Leadership capabilities for digital and non-digital businesses are converging. As a result, there is considerable commonality around some core capabilities organisations are seeking in their executives and managers.
The economy is reaching a threshold where the many businesses that are growing rapidly are likely to have been built and grow based on technologies that are intrinsic to their business. That is, the business is born digital – the business was originated, created and is managed in a digital format.
There are the global born digital behemoths, such as Amazon, eBay, Uber and Airbnb. Then there are those that start local and their business model enables them to shift to being significant global players. In the Australian context, think of organisations like carsales.com, realestate.com and seek.com, all now global players. Then think of Envato, the global online community for creative assets, tools and talent, or the global health platform Halaxy who realised the potential of global very early on. Another example is PEXA (Property Exchange Australia), Australia’s online property exchange network, which has built a world-first approach to assist lawyers, conveyancers, banks and other professionals lodge transfer documents with Land Registries and complete financial settlements entirely digitally.
Born Digital Businesses Require Agility and Boundary Pushing
Technology has obviously been intrinsic to the very conception of these business but also their evolution. The expectation is for constant innovation and product evolution, the need for agile work practices to achieve that, the ability to chunk major developments into modular approaches, and a good level of comfort with rapid teaming and cross-disciplinary ways of working.
The ability to ‘push the boundaries’ both internally and externally is necessary at these organisations. Think of the boundary-pushing regulatory challenges raised by businesses such as Uber and Airbnb, and the level and nature of complex cross-jurisdictional developments that are essential to the operation of PEXA.
Existing Business Models Continue to Transform
Alongside new business models there is the ongoing transition and transformation of businesses and government that are traditionally non-digital, or at least not born digital. They existed prior to say the early 2000s or started after that with technology being seen as supporting the business. They are dependent on, or enabled by, technologies. Their outreach to us as consumers and citizens was not necessarily in online or digital forms until more recently.
However, the application of technologies such as Artificial Intelligence, and the realisation of the value of data, is enabling many businesses to understand that their traditional core offering may not drive the majority of their revenues in the future. For example, through data mining, they are able to profitably offer a wider range of products and services – think of energy companies, airlines with their frequent flyer programs, and financial services organisations.
These developments have also shifted the criticality of some key capabilities that organisations are now seeking in their executives and in team members much more broadly.
Transformations are Both Digital and Analog
Five years ago John Chambers, former CISCO Executive Chairman, commented that we were only about one third through the most significant transformations and declared that the technology component, whatever it is, is the ‘easy part’. The World Bank’s 2016 Digital Dividends Report made a similar point – that gaining the benefits of digital developments requires a close look at the non-digital or analogue components.
As we see it, at the organisational level, the analogue components are shifts in leaders and leadership that accelerate the move from organisational disruption to an organisation transformed in its products, services and ways of working. The ability to achieve significant change, and then sustain the continuous evolution needed today, is founded on the behaviours and capabilities that an organisation nurtures and values, as these enable it to continue the necessary evolution.
Leadership Capabilities for Born Digital and Existing Businesses are Converging
Whether the technologies deployed are intrinsic to an organisation, or they enable the business or government service to function, there are some key capabilities that are increasing in their significance. As businesses and government agencies evolve their business and operating models, products and services, we see different emphases in what is required and expected amongst executives and managers in all sectors.
In assessing the capabilities of executives and managers into 2021, these five capabilities or attributes are converging in importance for executives and managers across all sectors:
> Situational Awareness – Accurately perceiving and interpreting what is going on, and then being able to use that information in decision-making
> Ambiguity Tolerance – Being comfortable with uncertain environments and multiple demands, and able to continue to function well in ambiguous environments
> Personal Agility – The ability and willingness to move quickly and with a good level of flexibility
> Team Building – Agile ways of working in uncertain environments requires bringing people together productively, with the ability to rapidly build trust
> Curiosity – Ongoing and intrinsic interest in learning about the world outside of the organisation, which builds a leader’s continuous learning muscle.
There is no doubt that what we used to refer to as capabilities for born digital businesses will become well-embedded into continuously transforming non-digital organisations.
Convergent Capabilities in Practice
Think about how COVID-19 has brought about fundamental and radical changes in the way in which private and public sector organisations have collaborated. This is particularly the situation in some countries where the situation appears to have been handled well, such as Australia and New Zealand. On the positive side, collectively across sectors and across jurisdictions issues were addressed, and major problems tackled such as ensuring citizen health and safety, the transport of medical supplies, the continuation of export trades and the safe movement of people. Many of these developments drew on the capabilities above in situations where there was great uncertainty and business and government environments were very dynamic.
People were brought together – in many cases virtually – from multiple tiers of government, unions, the military, the health sector and businesses. Curious people collaborated and figured out quite different ways to get things done. The challenge has been monumental and the road ahead is still long and difficult, but there are plenty of examples of very different organisations teaming together well and building trust in different ways – assuming good intent and integrity.
COVID-19 has taught us that when boundaries are pushed, people and organisations can move quickly driven by a clear purpose. As we navigate our way through this extraordinary time, we are still learning what is possible and the capabilities that every organisation can build and utilise. The challenge now is to embed those ways of working and interacting in our organisations, every day.