(Image credit/Pixabay)A study by MIT Sloan Management Review and Cognizant reveal many business leaders are out-of-touch with all things digital. Furthermore they don’t have the skills to lead effectively in the digital economy.

Employees expect digital transformation to better reflect and respect their concerns. Issues such as purpose and inclusion, just as well as ensuring superior business capabilities, better compensation, and greater flexibility. Seventy-two percent of respondents strongly agree it is very important working for an organisation with a purpose they believe in. However, a mere 25% strongly agree that their organisations are as purpose-driven as their leaders believe them to be.

Getting digital transformation wrong

Leadership’s Digital Transformation: Leading Purposefully in an Era of Context Collapse,” is based on a global survey of 4,300 employees. Respondents came from non-managers to CEOs, in more than 20 industries. The study features interviews with C-level leaders, including Starbucks CEO Kevin Johnson; Anheuser-Busch InBev (AB InBev) CEO Carlos Brito; Delta Air Lines CEO Ed Bastian; former Best Buy chairman and CEO Hubert Joly; and Purdue University president Mitch Daniels.

Michael Schrage, fellow at MIT Sloan School's Center for Digital Business (Credit image/Michael Schrage)
Michael Schrage, fellow at MIT Sloan School’s Center for Digital Business

According to report co-author, Michael Schrage, MIT Sloan Initiative,”The study suggests many leaders and organisations got digital transformation wrong.”
“For quite a few respondents, top management’s focus on greater agility and efficiency seemed disconnected from enterprise purpose and values. Leaders frequently came off as unaware of how their digital communications style undermined their credibility. Digital talent and digital networks have made leadership more transparent. This study observes that transparency imposes new accountability and responsibility on top management.”

The study reveals four key insights:

Providing workers the sense of purpose they crave

Seventy-two percent agreed it is very important to work for an organisation with a purpose in which they believe. Still, only 49% strongly say that they believe in their organisation’s purpose. Even fewer (36%) strongly agree that they believe in their organisation’s ability to advance its purpose. A mere 25% strongly agree that their organisations are as purpose-driven as their leaders believe them to be.

Having a clear purpose

Sixty-four percent of respondents affirm that top management is prioritising diversity and inclusion practices. Respondents from highly purpose-driven organizations agree at a higher rate of 84%.

Leaders are also failing to invest in and develop their digital competencies.
Ninety-three percent of respondents say being digitally savvy is essential to performing well. In addition, 88% state that digitally savvy leaders matter to their organisation’s ability to succeed. Only a fifth of respondents strongly agree their leaders have the right mindset to thrive in the digital economy.

Failing to address the erosion of work/home boundaries

Only 36% of global survey respondents say they establish clear rules about their working hours. When they are working and when they are not working.

Only 28% of respondents agree their organisation has policies about when and how to communicate outside traditional business hours. Fewer (24%) agree that their organisation adheres to these policies if they do exist.

The authors of the report describe the trend as – ‘Context Collapse’. The pervasive social media phenomenon that collapses people’s multiple identities into one — as a digital disruptor of legacy leadership practices. The report notes that the boundaries between work and home is dissolving. For example, how leaders digitally lead by example will determine their credibility, authenticity, and influence with their talent..

According to report co-author Benjamin Pring, Director of Cognizant’s Center for the Future of Work, “Our study showed that context collapse means leaders are now more accountable. Leaders must be more transparent — than ever before. They must recognise and respond to this new reality.”

Two Leadership Gaps

One surprising finding was the perception, organisations were not committed to professional development around digital capabilities for managers and leaders.

This cuts directly against the near-unanimous perception that digital savviness is a critical success factor for management. The overwhelming majority of survey respondents assert that their leaders are not prioritising digital self-improvement.

Less than half survey respondents (48%) say companies create project teams that are deliberately diverse in terms of digital savviness. Even fewer (31%) believe their organisations actively monitor or assess whether managers are improving their digital skills. Just 19% of respondents agree that organisations have enacted reverse mentoring programmes to improve the digital savviness of top management.

Workers are similarly sceptical of leaders’ professed commitment to purpose. Only 25% of respondents strongly agree that their organisations are as purpose-driven as their leaders believe them to be. Data suggests companies that clearly link purpose and workers’ belief in that purpose are significantly more highly rated by employees.

Enterprise Times: What this means for business?

This is an interesting report. “Leadership’s Digital Transformation” offers practical and actionable recommendations for successfully leading beyond digital transformation. The report outlines how leaders can champion purpose to be a (re)organising principle. The importance to lead by example, leverage context collapse, measure leadership effectiveness and analyse leadership networks to improve culture.

While it may be true that many organisations have bought into the digital transformation aspiration. Few workers recognise leaders committing to their own digital talent development. To be sure, these unflattering perceptions of leadership may be mistaken or unfair, but they consistently and persistently exist.

Another interesting point the research raises was the lack of commitment to professional development around digital capabilities for managers and leaders. Digital by it’s nature is constantly changing and evolving and being impacted by changes in consumer behaviour. Any enterprise contemplating digital transformation have to keep a finger on the pulse of that change. This can only be achieved by training, attending industry events and seminars. Therefore, it was surprising to find the majority of respondents believe their leaders are not prioritising digital self-improvement. This just sounds like serious corporate self-harm.


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