Whether you’re the CEO of a global bank, the founder of a venture-backed startup or a team member on a transformation initiative, you should be concerned about how to lead in a digital world. It’s not just that the rules of leadership are changing—everything is in flux, and purely analog environments no longer exist.
Because I’m an advisor to financial institutions, I often receive the question of what defines digital leadership. As I see it, the issue isn’t academic or semantic, but a matter of practice and value. Digital leaders—both individuals and organisations—demand a premium because they evolve stagnant (and often outdated) beliefs and behaviours.
This leadership is particularly crucial in banking, in which both incumbents and new entrants face mounting pressure to meet the needs of 21st century consumers. More often than not, organisations must adapt to a new paradigm in ways that feel uncomfortable within the banking world, even though they’re already established in adjacent sectors.
Here are three ways to put digital leadership into practice.
- Digital stewardship: know your stuff.
Financial markets are essentially zeros and ones, and banks are investing billions in digitally transforming their infrastructure. Depending on which report you read, however, only 6 to10 percent of the directors overseeing the world’s financial institutions have previous digital experience.
I’m not the first to liken culture to the operating system of a company (Mike Walsh and others have written about this topic in depth). I look at our financial institutions and worry that most are running the organisational equivalent of MS-DOS in 2017. How can your leadership team write a 21st-century company’s playbook without competence in at least some of these domains? I’m referring to:
- Exposure to methodologies such as agile, lean, and design and systems thinking (at minimum, a hacking and tinkering mindset);
- Experience with modern coding languages such as Python and Ruby;
- An understanding of cloud computing and service-oriented architecture;
- A basic knowledge of APIs (application program interfaces) and algorithm design;
- An appreciation for cyber-ethics, security and data privacy
- A grounding in social media and network economics;
- An awareness of rapidly transforming technologies, including virtuality and robotics, along with more esoteric movements such as transhumanism.
The solution isn’t simply to recruit one or two directors from an influential technology company. Because digital is so far-reaching, you can’t afford to create limited pockets of know-how. Managing digital change requires prioritizing digital stewardship at the board and executive levels—not just within dedicated digital teams.
Disney is a good case study in digital stewardship embedded at all levels of the organisation. The entire company has bought into CEO and President Bob Iger’s belief that “technology is lifting the limits of creativity and transforming the possibilities for entertainment and leisure”.
This commitment has translated into a coherent strategy that touches every part of Disney’s business, starting at the top. The company has appointed a number of heavyweight digital gurus, including Jack Dorsey (Twitter, Square), Sheryl Sandberg (Facebook) and John Chen (Sybase) as board members. In addition to bringing in team members with real technical experience and fluency, Disney promotes digital stewardship from within. The rigorous Disney training program is designed to develop relevant skills and competencies for more than 70,000 employees. This means Disney’s digital mindset informs the experience in its 28,000 hotel rooms, and in every park and attractions site, which are all equipped to deliver a magical on- and off-line experience to every guest who walks through Disney’s doors.
The expertise Disney has introduced and fostered, in the form of both talent and training, has created a culture of digital stewardship that wouldn’t be possible through technology alone.
- Decentralised decision-making: wield power by giving it up.
Committing to decentralised decision-making is another key component of digital leadership. It places accountability where the information pool is richest—which is not always at the top. Doing so optimises information flows, improves responsiveness and empowers people to impact the matters that are most relevant to their purview and expertise.
This shift from consolidated to decentralised decision-making is particularly crucial today. Between 50 and 80 percent of all jobs in financial services will be affected by technological change in the next two decades. The impact on business models, competition, regulatory demands, and changing customer needs and expectations will be dramatic. The changes ahead will be astounding in their speed, complexity and unpredictability.
In this environment, businesses need to be able to make decisions quickly and effectively—in an agile fashion, a digital leader might say—without having to wait months for approvals to go up and down traditional chains. The old “command and control” structures prevalent in today’s banks will prove to be wholly ineffectual in our new digital world.
