DIGITAL LEADERSHIP Metrics And Beyond
The evolution of Leaders: The new Avatar of Leadership
With the world becoming flatter through technological advances and agile processes, leadership finds it arduous to accomplish effective results through the command-and-control approach while executing organisational strategy. Successful organisations of today are developing, and at the same time, emphasising the importance of leadership at every level, where highly cross-functional teams effectively collaborate with efficiency and measured results.
“Organisations need to build a new breed of younger, more agile, ‘digital-ready’ leaders.”
The Digital revolution has dramatically altered the leadership skills and behaviours needed to succeed in a post-digital landscape. Leaders bring in personal experience and their unique personalities to the way they lead within an organisation. But, today’s leaders need to know the ways of adapting their personal knowledge and experience as per the needs of individual contributors of today. They are required to continually engage the individuals they are attempting to influence through regular, focused, one-on-one conversations.
In the earlier days, high performance on execution, strategic and business acumen, and becoming successful were the defining traits of a good leader. Thereafter, it was realised that leaders also need to be emotionally intelligent, self-aware, and must build healthy, innovative teams through trust and conflict management. Today, we need digital leaders who have a deeper understanding of the digital age, its disruptive technology trends, and its impact on organisational culture.
What do they need to do?
Good leaders remain cognisant of the very juncture that needs them to adjust their approach, and are able to adapt to the ever-changing demands of the workforce. Leaders of 2020 will have a vested interest in helping employees thrive in every aspect of their lives, which works to create enhanced engagement, productivity, and happier employees overall. The below mentioned aspects are what is expected of them.
Create Brand Ambassadors: Digital Leaders see every employee as an opportunity to provide market insights into the culture, quality, and standards of the organisation. By leveraging social media, every employee can become an ambassador. Employees can amplify those messages, since they are more authentic and believable.
Implement Agile Talent: With the advent of freelancers and remote work, companies will be transitioning more towards the implementation of policies and procedures to work with agile talent. Leaders will need to train their managers to effectively onboard and utilise agile talent to complete projects.
Create a customer-centric business: With robust customer feedback mechanisms and reporting, there is hardly any excuse for not adapting to what customers really want today. Customers are no longer loyal to a brand; they are loyal to experiences that work for them. Hence, mere leader-talk will not do the trick and they must also walk the talk.
Be an empathetic Leader: Value-driven Gen Y and Gen Z talent will continue to leave command-and-control cultures for collaborative workplaces. The value of leadership empathy was sky-high in 2018. The ability to understand, relate to, and be sensitive to employees, colleagues, and communities will be paramount. Leaders have to set a culture of listening, relating, and coaching to drive effective leadership.
Focus on individual growth: With the myriad options available for self-learning, customised learning interventions, and personalised career paths, employees must have strong support from their leaders to encourage and be a part of their learning journey.
Think like Venture Capitalists: Leaders have to constantly explore the forefront of technology and test how it can improve business. They need to understand the valuation game and know how investors think. They have to create a roadmap and a winning digital strategy to set the pace for change.
Embrace work-life blend: Companies must recognise that work-life blend is the key. Beanbags and ping pong tables do not excite employees any longer, and leaders will have to create jobs and schedules that allow their workforce to blend their work and lives better to reduce burnout and increase output.
Metrics and Beyond
Today, the array of available technology and the emerging tech trends can simply be too overwhelming for an organisation. Hence, it is best to find solutions to the very problems that the organisation would like to solve - and keep only those in focus, rather than trying to work all the tools available by the vendor suite. This is akin to a à la carte (ordering dishes from the menu) as opposed to table d'hôte (a buffet).
Predictive analytics tools from multiple vendors make it possible to analyse data pertaining to recruitment, performance, employee mobility, and other talent-related aspects. Managers now have access to a seemingly endless combination of metrics to help them understand, at a far deeper level, what drives results. For instance, Google’s Project Oxygen uncovered the practices of the tech giant’s best managers and then used them in coaching sessions to improve the work of low performers. Dell’s experiments with increasing the success of its sales force, as also various other case studies, give an indication of the power of people analytics.
