The Impact of the Digital Revolution on Leadership

Today, workplaces are undergoing a digital revolution which is helping to transform entire industries and forcing companies to change the way they operate. Digitisation has the potential to increase productivity and efficiency, while also improving communication, and remote working is no longer an exception but an expectation.

However, in addition to the transformation of the workplace itself, the digital age is having an impact upon leadership and, more specifically, on what is expected of a leader. This will have an effect not only on existing leaders, but on future leadership development as well. So how exactly is the digital revolution impacting senior business figures?

The Age of Disruption:
One of the major threats facing leaders comes in the form of ‘horizontal innovation’ driven by technology. Increasingly, companies are using digital innovations to expand into entirely new markets. Indeed, for several years, business leaders have been warned that they are living in a so-called ‘age of disruption.’

According to a 2015 IMB global C-suite study, no single business sector is safe from the threat of new entrants. This presents a challenge for leaders, who were previously able to see competition coming and take action. Now, instead, they must accept that threats could be invisible and be prepared to adapt as and when they present themselves.

Technological Literacy:
While it is not essential for a leader to possess all of the digital skills required for their business to operate, a level of technological literacy is required in order to understand those operations and to address the requirements of the business effectively. However, research suggests there is a worrying lack of literacy among senior staff.

For example, the majority of respondents to an E-Consultancy survey on digital leadership stated that it was important for leaders to be ‘technology literate’ in a modern business environment, yet almost a third of respondents deemed the leadership within their own organisation to be ‘not very’ or ‘not at all’ technology literate.

This would suggest that, moving forward, leadership training will need to evolve to improve this level of literacy and bring leaders up to speed with the realities of modern technology.

Digital Skills Gap:
Research conducted by Accenture Strategy found that almost three quarters of leaders expect their company to ‘go digital’ within the next three years, but only one in five say their business is already digital. Therefore, it will be necessary for the majority of leaders to oversee some kind of transformational programme. 

Perhaps the biggest challenge is making sure they put together a workforce with the appropriate skills to manage this transformation. According to a study by Capgemini Consulting and MIT, 77 percent of all transformation programmes fail due to a digital skills gap, which prevents the required changes from occurring.

“The lack of digital skills is the one of greatest challenges [leaders] face,” Deborah Brecher, Managing Director of Accenture Strategy, writes in the Philadelphia Business Journal. “Only half say they actually have a strategy in place to manage and develop the skills and talent they need in this digital reality.”

Leadership Characteristics:
One of the most interesting things about the digital revolution’s impact upon leadership has been a change in perception over what constitutes a good leader. In the past, traditional leadership qualities included things like vision, conviction and a competitive drive, but views are now shifting slightly.

E-Consultancy asked participants in their study to pick out key characteristics required for a leader in the new digital age and it was notable that technological literacy featured heavily. However, respondents also felt it was important for leaders to be ‘data driven’, which clearly reflects the importance of ‘big data’ in modern business.

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