WHY YOUR DIGITAL TRANSFORMATION NEEDS A LEADERSHIP DEVELOPMENT BUDGET
If every firm is becoming a technology firm , then every leader needs to become a digital leader .
igital transformation is no longer just a
D buzzword . In fact , for many firms , digital transformation is now an ongoing process rather than a one-time radical change , and forms a core part of their innovation processes . What was once a highly specialised field discussed by consultants and chief technology officers ( CTO ) has become a highly desirable skill set — appearing in an increasing number of job titles and more and more CVs .
But this raises an important question : if digital transformation has become business as usual , why are firms investing so heavily in digital technology and technological innovation and so little in preparing the leaders who will oversee it ?
While IT departments , consultants and external technology providers plan and support the roll-out of digital technologies , it falls to managers to put these new systems to work , to inspire employees and customers to engage with them and , most importantly , to implement new routines and processes to get the most out of these investments .
This point is critically important , and all too often overlooked . If every firm is becoming a technology firm , then every leader needs to become a digital leader . But what does it mean to be a digital leader ? How should a learning and development team approach this problem ? What sort of leadership development should be included in the digital transformation budget ?
It is not enough to have excellent IT departments , CTOs with vision , and world-class technology
Developing digital leaders
Nurturing digital leaders requires the development of new leadership competencies . First , there are new technological competencies – basic skills that leaders need in order to understand digital technology and its impact on organisations and industries . The following three technological competencies are particularly important :
• basic technological literacy ( including an understanding of blockchain , cloud services , artificial intelligence and data analytics )
• a basic understanding of disruption and disruptive innovation
• an understanding of platform strategy .
The goal is not to make leaders into experts , but to familiarise them sufficiently with core digital technologies and the basics of technology strategy to allow them to engage effectively with experts and staff on decisions and investments .
There are also new organisational competencies that successful leaders require . Organisational competencies are about managing people , something that , perhaps counterintuitively , becomes even more important for organisations undergoing digital transformation . Developing a coaching style of leadership , the ability to manage diversity , and the ability to lead with high emotional intelligence through digital communications platforms are all key to successfully leading teams following digital transformation .
Finally , there are ethical competencies - the skills needed to understand and manage the ethical challenges that digital transformation creates . While the exact ethical competencies required will differ from organisation to organisation , there are two that are particularly important .
First , digital leaders need to become familiar with the basics of cyberethics . This includes challenges around privacy and machine decision making . Second , as we move from a world populated by technology that was largely linear to one where technologies are exponential , the impact of digital technologies poses a huge opportunity , but also a huge risk . Leaders need to understand and be sensitised to these exponential dynamics , and learn to spot and manage them .
Exciting opportunities exist to create new business , improve existing processes and drive efficiency . But for this to happen , it is not enough to have excellent IT departments , CTOs with vision , and world-class technology . Firms need leaders , at all levels , with the competencies to exploit the digital transformation that is happening around them .
Nelson Phillips is professor of innovation & strategy , co-director of the Centre for Responsible Leadership , and the associate dean of external relations at Imperial College Business School .