Poor leadership holding back digital transformation - CBI

David Reed, director of research and editor-in-chief, DataIQ

Poor management practices, including weak or lagging leadership, could be holding back the adoption of digital and data-driven technologies that might help the UK to close its productivity gap with Europe and the US. According to a new study by the CBI, between 10 and 15% of the difference between British and American firms is down to a failure of leadership which in turn means organisations are not innovative.

“It is about culture,” said Carolyn Fairbairn, director-general of the CBI, at the launch of “From ostrich to magpie”. “It is about the perception of risk. Adoption of tried-and-tested technology is less common along the supply chain in the UK than it is in Germany.”

“Leadership development builds the desire and vision to improve adoption.”

As DataIQ has identified with the launch of DataIQ Leaders, its membership service for senior client-side data and analytics practitioners, 45% of respondents in the CBI Innovation Survey said access to leadership and management skills helps them to take up technology and make the most of their investments. The report states that, “leadership development builds the desire and vision to improve adoption.”

At the moment, the UK only rates sixth in the G7 in the World Management Survey for its management. Poor management practices are associated with weaker organisational health, lower aspirations and less capability to reach goals. But adoption of proven management practices could contribute 55% of the £100 billion productivity gain which the CBI has identifed.

“Management practices are a key part of this, for example, strategic planning, risk assessment, scenario planning or employee engagement. These are classic tools that work,” said Fairbairn.

“Benchmarking against the competition is very effective.”

Among the five categories of tried-and-tested technology that the CBI recommends, leadership development, performance management and agile working methods are all at the heart of HR improvements. Chief digital officers and lean procurement are named within operations and strategic options.

Tom Thackray, innovation director of the CBI, added: “Benchmarking against the competition is very effective. You need to ask, how good is the business really?” As part of its strategic recommendations, CBI has joined the Productivity Leadership Group’s “Be the business” movement which is looking to inform, educate and collaborate with UK companies. Members of DataIQ Leaders can carry out their own Capability Assessment benchmark to understand where they sit in terms of data and analytics adoption.

Part of the challenge for lagging businesses is how to tap into the innovation culture. The CBI noted the UK’s leadership compared to France and Germany, but also pointed to a gap between those in the vanguard and those sitting behind them.

“We need a culture change to encourage innovators and start-ups not to think about traditional industry as a place they don’t want to go, but to see them as a new horizon,” said Fairbairn.

Related articles: UK plc needs magpie-like tech strategy for £100bn uplift

Director of research and editor-in-chief, DataIQ
An expert commentator on all things data, David has been editor of DataIQ since its inception in 2011.

Sign-up to hear about the latest DataIQ news, content and events.