Look around at how the companies you know function today. The modern business environment is in a state of constant change. In the past decade we have seen innovations such as the smart phone and social networks changing how people communicate, learn, work, and even find a partner. People have changed, but companies are playing catch up.
This wave of change is forcing major companies to constantly to be more innovative and relevant in an unforgiving market. Start-up companies can launch new products globally via the app store creating an environment where executives don’t even know who their competition will be next year because they may not even exist – yet.
For proof of just how much is changing, consider some of these facts about well-known digital brands:
- Airbnb is the world’s largest accommodation provider yet they own no property
- Facebook is the world’s largest media company (they still deny this), yet they generate no content
- Skype is the largest global telecom provider, yet they have no telco infrastructure
- Netflix is the largest movie house yet they have no cinemas
- Uber operates the largest taxi fleet in the world yet they own no taxis
We are witnessing the Fourth Industrial Revolution. This wave of disruptive technology – led by robotics, Artificial Intelligence (AI), the Internet of Things (IoT), and 5G – will change production, management, and governance in every company in every industry. In many cases, the change has already arrived.
In a business environment characterised by continuous innovation many organisations will struggle. Financial service companies are known for trust and reliability. Change doesn’t come easily to a bank or insurance company with a large network of branches, legacy infrastructure going back several decades, and a regulated trading environment. But then a new insurance company launches using an app and offers to pay home insurance claims in an average of 3 seconds. How does a heritage brand compete with that?
It was Heraclitus who first said ‘change is the only constant’ in around 500 BC. Little did he know that his words would feature on just about every business plan in the 21st century.
It would be arrogant to suggest that I, or any other commentator, can see into the future, but it is clear that in this type of hyper-accelerated environment leaders need the ability to test ideas, adopting those that work and quickly move on from failures. Human ingenuity will be the difference between success and a place in the history books.
Companies facing digital disruption will also face internal disruption to the traditional structure of departments and fixed responsibilities. As a psychologist this fascinates me. We can see that companies need to approach their industry in a more innovative way if they want to remain relevant – or even survive – but what does this mean for the employees and how leaders lead? What is the human impact of transformational change when it is applied to businesses and entire industries?
The most obvious change that is needed is cultural. It is the role of the leader to create the culture and a climate for success that drives organisational performance. Companies need to cast aside their traditional structure and prepare for the digital age by developing their leaders, people and a pipeline of current and future talent. As well, a mindset and culture of lifelong learning will also play a role as an integral part of a job, rather than being in addition to a job – skills date quickly in a constantly changing environment so this is about more than just career development, the workforce needs to be ‘future ready.’ It’s also about taking time out for reflection and time out to learn and to embrace the learning cycle., Leaders need to encourage a culture that embraces innovation and experimentation within clear parameters. They need to understand how to change course quickly and optimise new opportunities.
Emotional intelligence is fundamental for great leaders enabling them, amongst many things, to be inclusive; to create teams that collaborate and work together, pulling in the same direction. They also need to be compassionate to support the organisation and its people in the face of rapid change and overwhelm because it can impact mental health which is critical when you consider 1:4 people have mental health issues and 1:3 GP prescriptions are mental health related. Leaders need to take time to have meaningful leadership conversations with their people and teams if they are to lead change and transformation successfully. They need to manage their own energy and be custodians of the energy of the organisation.
Leaders also need to create a high trust culture because trust lies at the heart of creating a culture of safety, courage, creativity, risk-taking, making mistakes, accountability and ownership. Digital cultures need to create a culture of its ‘ok to make mistakes’ and to fail fast otherwise risk taking and creativity won’t happen. There needs to be this psychological safety and trust.
As we go further into this digital revolution it is clear, and this is backed up by research, that leaders need business skills, problem solving abilities, the ability to communicate powerfully, coaching and engagement skills, critical thinking, creativity, and emotional intelligence to thrive and survive – in addition to a big dose of humility where they are happy to learn from their team and colleagues, harnessing the collective energy and wisdom of those around them for the greater good. The world of work is becoming boundary less and a collective leadership mindset is critical for business success.
One interesting effect of digital disruption is that it has the opportunity to encourage more inclusion and diversity. The workforce of the future will be one made of people who are employed, work virtually and contractors. The workplace will look and feel very different to what it does now. This flexible workforce will enable more people from all walks of life, backgrounds and physical abilities to be part of the new digital age thereby creating a rich and diverse workforce which will help the talent pipeline that CEOs have sighted as one of their major challenges in competing in a digital world.
The heart of the digital revolution is digital dexterity which I believe is driven based on the development and growth of individuals — their ability to take these advances and changes and to apply them within the context of an organisation and then to drive the business forward. It requires Conscious Leadership, leaders who have emotional intelligence, who consciously create high trust environments, have conversations that matter, are focused, manage their energy and are custodians of the energy of the organisation as well as lead with compassion. They have a collective leadership and life learning mindset, are comfortable with being vulnerable, are able to resource themselves and others and they are humble.
About the Author
Nicky Pharoah, Managing Director at The Learning Curve
Nicky is an Organisational Development (OD) expert with extensive experience of psychotherapeutic application in the workplace. Drawing on over 30 years’ operational experience within market-leading companies both in the UK and internationally, Nicky blends intuition and in-depth behavioural insights to make a lasting difference for clients.
TLC’s focus and raison d’être is to work with organisations to develop leaders and transform cultures, based on principles of “Conscious Leadership” – both a mindset and an advanced leadership capability centred on an understanding that our actions and behaviours impact ourselves, our colleagues and ultimately how well an organisation performs. Our services include bespoke Leadership Development, Cultural Transformation, 1:1 and team coaching, and 360-degree feedback implementations.
Founded in 1997 and headquartered in the UK, TLC works in both private and public sector organisations, in the UK and internationally.