The world of work as we know it has shifted dramatically, and we have seen many executives around the world are out of touch with what it will take to lead in this new digital economy. The rapid rise of digitalisation, new agile competitors, and an increasingly diverse and demanding workforce require more from leaders than what most can offer. Add a global pandemic and it’s no surprise that the current generation of leaders is struggling.

The need for change is urgent, and time is running out for leaders who are holding on to old ways of working and outdated leadership models. The growing concerns between how many organisations are currently led and how they should be led come through in my discussions and interviews with over 2000 leaders in the past two years.

The findings are as sobering as they are inspiring. 

MORE FOR YOU...

• Diversity delivers dividends
• The hybrid way of life - not just work - is here to stay: Zoom’s Abe Smith

Why are our leaders struggling?

At a top-level, there are four key reasons. Technologies are advancing at an unprecedented rate, and digitalisation is enabling an 'always-on' organisation. The convergence of technologies will soon drive speed and collaboration between humans and machines as we could never have imagined. We now have a workforce of Digital Natives, Gen Y & Z who are accustomed to constant online interaction who are seeking greater empowerment and learning opportunities than ever before. New expectations have created a demand for a new type of Leader, more empathic, with more transparent decision making, who is more social-political conscious and demonstrates humility and integrity. The rise of globalisation and socio-environmental and political pressures mean leaders need to be globally aware and organisations will seek to build national leadership capability where once they relied heavily on global Leadership & expert Expat talent.

At a deeper level, leaders are having to manage organisational and individual tensions that co-exist. We are driving for simplification through digital technologies, at the same time globalisation is driving change. We want innovation at the same time we need regulation. Likewise, we know digitalisation is the future, but we need to ensure humanisation exists in the design phase.

To compound matters, many of today’s leaders are not as self-aware as they need to be. Let’s take for example Vishal Garg, CEO of Better.com that fired 900 employees on Zoom recently and on the news of the recent resignation of CEO & Founder of Twitter, Jack Dorsey the share price jumped more than 10 per cent. Blind spots disrupt their ability to prepare for the intense and unfamiliar competition brought on by digitalisation. Strategic blind spots exist when leaders fail to grasp the revolutionary changes upending the business models in their industries. Cultural blind spots exist when organisational behaviours are so embedded that improvements become affronts to cherished norms. Traditional norms around how top executives should communicate with their people are shifting more quickly than many leaders recognise and we see this through leaders’ development of a digital profile and communication with their organisation through blogs and posts. Human-capital blind spots exist when a company’s talent policies and practices reinforce outdated hiring and promotion practices. People now expect the latest technology and an environment that is open and collaborative with Leaders who are accessible.

Personal blind spots exist when leaders deliberately or by default surround themselves with colleagues who reinforce and enable old-world thinking. Several leaders I spoke to now look for candidates with two key qualities, greater humility, they know what they don’t know, and they recruit, very quickly, team members with different perspectives and technology savvy.

One company I worked with, Li & Fung, the Hong Kong-headquartered company operates an extensive global supply chain network, with more than 230 offices and distribution centres across 40 different markets. The company, which was founded more than 100 years ago and orchestrates the supply chain for major retailers and brands globally has a remarkable story. When Spencer Fung became group CEO of Li & Fung in 2014, he believed he would be a steward for the business his family had built over four generations. However, shortly into his tenure, he realized that the company needed to transform to remain competitive, and so he needed to be a transformation champion, not a steward. After changing his perception of his role as a leader in the company, Fung took on the challenge with the spirit and enthusiasm of an entrepreneur. He became fond of saying, 'If we don’t learn to act as fast, we are going to be dead'.

Great leaders today are addressing these tensions head-on with a simple remedy: They ask for help. They trust that their teams will be motivated when asked to contribute their ideas on how to reconcile these and other tensions that confront their organisations. They have the humility to express transparently and authentically that together, as a community of leaders, they will put these issues into the proper perspective.

The primary leadership challenge in the digital economy, however, isn’t simply to adopt a group of behaviours or to achieve a set of competencies. The deeper challenge is to develop a new mindset that anchors, informs, and advances these behaviours. 

Mindsets are mental operating systems that guide behaviours. Behaviour is a function of mindset. Leaders need to change their attitudes and beliefs — their mindsets — about what leadership looks and feels like if they want to produce behaviour change that lasts over time. 

Based on my research, I identified four mindsets that represent the hallmarks of great leadership in the digital economy. These mindsets reflect the principles, values, and norms of trailblazing leaders. Leaders interviewed expressed these mindsets in clear, declarative, and descriptive statements of who they are, what they stand for, what they value, and how they will behave. 

Extraordinary leadership teams from companies like LinkedIn, Unilever and Netflix express these mindsets when discussing their intent to form powerful communities of engaged leaders who are customer-obsessed, incurably curious, committed to purpose and planet, and masters of connectivity, networks, and relationships. Developing and embracing these mindsets requires a complete reimagining of what it means to lead in the digital economy. I emphasize leadership mindsets not to minimize skills or behaviours, but because we found clear evidence that outdated leadership mindsets undermine leaders’ effectiveness. Talking about being innovative or resilient, for example, doesn’t get the job done. Talking action does. 