Paul Leonardi and Noshir Contractor, in their article in HBR, have shared the findings of a research that states that people analytics has so far focused mostly on employee attribute data, which fall into two categories:-
● Trait: Facts about individuals that do not change, such as ethnicity, gender, and work history.
● State: Facts about individuals that do change, such as age, level of education, company tenure, value of received bonuses, commute distance, and days absent.
The two types of data are often aggregated to identify group characteristics, such as ethnic makeup, gender diversity, and average compensation. Attribute analytics is necessary, but insufficient. Some key attribute analytics metrics that every leader should be aware of have been cited below.
• Time to start: This is a metric that can provide insights on the effectiveness of the employment brand, marketing efforts, and application process. "High" numbers can also provide perspective on the interviewing process. This might be indicative of a lengthy application process, too many interviews, or a weak candidate experience.
• Time to Productivity: This is a vital indicator to the effectiveness of the onboarding programme. Also, the outcomes can be an indication of the quality of the recruitment process, and the calibre of the applicants who are being hired.
• Turnover rate: Turnover rate during a specified period (a year, quarter, or month), and focused on a target group (e.g., high performers, Millennials, low performers, or critical positions), can provide insights on the effectiveness of performance management, development, or culture initiatives.
• Cost Per Hire: Higher external cost could be an indicator that the leadership needs to invest in internal recruiting resources such as training or technology, hire an extra recruiter, or re-evaluate the mediums selected to market the positions.
• Acceptance Rate: Acceptance rates indicate whether the organisation needs to improve their candidate experience, benefits package, or the competitiveness of the offers.
• Revenue per employee: The most powerful measurement for the C-suite is the Return on Investment (or lack thereof) for those employees.
• Training Participation Rate: This helps determine if the L&D offering has the "right" type of training, and also if they are using the best delivery medium.
• Training RoE: This helps determine if the L&D offering has managed to successfully provide learning in line with the business requirement.
• Average Performance Rating: Tracking this metric gives the leader an insight on the effectiveness of the performance management programmes.
• Employee Engagement: Calculating engagement is tricky. Most organisations invest in a third-party resource that typically includes an extensive survey. A high level of engagement is a critical trait found in high-performing organisations.
Relational analytics is the science of human social networks. Relational data captures the communications between two people in different departments in a day. Decades of research have effectively demonstrated that the relationships employees have with one another as also their individual attributes can explain their workplace performance. The key is to ascertain “structural signatures”, patterns in the data that correlate to some form of good (or bad) performance. Just as a chemist can look at the structural signatures of a liquid and predict its kinetic fragility, organisational leaders can look at structural signatures in their companies’ social networks and predict how creative or effective individual employees, teams, or the organisation as a whole will be. HBR researchers have identified six structural signatures that should form the bedrock of any relational analytics strategy.
Ideation signature focuses on the individual, and helps in predicting which employees will come up with innovative ideas. Employees with lesser constraints, who communicate with people in several other networks besides their own, are more likely to gather novel information that can be developed into good ideas. On the other hand, employees who communicate only with people within their network, are less likely to generate ideas, even though they may be more creative.
Developing a good idea is no guarantee to the fact that it will be used by people. Similarly, a decree issued by a manager for change is no guarantee that the employees will implement it. Implementation of ideas involve influence. Research indicates that employees are generally not influenced, either positively or negatively, by the company’s senior leadership. Rather, it is people in less formal roles who sway them the most. This signature focuses on the individual, and helps in predicting which employee will change others’ behaviour.
Attribute analytics can help identify skilled people, but it does not ensure that their tasks will be accomplished by the deadline. In order to do so, leaders require relational analytics measuring team chemistry and the ability to draw on outside information and expertise. This signature focuses on the team. It helps in predicting which team will complete their projects on time.
