Leadership’s Digital Transformation

Leading Purposefully in an Era of Context Collapse

by: Michael Schrage, Benjamin Pring, David Kiron, and Desmond Dickerson
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Digital transformation — as business ideology and enterprise imperative — has won: Serious business leaders worldwide accept that their markets, customers, and workers have gone digital. In our recent global management survey, 93% of workers across industries and geographies affirm that being digitally savvy is essential to performing well in their role. The idea that effective digital transformation delivers agility, adaptability, and customer centricity is now both managerial mantra and leadership inspiration.

In real life, however, effective digital transformations also deliver unforeseen risks and unanticipated costs. Leaders’ emphasis on greater efficiency and productivity has provoked a backlash, particularly from a digitally savvy workforce. Digital talent now expects more from leadership than greater flexibility, better compensation, and/or productivity-supporting work environments. Our research suggests that digitally savvy workforces expect digital transformation to better reflect and respect their concerns and values, not just ensure superior business capabilities and opportunities.

These expectations disruptively alter how leaders exert power, influence, and control. The new bottom line: Successful digital transformation demands that leaders measurably transform themselves. Efforts to lead digital transformation are unlikely to be effective without a leader’s own affective digital transformation — one that makes purpose, engagement, and fairness as important to workplace success as data-driven agility and productivity.

This affective rewiring puts a new premium on articulating and committing to corporate values. The COVID-19 pandemic and recent social upheavals starkly highlight this profound shift: Leading digitally savvy workers is as much about prioritizing the effectiveness of enterprise values as the value of enterprise efficiency. Digital workers want their values, not just their value, explicitly acknowledged — if not publicly embraced — by top management.

For this report, we interviewed several C-suite leaders, including Starbucks CEO Kevin Johnson, Anheuser-Busch InBev (AB InBev) CEO Carlos Brito, Delta Air Lines CEO Ed Bastian, former Best Buy chairman and CEO Hubert Joly, and Purdue University president Mitch Daniels. These leaders understand and embrace the reality that effective digital transformation can’t work without their own affective digital transformations.

As Joly observes, “All of us have to rewire ourselves for a new way of leading.

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References

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5. K. Rooney, “Coinbase CEO Discourages Politics at Work, Offers Generous Severance to Employees Who Want to Quit,” CNBC, Sept. 30, 2020, www.cnbc.com.

6. S. Denning, “Why Tim Cook Doesn’t Care About ‘the Bloody ROI,’ ” Forbes, March 7, 2014, www.forbes.com.

7. B. Merchant, “Google Says It Will Not Build Custom A.I. for Oil and Gas Extraction,” OneZero, May 19, 2020, https://onezero.medium.com.

8. B. Eccles, “An Open Letter to the Business Roundtable 181,” Forbes, Aug. 19, 2020, www.forbes.com.

9. R. Younger, C. Mayer, and R.G. Eccles, “Enacting Purpose Within the Modern Corporation,” Harvard Law School Forum on Corporate Governance, Sept. 2, 2020, https://corpgov.law.harvard.edu.

10. M. Bower, “The Will to Manage: Corporate Success Through Programmed Management” (New York: McGraw-Hill, 1966).

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