Heuristically, many of us could probably guess that many of our leaders today are ill-equipped for the digital age they find themselves in, but this was confirmed by a new report from MIT Sloan Management Review and consulting firm Cognizant, which found that far too many executives today are out of touch with just what it takes to lead effectively in the digital economy.  They rely on outdated and ineffective leadership styles that diminish the performance of the companies they lead.

“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,” the authors say. “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 report, which saw several thousand executives from over 120 countries quizzed, revealed that just 12% thought their leaders had the right mindset, and 9% the right skills to thrive in the digital economy.  Perhaps an illustration of the problem was the simultaneous finding that 71% of respondents thought they themselves were ready and able to do a great job, so many appear to believe the problem lies elsewhere in their organization.

A new way of leading

Salvation is offered, as it so often is, by a second report, this time from consulting firm Accenture, which also highlights the struggles executives are having in getting the most out of the latest technologies.  As with the MIT/Cognizant paper, it found that just 10% of companies are making the best use of technologies such as AI, cloud and blockchain.

“Most companies are risking significant future revenue growth because of the gap between the potential and realized value of their technology investments,” said Paul Daugherty, Accenture’s chief technology and innovation officer. “Our report offers CEOs a new roadmap to help make strategic investments that narrow this innovation achievement gap and fuel higher growth.”

Accenture identified five factors that they believe are key to digital success, and which distinguish those at the head of the pack from the laggards behind:

• Progress: The extent to which companies apply new technology to evolve business processes across the enterprise. One example is the use of cloud and artificial intelligence (AI) to increase the effectiveness of multiple business processes rather than working in silos.
• Adaptation: Ensuring that IT systems can adapt and respond to changing market conditions with actions such as decoupling from legacy systems and using cloud services as a catalyst for innovation.
• Timing: Creating an appropriate sequence and roadmaps for deploying new technology. This begins with identifying foundational technologies and prioritizing adoption based on their enterprise-wide impact.
• Human+machine workforce: Using technologies to augment employees and make work more engaging while simultaneously realizing efficiency gains. This could entail delivering technology-augmented training that is personalized and experiential for working with technologies of the future.
• Strategy: Actively aligning business strategy and IT strategy and weaving technology investments together to better seize opportunities.

“Companies that are not actively building enterprise-wide systems that are fully optimized for all of the rapidly-maturing technologies will find it difficult to catch up, and will see that reflected negatively in their financial performance,” they conclude.