Teams with the efficiency signature would most likely fail as innovation units benefit from some disagreement and strife. Innovation signature also focuses on the team and helps in predicting which teams will innovate effectively. Most teams are created with a careful examination of attribute analytics such as the right functional backgrounds, past record of innovative work, diversity in backgrounds, and age groups. However, all this diversity also sometimes does not yield innovative ideas needed by a company.
It has been revealed in a research finding that the managers of an automobile company in India could not build a demographically diverse team, since all the centre’s engineers were roughly the same age, had similar backgrounds, and were about the same rank. So, the managers instead chose engineers who had worked on projects at different office locations, and worked in different areas of the centre, thereby creating a team that naturally had a higher external range. It so happened that the team members felt free to debate, and ran tests to resolve differences of opinion. Once they devised a new procedure, they went back to their external connections, using them as influencers who could persuade others to validate their work.
Everyone hates silos, but they are natural and unavoidable. As organisations develop deep areas of expertise, almost inevitably, functions, departments, and divisions become less and less able to work together. They do not speak the same technical language or have the same goals. The focus of this relational signature is the organisation, and it helps in predicting whether an organisation is siloed. And the degree to which it is siloed is measured by its modularity. Simply said, modularity is the ratio of communication within a group to communication outside the group. When the ratio of internal to external communication is greater than 5:1, the group is detrimentally siloed.
In Quotes “Modularity is the ratio of communication within a group to communication outside the group. When the ratio of internal to external communication is greater than 5:1, the group is detrimentally siloed.”
Although having people who can help move information and insights from one part of the organisation to another is healthy, overly relying on such individuals can make a company vulnerable. The focus of this relational signature is the organisation, and it helps in predicting those employees which the organisation cannot afford to lose. While several market vendors are doing a great job at helping leaders with attribute analytics, they do not identify the patterns that predict performance. Most organisations do not have the information systems in place to capture relational data. But all the companies do have a crucial hidden resource, their digital exhaust, the logs, e-trails, and contents of everyday digital activity. Every time employees e-mail each other in Outlook, message each other on Slack, like posts on Facebook Workplace, form teams in Microsoft Teams, or assign people to project milestones in Trello, the interactions are recorded by the platforms. This information can be used to construct views of employee, team, and organisational networks. Some employees feel that the passive collection of relational data is an invasion of privacy. This is not a trivial concern. Companies need clear HR policies about the gathering and analysis of digital exhausts that help employees understand and feel comfortable with it.
Contemplation of attributive analytics will take leaders and their organisations only to a limited distance. If they harness relational analytics, however, they can estimate the likelihood that an employee, a team, or an entire organisation will achieve a performance goal. The best leaders will harness the use of relational analytics to augment their own decision criteria, and build healthier, happier, and more productive organisations.
Focus on Indian Leaders: Korn Ferry Institute
Korn Ferry’s analysis has made a sample comparison of over 2,600 Indian leaders to the digital leadership profile. The findings suggest that Indian leaders need to embrace a radical shift in mindset to enable real and sustainable digital change within their organisations. Indian leaders struggle to adapt to change, being more comfortable in certain conditions. This limits their capacity to be flexible in the ambiguous digital environment. Increasing their comfort level here will be essential for leading in the digital age. It will also help them to develop a strong vision for the enterprise’s digital future and arm them with the confidence to make risky decisions needed to get there.
HR data analytics can help provide organisational leaders with important information on market compensation, engagement, culture, and workplace demographics. Organisations with cutting-edge capabilities in HR analytics can increase their understanding of costs, hiring trends, and attrition. They have a better grasp of underlying economic factors, can leverage an array of data to model, and can display scenarios to help the business plan with greater accuracy. These analytics capacities also apply to issues such as employee engagement (as determined in workplace surveys), giving CEOs, CHROs, and other C-suite executives a deeper insight and greater impact on the attraction-attrition of talent, the changes in the workforce that may jeopardise the business plan, and what talent is needed to meet the strategic plan.
The making of a successful Digital mindset
A successful digital mindset requires the leader to be tech-savvy, data-driven, and to inspire teams to drive transformation and business outcomes through experimentation and multiple iterations. Here are a few hallmark skills in a successful digital leader.