I’ve seen particularly effective examples of decentralised decision-making frameworks at the front end of customer interactions. In cases such as customer support, information flow is contextual and immediate. Slack, the corporate messaging platform, exemplifies this kind of decentralization. “Everyone does support” is a corporate mantra—so designers, developers and product managers work alongside customer-support agents to address issues and respond to questions. In addition to reducing the time it takes to resolve customer concerns, Slack’s commitment to downstream decision-making helps employees build empathy. Product teams hear from customers firsthand and learn about their problems as they arise. Because of this exposure, they can make appropriate and timely product decisions informed by their experience communicating directly with the product’s end users.
Decentralisation isn’t just a strategy employed by startups and enterprise software companies. Suncorp, one of Australia’s largest financial institutions and brands, has also embraced a culture of bringing decision-making right to the front lines. Last year, Suncorp built and tested a decentralised work platform to support new organisation-employee relationships.
First, Suncorp gave its customer-service reps the tools and space to self-organise. Call-centre employees use a blockchain-enabled platform to collectively determine their working hours, schedules and practice routines, allowing them to better meet customer call demands. This open-source scheduling experience also promotes transparency and a sense of community among participants. As a result, Suncorp’s decentralized work platform has substantially improved call-centre performance metrics and deepened engagement as measured by reduced employee attrition.
It’s more apparent than ever that you don’t have to be a startup to embrace the benefits of decentralised decision-making. But your commitment to digital leadership can go even further downstream.
- Followership: lead by connecting and influencing, not controlling.
Followership is a new measure of leadership. It isn’t about consensus, nor is it about control—it’s about influencing the mind of the organisation. According to Esko Kilpi, a researcher and consultant who specializes in postindustrial organisational design, followership is about creating space for everybody to be heard and then rallying around the best answer—which is not always yours.
Developing followership requires a particular set of qualities:
- Seeing patterns as they emerge,
- Actively tuning in to formal and informal information flows,
- Facilitating the exchange of ideas and data.
Unlike digital stewardship, followership does not require technology expertise. Instead, it requires an expanded capacity for soft skills and creativity, an appetite for risk and accountability, a preference for cross-functional cooperation, a hunger for learning, a commitment to rapid experimentation, and a heavy investment in talent development.
The traditional notion of leadership is based on asymmetric power relations. Truly digital ways of operating challenge such structures; “digitising” a company inherently involves dismantling Industrial Era hierarchies in favor of networks.
Network relations are typically more symmetric than these traditional hierarchies, with more interdependency and redundancy. And while there will always be some degree of asymmetry, in networks, hierarchies are contextual and dynamic. They assemble, disassemble and reassemble as required to get the job done.
An interesting thing happens as a company commits to followership. As the organisation begins to see itself as a collection of nodes, its relationship to the broader external network of industry players also changes. The traditional silos inside and outside of the company begin to fall away in favor of more porous interfaces with what was previously considered “the outside world”.
At Adobe, the software-as-a-service enterprise solutions provider, most of the company’s offerings have long shifted to the cloud. This has transformed every part of Adobe’s business, from product design to sales, to marketing and support. Adobe’s leaders strongly believe that people and products had to be fused together.
To foster that connection, Adobe took the bold step of putting employee and customer experience under the same organisational umbrella led by Donna Morris, executive vice president of customer and employee experience. “We have had a long-standing commitment to investing in our employee experience,” she noted in the MIT Sloan Management Review. Morris has been key in influencing the organisation to embrace the concept that all employees contribute to the customer experience —and customers have something to say about the employee experience, too.
Sound financial services are at the heart of thriving societies. As leaders and innovators in this space, we share the responsibility of building organisations, developing experiences, and nurturing the people who make this success possible. Digital stewardship, decentralised decision-making and followership aren’t silver bullets; they are notions to be developed and practiced. Through this commitment, we can make the best contribution to the digital journeys that lie ahead for our brands, our employees and our customers.