Leadership 4.0: Are you Ready to be a Digital Leader?

By: Prof. Sattar Bawany, Managing Director, EDA Asia Pacific & C-Suite Master Executive Coach

“In recent times, the world has moved well beyond basic and enhanced process automation and is entering an era of cognitive automation leveraging artificial intelligence and robotics, which the World Economic Forum termed as the “Fourth Industrial Revolution”. To ensure their readiness toward digital business transformation, most organizations would deploy the state-of-the-art technology, but do they have a relevant structure in place? Are they equipped to attract, develop, and retain digital talent? Do you know what it takes to lead in a digital era? These are questions that many, if not all, organizations are grappling with as they seek to succeed in the digital era.”

– Prof. Sattar Bawany (2018a)

Leading the Digital Transformation of Organizations, Expert Insights Series

Leadership 4.0 is about leaders creating their own digital transformation strategy and ensure it is aligned with the business and growth plans of their organization. It is critical that there must be a commitment to and ownership of it by the various stakeholders including the boards and senior leadership team. For those willing to embrace this new world, it presents huge opportunities to be leveraged, which offers the prospect of new markets and new customers. However, to accomplish this, it would be crucial for the next generation of leaders to develop the relevant knowledge and skills, and that will help them evolve into a digitally transformed leader.

Leadership 4.0 is also a “digital leader” who can build teams, keep people connected and engaged, and drive a culture of innovation, risk tolerance, and continuous improvement. As digital disruption sweeps across every major industry, regrettably leadership capabilities are not keeping pace.

As part of the cognitive transformation, digital leaders who think differently by applying innovative thinking to their managerial leadership challenges is one step in creating an innovative, organizational response to changes resulting from Industry 4.0. What is required is to develop a culture of innovation, where others throughout the organization apply innovative and creative thinking to solve problems and develop new products and services.

Studies have shown the climate for creativity in organizations is directly attributable to leadership behavior. What this means is that leaders must act in ways that promote and support organizational innovation by demonstrating specific competencies, skills, and behaviors known as cognitive readiness that would support an innovative and knowledge-driven learning organization (Bawany, 2016). This new normal is challenging leaders to find new ways to lead their organizations and achieve sustained success, as reflected in the 2019 Trends in Executive Development Benchmark Report.

The impact of digital disruption must be managed alongside the more general volatile, unpredictable, complex, and ambiguous (VUCA) operating conditions of recent years. An ability to calculate and manage/mitigate risk will, therefore, be another key requirement of leaders seeking to propel their organizations into the digital age. Navigating a course through these difficult conditions may also force leaders to look at their individual leadership style and decide whether it needs to be adjusted.

Embrace and Encourage Innovation

Corporations need to offer some flexibility in order to be able to adopt digital platforms and strategies. Great talent thrives on impact and innovation—the same things a company needs to survive in the future. If a company prioritizes its processes over smart and impactful contributions, it is setting itself up to lose creative up-and-comers, not to mention potentially falling behind the competition. Innovators and change-makers set bold ambitions and work on the edge of possibility. Employees working in the trenches often find the most efficient solutions, and it is often best to follow their lead.

Be open to creative employee solutions and a good leader needs to be open to that kind of innovation rather than trying to put limits on innovation. For example, at Google, one of its most famous management philosophies is something called “20% time”. Employees are encouraged to spend 20 percent of their time working on what they think will most benefit Google, in addition to their regular projects. This empowers them to be more creative and innovative. In some ways, the idea of 20 percent time is more important than the reality of it as it operates somewhat outside the lines of formal management oversight, and always will because the most talented and creative people can’t be forced to work.

Set the stage for innovation by breaking down barriers and empowering your workforce. Give employees the opportunity to venture out of their standard career paths and customize their jobs to align with their personal and evolving skill sets, interests, and career goals. Provide a more open work environment with increased information transparency and trust in expertise by changing the default content and process working mechanisms from private to public.

Transformation with Executive Coaching Support

Successfully driving a digital transformation at your organization requires rethinking your leadership talent. Innovative digital technologies like chatbots and AI that deliver real-time data insights are rapidly disrupting the way companies develop and sell their products or services. Organizations that stay ahead of this digital revolution will be the ones that capture higher profits and market share. However, you’ll need a new kind of “digital leader” at your organization capable of driving this kind of transformation with a proven and time-tested organization development intervention such as executive coaching.

Executive coaching focuses on developing a top executive’s full potential by coaching them to think and act beyond existing limits and paradigms (Bawany, 2018b). Executive coaching is one of the most highly individualized forms of leadership development and support available because it is based on the understanding that in order to be maximally effective, executives must accurately identify their strengths and areas of development, examine the impact of their behavior on others, and regularly and intentionally reflect on their values, goals, and effectiveness.

The development of digital leaders includes the process of transitioning them effectively into this ‘new’ leadership archetype. This could be smoother if the new digital leaders develop a sense of optimism, monitor, and manage their outlook and perspective in managing the insurmountable challenges that they face in the highly disruptive, innovative and digital-driven business environment. The digital leaders could potentially manage these challenges by developing the next generation leadership competencies which include cognitive readiness skills by leveraging on executive coaching alongside the traditional elements of leadership training, executive education, tools, and systems which are also very important. However, without the right outlook, new and even veteran leaders will experience serious difficulties and unrest.

Leadership 4.0 is, in fact, more important in times of change than at any other, but its nature has perhaps changed somewhat to take into account the more collaborative nature of the digital workplace. The digital revolution not only opens up new opportunities for how organizations arrange work and structure themselves, but it also leads to new ways of working and leading high-performing teams.

Though some traditional leadership capabilities still remain critical to successfully leading in the digital era (e.g., creating and communicating a clear vision, motivating and empowering others, etc.), there are also new requirements for leaders at all levels of the organization. These demand a dynamic combination of a new mindset and behaviors, digital knowledge and skills that are critical to leading teams in the digital era.

As digital impacts the entire organization, it requires effective leadership at all levels to drive the digital strategy going forward. As digital transformation expands across the organization and the “war for talent” continues, organizations need to consider a more structured approach to building a healthy leadership pipeline with the necessary capabilities to lead in the digital era. They can do this by placing potential leaders in positions that stretch them beyond their current competencies and skills, to coach them and support them on building new digital capabilities as rapidly as possible.

Maybe one day in the future everyone in every organization will be a leader, but for now, the traditional practice of leadership remains as vital as it ever was.

About the Author:

Professor Sattar Bawany is the Managing Director & C-Suite Master Executive Coach with Executive Development Associates (EDA) in Asia Pacific. He is also the Chief Executive Officer of the Centre for Executive Education (CEE). EDA is the Strategic Partner of Centre for Executive Education (CEE) in offering a suite of Executive Development solutions in the Asia Pacific region.

Prof. Bawany is also an Adjunct Professor of Leadership and member of the Advisory Board of the Curtin Graduate School of Business (CGSB) of Curtin University, Australia.

His latest book on “Transforming NextGen Leaders: Meeting the Leadership Challenges in the era of the Fourth Industrial Revolution (Industry 4.0)” will be published by Business Expert Press (BEP) LLC in New York in March 2019.