Transformative vision and forward-looking perspective
Providing vision and direction have been long-standing essential components of leadership. But in a digital environment - with the emphasis on future change - they take on new significance. The key might be to work on things that are likely to be relevant to many possible futures.
Understanding technology is an important and imperative skill for leaders. Leaders need to have general digital literacy, as opposed to hard-core technical skills like programming or data science. Digital literacy is critical for two reasons. First, it supports the first two leadership skills cited: having transformative vision and being forward-looking. A leader who is not digitally literate will struggle to remain abreast of emerging trends and developments and will fail to grasp how those trends can bring new value or represent a threat to the organisation. Second, understanding at a high level how technology does (or does not) work enables leaders to make more informed decisions in an uncertain environment.
Placing value on trend researchers and tracking trends
The digital landscape for employees, supply chains, and customers is witnessing a constant shift. If a leader is investing in major strategic improvements from real-time communication to a wave of office closures to BYOD services, they must be fully aware as to what is being done by the other organisations, as well as what the “future watchers” are predicting. This cannot protect them from obsolescence, but it can help them reduce the risk of being left behind.
Tied for the third most important capability, a leader must also be change-oriented, i.e. open-minded, adaptable, and innovative. Similar to digital literacy, this skill supports other traits reported as valuable. It helps leaders respond to a fluid environment and change course if the technology and market environments evolve in unanticipated ways. This mindset also enables a digital leader to continually update his or her knowledge repository to account for changes in technology and avoid obsolescence.
Becoming a successful Digital Leader Having a digital transformation strategy
New age digital-driven start-ups are creating and attacking new markets in every sector. Companies will now have to compete as well as collaborate with other companies to create and capture value. Here is what the leader must do to execute a digital strategy across the organisation.
● Know the process of reframing a business question as a data question
● Reason as to what data might be of assistance
● Know how to obtain the data
● Integrate and clean the data
● Perform analysis
● Derive and communicate insights from the analysis
● Build the managerial culture to operate in this way
● Create competitive advantage from enterprise data.
Exploring a platform strategy for the business
The economy is shifting towards platform ecosystems. Platform ecosystem companies are fundamentally different from product companies. Leaders will need to evaluate if a platform model will make sense for their business. From this lens, they will need to re-evaluate factors like information, asymmetric pricing, and intellectual property. Mobility is evolving and embracing wearable technologies, and the cloud is evolving and embracing broader concepts such as hybrid IT and software-defined data centres. These key disruptive technologies now serve as the foundational building blocks of mature as well as emerging organisations in the new digital business platform ecosystem of on-demand services.
Mastering the digital services lifecycle
The next step for the leader is to consider the “how” as well as the “what.” It is no longer sufficient to have an innovative set of products or services (the “what”); the leader has to champion and be a master of how to design, develop, deploy, manage, and continually evolve digital services. Mastery of the digital services lifecycle is going to become a key competency for leaders to grow their business and build sustainable competitive advantage in the years ahead.
Executing an agile journey to the future platform
Finally, when taking the journey to a new platform, it is important to bear in mind that we live in a hybrid IT world. Leaders need to take the journey to the future platform, while supporting and maintaining their existing applications and infrastructure. While some elements may be retired or modernised, other elements may need to co-exist and be integrated into the new platform.
The most critical need for organisations is for leaders to develop digital capabilities. However, it is hard to get there. A research finding by Deloitte on digital leadership shows a shift in leadership capabilities in three areas - how leaders must think, how leaders must act, and how leaders must react. Leaders are now expanding the digital footprint across the entire global organisation, allowing it to quickly compare ratings of potential leaders, by placing all leaders on a level playing field, regardless of function or region. This approach establishes a standard, consistent language for identifying potential across the global organisation. It also helps the organisation to uncover “hidden gems” in unexpected places.
“A research finding by Deloitte on digital leadership shows a shift in leadership capabilities in three areas - how leaders must think, how leaders must act, and how leaders must react.”