Leadership In The Digital Age: More Human Than You Think
To succeed in today's fast-paced world, executives must not only lead but lead digitally. And contrary to prior definitions, leadership in the digital era entails more than technological expertise. It requires a new human approach.
Previously, the term “digital leaders” defined competent executives who proactively adopt and use digital technology to deliver better organizational performance. While that’s still part of being a digital leader, the truth is there is so much more to being a digital leader in today’s age.
Why? We can all agree that technology, and particularly AI, in recent years has transformed products, data and overall operations. And for those reasons alone, digital know-how is crucial. What’s just as enormous is the impact that these digital transformations have had from a human perspective - on the way we work, the way we buy, and the way we live.
In other words, digital leadership is not just about leading digital initiatives - it’s about leading people, digitally.
So let’s jump into the skills leaders need in today’s digital era..
Data-Driven Intuition
How can you create agility though? It’s easy to fall behind as businesses drag their feet on opportunities and threats alike. In order to keep up with and lead innovation, leaders need to be swift and decisive. This is not to be misunderstood as making frivolous fast-and-hard decisions.
Digital leaders know that data is their best friend. They adopt, develop, and integrate data tools into their decision-making process so that critical information is always at their fingertips. It also entails bridging data across functional areas to ensure teams are not operating within data silos. This allows organizations to move forward at a rapid pace without sacrificing due diligence.
Take Ritual - one of Canada’s best-known startup apps that helps people get pre-ordered food from their favourite restaurants. Ritual has huge amounts of data coming in from both customers and partners. In order to get a real-time glimpse of their activity and growth, Ritual worked with snowflake to consolidate and align data. The result was a single source of truth that leaders now use to make decisions with agility and confidence.
Looking forward, data-driven intuition should be at the heart of every employee’s role - and its up to digital leaders to provide clear direction, insight tools and measures of success to keep everyone swimming in the same direction.
Cross-Functional Collaboration
Digital leadership is not a solitary journey. It does not exist in a single person or team, but is deeply interconnected with the functions across an organization. While it sounds obvious, many companies still hire a single digital focused executive thinking that this will solve all their gaps in digital performance and culture.
Consider the launch of a new digital product. This would require much more than just the efforts and decisions from the Head of Product. It will require seamless collaboration with the Head of Marketing and the CX and the Analytics & Technology team. If new talent is required, it will also involve partnering with HR or a recruitment firm to find the best talent quickly. You’ll also need to work closely with the CFO to establish budget and measure profitability.
In other words, it takes a village. Digital leaders recognize that their success hinges on their ability to collaborate across teams, and do so efficiently to eliminate bottlenecks. These forward thinking executives proactively foster strong relationships with people from all functional areas and adopt digital tools to expedite collaboration. From project management software, AI-assisted collaboration tools, ERPs, and data visualization - digital leaders work to ensure each interaction in the spiderweb of collaborations is seamless, efficient and powerful.
Follower-Worthy Empathy
While digital advancements have done wonders for streamlining processes, they’ve also had impacts on people’s work life and engagement. When investing in technology, digital leaders must demonstrate both reactive and predictive forms of empathy to gain an understanding of the sometimes negative impacts that arise. This skill involves actively listening to concerns, acknowledging the potential downsides of technological implementations, and finding solutions that prioritize both innovation and the well-being of employees and customers.
“We want to make sure that we’re dealing with not only the benefits of technology, but the unintended consequences of the technology from day one, as opposed to waiting for things to happen”
Take remote work as an obvious example. Remote work has allowed companies to expand hiring pools, reduce real estate expenses, and retain talent by providing better work-life balance at a very low cost. And studies show that, overwhelmingly, employees want remote work options.
However, remote work comes with its own unique set of challenges. In particular, people can feel a lack of connection with their managers and co-workers. Left unchecked, this can snowball into disengagement and dissatisfaction. Digital leaders take deliberate action to sustain engagement - with virtual all-hands meetings, open communication, actively seeking and acting on feedback, and fostering trusting connections with 1-on-1s .
Furthermore, empathy plays a pivotal role in fostering innovation. Take the case of Mark Cuban, who created an online pharmacy to address soaring medication prices. When questioned about his motivation and inspiration, Cuban stated, "it's just wrong that people have to choose between eating, you know, their rent, and taking their medications." Despite being a billionaire, Cuban empathetically placed himself in the shoes of those facing financial struggles, leading to the creation of an digitally-driven solution.
The bottom line is that executives need to look beyond the functional aspects and direct impact to revenue when evaluating technology. Effective digital leadership requires looking holistically, and with foresight, into how technology will impact work culture, employees, and customers.
Quantum Leadership
Quantum Leadership is the process of leading from the future. Quantum leaders understand that the very simple and linear thought process of “I do this, then this will happen” does not represent the real world. This traditional mindset fails to account for the thousands of interconnected and often uncontrollable outside forces impacting the organization.
Quantum leaders recognize that many parallel possibilities exist from a certain action and try to forecast these different scenarios. Instead of hoping for the world to become simple, they embrace unpredictability and certain levels of ambiguity. They focus on building agility, flexibility and collaboration within their organization so that they can lead effectively through change. With equal importance, they must empower teams with the trust, autonomy and insights they need to be just as responsive.
The importance of quantum leadership has been made vividly clear as we navigate the AI revolution. Take Satya Nadella, the CEO of Microsoft, which is the second largest company in the world. Satya Nadella has steered Microsoft into multiple AI initiatives, their biggest being a $10 billion investment in Open AI.
While driving the company towards AI, Nadella still actively expresses his apprehensions and considerations as he and his team work to predict all of the potential paths AI can take us down. This quantum style leadership has led Microsoft to create Responsible AI principles to govern how machine learning is built, and change their mission to “build responsible AI-based products”.
“I worry a lot, even in spite of my enthusiasm, that there is a new angle with AI. I worry a lot that, in fact, this vicious cycle that I’m trapped in can even become even more vicious because the defaults get reinforced.”
Employees and customers alike look towards this human-centric and transparent type of leadership to develop trust. Leaders focused purely on short term gains could be tempted to steer as quickly as possible into the AI era. However, digital leaders like Satya Nadella commit to a much more thoughtful, multi-faceted and futuristic approach.
Conclusion
Between 2018 and 2022, digital leaders achieved average annual total shareholder returns of 8.1% vs. 4.9% for laggards (HBR). During the same period, these leader’s operating expenses grew at only half the rate (1.3%) per year than laggards (2.3%). Needless to say, companies are looking for digital leaders ready for the future, and not the past.
“The biggest threats to a business used to be its competitors. But today, AI has opened the door to much bigger possibilities and threats. The same way uber disrupted the taxi business (and is now creeping its way into home services). Companies need to ask themselves: Do we have enough talent and thinking to identify where we might be knocked off our feet? Do we have the leadership needed to navigate and lead disruption - and not just be a victim to it?”
As we navigate the complexities of leadership in the digital age, one thing is clear: mastering the human-focused skills of digital leadership is non-negotiable. From making data-driven decisions and fostering cross-functional collaboration to embracing ambiguity with quantum thinking and trust in your teams.
Partner with Ari Agency to elevate your digital leadership game. Our team of executive search experts understands the unique demands of the digital age and can connect you with top-tier executive talent ready to lead your organization into a transformational future. Embrace the digital leadership imperative, and let's shape success together.
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