The workforce has never been more global and diverse. Image: REUTERS/Tony Gentile
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Common sense tells us that the digital economy requires a new kind of leadership. Now a study from Oxford Economics reveals the specific leadership behaviors behind the best-managed companies in an era of fast-paced innovation and often surprising disruption. Sponsored by SAP, the study’s findings are based on feedback from over 4,100 executives and employees worldwide. Oxford Economics found a direct correlation between high-performing companies – called “Digital Winners” − and the following practices.
Make digital real: High-performing companies are one and a half times more likely to use technology to knock out the competition with accelerated innovation and collaboration. This study found these high-performers are 38 percent more likely than others to report strong revenue and profit growth.
View diversity as an investment: The workforce has never been more global and diverse. This creates an enormous opportunity for businesses, provided they can cultivate skills and ideas from a wide range of employee backgrounds, perspectives and experiences. Companies with higher revenue and profitability are more likely to have established effective diversity programs (46 percent vs. 38 percent), and to recognize diversity’s positive impact on culture (66 percent vs. 47 percent).
Listen to millennial executives: Millennials already dominate the workforce, and currently hold nearly 20 percent of executive positions. Eager for faster progress on digital transformation, millennial executives are roughly half as likely to say senior leadership is proficient at internal collaboration, managing retention and inspiring employees. Listening to young executives may be a short-cut to digital leadership – but don’t ignore the experience of older peers. Oxford Economics’ earlier Workforce 2020 study revealed the business benefits of inter-generational listening.
Invest in their workforce: Digital Winners have more mature strategies and programs for hiring skilled talent (85 percent vs. 64 percent). They are also 75 percent more likely to provide updated technology to workers. Eighty-four percent of respondents from companies identified as digital winners expect their leaders to develop talent and reward them for doing so. Perhaps not surprisingly, their employees are happier and more loyal, routinely going beyond minimum job requirements.
The study also found too many companies nowhere near prepared to join the winner’s circle. For example, barely half of surveyed executives said senior leaders at their company were highly proficient in using technology. Only about half of executives and employees said mid-level and senior leadership is proficient at managing a diverse workforce. Worse, the higher you go, the less diverse things get. Regardless of gender, executives are unimpressed with diversity programs, with women less likely to call current programs effective (30 percent vs. 38 percent of men).
Old-school decision-making is another particular problem among laggards. Digital winners are 50 percent more likely to say they map decisions to strategy (75 percent vs. 53 percent), and can adapt to real-time decisions (63 percent vs. 46 percent).
Two years ago, I wrote extensively about the Workforce 2020 survey that showed companies headed straight over the “leadership cliff” if they didn’t upgrade the abilities of their executives and employees. This latest study shows the edge of the precipice in sight. I look forward to drilling down further into these findings in the coming months, covering steps leaders can take now to help their companies become Digital Winners.
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The views expressed in this article are those of the author alone and not the World Economic Forum.
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