-control decision-making and rigid strategic planning.
- Enduring behaviours: these are evergreen and time-tested leadership attributes and behaviours including ethics, trust, and integrity.
- Emerging behaviours: these include digital savviness and collaboration skills.
The enduring and emerging behaviours are, they say, essential elements of successful leadership in the digital economy. According to Carol Cohen, report co-author and senior vice president, global head of talent management and leadership at Cognizant: “A key to success is artfully introducing new leadership approaches that particularly appeal to a new generation of employees while at the same time honouring the time-tested behaviours and attributes that inspire trust, build a sense of community and motivate employees to improve performance.”
To solve the challenges of the digital economy, the authors say that leaders must also cultivate new mindsets. They believe the following four attitudes constitute the hallmarks of leadership in the digital economy:
- Producer mindset: this combines a focus on customers with a focus on analytics, digital savviness, execution and outcomes.
- Investor mindset: this is about pursuing a higher purpose than shareholder returns.
- Connector mindset: this demonstrates a mastery of relationships, partnerships and networks to drive organisational effectiveness.
- Explorer mindset: the authors say explorers are curious, creative and operate well in ambiguous situations. They engage in continuous experimentation, encourage failure and learn by listening to a variety of voices.
