The vast majority of business chiefs around the world are out of touch with what it takes to lead effectively and for their businesses to stay competitive in the digital economy, with reliance on antiquated leadership approaches undermining organisational performance.
So says a damning report by Cognizant and MIT Sloan Management Review, based on a survey of 4,394 global executives from over 120 countries, supported by executive interviews, and focus group exchanges.
It reveals that only 12% of respondents strongly agree their own business leaders have the right mindsets to lead them forward, and only 9% agree that their organisation has the skills at the top to thrive in the digital economy.
Meanwhile, just 13% strongly agree their organisations are prepared to compete in increasingly digitally-driven markets and economies.
While most (71%) claim to be personally prepared to lead in the digital economy, far fewer possess specific digital skills, such as using data analytics to influence their decision-making (55%) or advocating for the use of machine learning technologies in their organisations’ operations (50%).
Even so, over four in five (82%) agree the new economy will need "digitally savvy" leaders, fewer than one in ten (10%) strongly agree their organisations have the right leadership to thrive in the new digital economy.
MIT Sloan School of Management senior lecturer Doug Ready, who is also guest editor of the report, said: "We are on the precipice of an exciting new world of work, one that gives executives an opportunity to chart a new course for what their leadership should look like, feel like, and be like.
"Yet, our study suggests that digitalisation, upstart competitors, the need for breakneck speed and agility, and an increasingly diverse and demanding workforce demand more from leaders than what most can offer. The sobering data underscores the urgent need for a fully reimagined playbook for leaders in the coming digital age."
The authors identify three categories of existing leadership behaviours:
- Eroding behaviours, or antiquated leadership patterns such as relying upon hierarchy for influence, command-and-control decision-making, and rigid strategic planning;
- Enduring behaviours, evergreen and time-tested leadership attributes and behaviors including ethics, trust, and integrity;
- Emerging behaviours, including digital savviness and collaboration skills.
However, the authors caution that the primary leadership challenges in the digital economy are not solved by merely adopting a group of these behaviours but require developing new mindsets that anchor, inform, and advance these behaviours.
They identified four distinct mindsets that together constitute what they believe are the new leadership hallmarks in the digital economy and illustrate through data and case studies how they can shape successful leadership:
- Producer mindset: The producer mindset combines a focus on customers with a focus on analytics, digital savviness, execution, and outcomes;
- Investor mindset: Leaders with an investor mindset pursue a higher purpose than shareholder returns;
- Connector mindset: The connector mindset demonstrates a mastery of relationships, partnerships, and networks to drive organisational effectiveness;
Explorer mindset: Explorers are curious, creative, and operate well in ambiguous situations. They engage in continuous experimentation, encourage failure, and learn by listening to a variety of voices.
Benjamin Pring, report co-author and director of the Center for the Future of Work for Cognizant, added: "A generation of leaders in large companies are out of sync, out of tune, and out of touch with their workforces, markets, and competitive landscapes. What got them to their current exalted status won’t be effective much longer — unless they take swift action.
"Allowing unprepared senior executives with outdated skills and attitudes to stick around forces next-generation, high-potential leaders to move on to new pastures, which harms morale and ultimately shifts the organisation further away from where market demand is heading."