‘Developing leaders for the digital age’ or ‘developing future-ready leaders’ are buzzwords that get thrown around a lot these days when we talk about the future of leadership training. However, when you ask some industry insiders what actionable leadership behaviors and capabilities they associate with these concepts, their answers are often lacking in depth.
So, I decided to dedicate this blog post to outline in detail the six future-ready leadership capabilities that we need to combine with the well-known traditional leadership capabilities to develop effective leaders for the digital age: Lead with digitization, manage complexity, hyper-collaborate, foster innovation, work with data, and manage virtual teams.
1. Lead with digitization
Nowadays, leaders across all levels of an organization need to be engaged in helping to position the enterprise to achieve its digital ambitions to remain competitive.
First, this means managers and leaders across all levels need to have a deep understanding of how the digital era is impacting customer behavior and how this impacts customer expectations.
Second, they need to develop their ability to see how the organization can leverage new digital technology to digitize products & services, improve the customer experience, increase operational efficiency, optimize processes and improve collaboration & coordination across departments.
Leading with digitization does not, however, mean that a future-ready leader has all the answers. Quite the opposite. Future-ready leaders appreciate that developing a digital transformation strategy is a complex issue that requires a cross-functional process. Their role in that process is to guide and challenge their people and peers to explore how the use of data could improve decision-making in critical areas of their organization, look for opportunities to leverage machine learning and artificial intelligence, explore how the organization might use predictive analytics and automation to improve operational efficiency and/or create dynamic pricing models.
Lastly, this digital transformation requires leaders to manage their teams and their stakeholders through significant change. As such, change management skills are also vital to effective leadership in the digital age.
2. Manage complexity – a.k.a lead in a VUCA world
Our working context today is much more volatile, uncertain, complex, and ambiguous (VUCA) than ever before. As a result, our classic “hero leader” approach no longer works as leaders can no longer rely solely on their own experience or expertise to find the answer to these complex problems.
Instead, future-ready leaders need to have the ability to lead the charge to solve complex problems collaboratively. This involves, for example, learning to use tools, such as problem flow diagrams and causal modeling, to help a team evaluate and define the problems at hand. Moreover, they need to learn how to use different techniques, such as divergent and convergent thinking, to guide a team of people to generate alternative solutions to the problem, as well as how to weigh those alternative solutions.
Lastly, even when a future-ready manager or leader has decided on which solution to pursue, they need to know how to take an agile approach to the management of its implementation to allow for the volatile and uncertain conditions of today’s ever-changing business environment.
Everyone knows that collaboration is key to success in today’s fast-changing complex business environment. However, collaboration is one of those digital-era capabilities that seems simpler than it is in practice. Truly mastering the art of collaborative leadership takes a little more than just being friendly and a team player.
First of all, future-ready managers and leaders need to have the awareness to fight their natural inclination to hire people in their image. Instead, they need to build teams with a diversity of thought. However, just putting a bunch of diverse people together does not guarantee collaboration either. To do that, a leader needs to know how to proactively create a culture that truly unleashes the collective wisdom of such a diverse team. And doing that requires the ability to help people to talk together effectively – i.e., a future-ready leader needs to know how to create the conditions to foster and encourage genuine dialogue between their people so that they can unleash the fantastic collective wisdom of their people to successfully address the challenges of tomorrow.
Secondly, there is no room for ego in collaborative leadership. Though it can be tempting for a leader to focus just on what their team is directly responsible for and can achieve, there is no room for such a silo mentality. Instead, future-ready leaders need to actively seek to share information and knowledge across the organization to help the company as a whole to find solutions to the multi-disciplinary problems that continue to emerge in today’s fast-changing environment.
Lastly, a future-ready leader needs to act as a connector who links people, ideas, and resources that wouldn’t usually bump into one another, both internally and externally. This means that future-ready leaders need to proactively build a network of internal and external relationships that give them access to information, referrals, and opportunities that can help them and their organization.
In summary, future-ready leaders need to truly master the art of collaborative leadership, both at the team level and across the organization.
4. Foster innovation
In today’s fast-changing world, pursuing continuous improvement is not enough to survive – companies have to actively seek and enable innovation across the organization. However, innovation is still too often thought of as something that is the remit of the product department. Creating new products is only one way to innovate, and on its own, it provides the lowest return on investment and the least competitive advantage. Instead, future-ready managers and leaders across the organization need to each focus on finding ways to foster innovation in their respective departments to add value to the company’s value chain.
To foster innovation, future-ready managers and leaders need to master three capabilities.
First of all, to foster innovation, future-ready managers and leaders need to learn how to develop a culture that actively supports and enables innovation. This includes, among other things, how to create a culture that makes it safe for employees to take risks to explore new ways of doing things and how to develop their people’s future-ready skills and the knowledge base necessary to generate radical ideas.
Secondly, creativity is fundamental to innovation. Creative thinking is not just needed in marketing or product development. Creative thinking today is required in how we design to do things in EVERY part of an organization, from how a company hires to how a company ships, to how a company handles customer service because these can all contribute to genuinely differentiating a company’s offering. Just think about Zappos’ customer service and Amazon’s Prime service as examples of that. So future-ready managers and leaders need to learn how to enable and encourage their people’s creative thinking by learning to use tools and processes such as mind mapping, design thinking, and catalytic questioning to unleash their people’s creativity.
Lastly, fostering innovation is not just about brainstorming and yellow stickies. Future-ready leaders take a methodical approach to innovation by mastering such frameworks as, for example, Doblin’s ten types of innovation.
5. Work with data
Historically, organizations viewed data as a byproduct. However, data and analytics are at the heart of the digital economy, so future-ready leaders need to be well-informed and conversant on the role of data.
First of all, future-ready leaders need to know how to analyze, interpret, and summarize their company’s data to generate valuable insights that help them make better decisions for their organization and communicate more effectively with their team.
Secondly, future-ready managers and leaders need to know how to properly manage data as a key business asset, including managing such issues as data integration, data storage, and infrastructure as well as legal and ethical considerations, such as data security and adhering to the data protection rules in place in the US, Europe, and Asia.
6. Manage virtual teams
Remote employees and distributed teams are increasingly common in today’s workforce and bring with them a whole new set of challenges. For example, future-ready leaders need to learn to take a very thoughtful approach to communication because, on virtual teams, communication tends to be less frequent and lack the richness of in-person interaction. Unless the future-ready leader proactively addresses this by being extremely clear and disciplined about his communication, these challenges could result in remote employees becoming disengaged, leading in turn to poor performance, lack of teamwork, and low morale. Another critical challenge for managers and leaders of distributed teams is that their teams often cross borders. This means that they need to have a well-developed understanding of how cultural differences may impact the behavior of the different people on their team and how to bridge these differences to help their people effectively work together. For example, giving feedback is a crucial part of managing and leading their people. It is, therefore, important to appreciate that people in different parts of the world provide feedback in very different ways.
These are but two of the challenges of managing virtual teams. There are several more, such as how to build trust and track productivity. All in all, suffice to say that learning how to manage virtual teams effectively is not to be underestimated and needs proper attention to create effective future-ready leaders.
No one is born with the above outlined six future-ready leadership capabilities, not even Gen Z-ers. These aren’t innate traits, nor are these purely behavioral capabilities that managers and leaders can acquire through leadership coaching. Instead, these are complex capabilities that managers and leaders can learn through a combination of knowledge transfer, contextualization, and practice. These six future-ready leadership capabilities should form a core part of any leadership training. Without them, you’ll not be developing leaders that are equipped to help your organization to thrive in the digital age.