Creator Mindset 

The creator mindset combines a focus on customers with a focus on analytics, digital savviness, execution, and outcomes. Creators use analytics to accelerate innovation to address shifts in customer preferences and improve customer and user experiences. Companies need to be clear on just what it is that makes them special and execute along those dimensions. That means working in teams to get the big things done — not just for the team’s objectives, but for the objective is to create a world-class customer experience. Fashion’s traditional retail model, for instance, stood unchanged for many years, but disruptions to the industry have put a new premium on speed and customer experience and we see the rise of fast-fashion and enormously successful brands like Zara. What began as a small Spanish clothing company, founded in 1975, has transformed into a global business and market leader. Boasting a brand value of $15B, Zara is renowned for its ability to develop a new product and get it to stores within two weeks, while other retailers take six months. 

Investor Mindset 

Leaders with an investor mindset pursue a higher purpose beyond shareholder returns. They are dedicated to growth but in a sustainable way. They care about the communities in which they operate and are intent on improving their quality of life. They care about the welfare of their employees and invest in safe working conditions. Their investment mentality leads them to deepen their commitments to, and understanding of, their customers; they don’t just look at customers as streams of revenue. They are in the game for the long run, so they are deliberate about the big bets, even though they move with speed and agility daily. When it matters to the planet, communities, and the welfare of employees and customers, they take their time to get things right. The truly great leaders have motivating, purpose-driven visions, with an authentic and inspiring explanation of how the business creates value both for itself and for society simultaneously over the long term.

Investing in a wide range of talent, not just high performers, is a great example of an investor mindset. It was also a consistent theme throughout the many interviews. Amazon and JP Morgan investment in skills for their workforce is a prime case. Many of their employees don’t have a formal education and without further training or education, their career potential will be very limited. But they are investing in them, especially in helping them become more digitally savvy. 

Collaborator Mindset 

In an increasingly connected world, mastery of relationships, partnerships, and networks is a new currency that drives organisational effectiveness. Leadership teams with a collaborator mindset get this need to collaborate. It’s how they operate by regularly bringing together diverse stakeholders to achieve a shared purpose, often in a short time frame. With more diverse interests, spread across individuals, functions, companies, geography, and industries, the challenge of aligning interests becomes more complex and more urgent. 

We know it is so important to have a diversity of voices at the table, and many of these leaders try to bring a diversity of skill sets, but more important, a diversity of perspectives. Microsoft is a great example of a collaborator mindset; their business model depends on their business collaborations and networks with over 2000 enterprises, schools, universities and governments in the research, design, development and implementation of technology.

Explorer Mindset 

Explorers are curious and creative, and they operate well in ambiguous situations. Organisations whose leaders have an explorer mindset often have cultural norms that tolerate, and indeed encourage, failure, reverse mentoring, and a deep curiosity about how the forces of digitalization are reshaping the competitive environment. 

Great leadership teams in the new economy have a deep and restless curiosity. They are curious not only about driving customer and user community value but about clarifying and pursuing their organisations’ social value as well. Explorers are intent upon building amazing communities and one of the most effective tools they have in doing so is shaping, and articulating powerful narratives of what’s possible. They share stories about what great leadership looks and feels like when individuals come together as teams, and teams come together as communities, with a unifying sense of purpose and collective ambition.

Recommendations 

Across industries, leaders are reassessing the merits of long-held rules about power and hierarchies. Extraordinary leaders see the potential of a new path, and they combine that vision with the courage to take a stand to bring about change. They understand that people don’t want to be just employees; they want to be active citizens in amazing workplace communities that are doing their best to change the world for the better. Embracing the leader’s new role in the digital age is more crucial than ever. 

What can you do to make your organisation an amazing community of leaders? 

Articulate a powerful leadership narrative that courageously lays out what you believe is important for leading in the digital economy. Promote a culture that identifies future leaders early in their careers: Signal which people with which behaviours and mindsets best reflect the values expressed in your leadership narrative. 

Build communities of leaders by empowering employees at all levels. Understand that your employees value and respect your ability to connect with them far more than your title. Make transparency and trust the cornerstone of your culture to unleash the energy that exists at every level and in every corner of your organisation. 

Align your talent, leadership, and business strategies. Identify the emerging and enduring behaviours that are most critical for your leadership teams. Hire and promote people who embrace the skills and mindsets you value most. Identify and fix the blind spots that might block your ability to attract, engage, develop, and retain talent. 

Don’t just embrace inclusion and diversity — demand it. The research is clear that diverse teams perform better, so stop talking about diversity and make it happen. Use data and insights to identify where diversity is lost and how to preserve it. Bake diversity metrics into your scorecards. Reward inclusion and diversity champions. 

The research is clear that diverse teams perform better, so stop talking about diversity and make it happen. Use insights from data to identify where diversity is lost and how to preserve it. Bake diversity metrics into your scorecards. Reward inclusion and diversity champions.

What is the job of the leader in this new world of work? As the gig economy takes shape, the role of leaders will shift from managing talent to inspiring and engaging people as members of a community of leaders. 

Leaders need to be prepared for this difficult shift, which is replete with blind spots and cultural tensions. Identifying and addressing these challenges are substantial undertakings and can be achieved only by reimagining what it takes to be a leader. 

Leading in today’s world is about creating conditions for success so that everyone can contribute their best efforts to a common cause. This goal of building a community of leaders relies on four components: enhancing customer value, serving a higher purpose, strengthening connectivity, and fostering creativity and continuous innovation.

Creating the conditions for success starts with setting the tone and developing the mindsets that constitute the foundation. Successful leaders are the ones who don’t just see what the future might bring; they create it. They are the ones who don’t just talk about the power of purpose; they live it. They are the ones who don’t just embrace inclusion and diversity; they measure and reward it. They are the ones who have learned how to lead teams and companies with the courage, freedom, and joy that comes from knowing that they are building new and amazing communities of leaders. 

This article was first published in December 2021.