I work as a Senior Consultant in the Human Capital Consulting practice of Deloitte, and we release an annual report that highlights the anticipated human capital and organizational trends, and the perennial issue highlighted on the report is leadership. Organizational leadership ranked 6th on the 2017 Deloitte Global Human Capital Trends.
For organizations, leadership is a top priority and one of the greatest challenges they face as organizations are becoming forced to restructure and adapt to disrupting forces – digital technologies, AI, cognitive intelligence, etc. In fact, Deloitte’s report indicates that over 90% of organizations are restructuring and leaving the old hierarchical model behind to a team-centric management model (Abbatiello, Knight, Philpot, & Roy, 2017). In a world of digital disruption, a digital leader becomes necessary.
Northouse (2016) provides a skills approach to leadership that categorizes leadership skills into three categories: technical, human and conceptual. Through the three-skills approach, this set of knowledge and skills represent the leadership capabilities necessary to effectively lead and accomplish goals (Katz, 1995, as cited in Northouse, 2016). Technical skills refer to the specialized knowledge and ability for the execution of a specific job or activity, which tend to be most important for line and middle managers (Northouse, 2016). Human skills refer to the capabilities for working with people, such as the ability to handle conflict and exercise emotional intelligence and social perceptiveness (Northouse, 2016). Conceptual skills refer to the strategic planning, problem solving, and creation of a vision to bring organizational ideas and goals to reality (Northouse, 2016). The digital revolution greatly impacts how those skills are developed and applied to the workplace.
According to our study of over 10,000 HR and business leaders from around the globe, 42% of organizations believe “leadership development” to be very important (Abbatiello et al., 2017). However, the ability of organizations to address this has dropped by 2% (Abbatiello et al., 2017). Deloitte maintains that in order for organizations to remain competitive, they need a completely new type of leader, one that is younger, more flexible, and digitally savvy (Abbatiello et al., 2017). The leaders of the organizations of tomorrow need to have special strengths in interpersonal skills in order to manage the new collaborative and team-centric models organizations are adopting (Abbatiello et al., 2017). Leading organizations are looking for leaders who are able to, often digitally, manage and build teams, increase collaboration, and keep people connected even in a digital environment.
Another reason for this shift are changing demographics: Baby Boomers are delaying retirement while Millennials are reaching the age where they would normally begin to replace retiring leaders at mid-level positions, and more than 44% of Millennials are now in leadership positions (Abbatiello et al., 2017). Millennials bring to the game different desires and expectations that organizations must meet in order to retain top talent. This includes the desire for lifelong learning and development, and the opportunity for quick advancement (Abbatiello et al., 2017).
Combined, these factors correlate with the environmental influences aspect of Mumford, Zaccaro, Harding, Jacobs, and Fleishman’s (2000) Skills Model of Leadership, as cited in Northouse (2016). According to the Mumford et al. (2000) Skills Model, these technological and generational disruptors are internal environmental influences that lie outside of the sphere of influence of the leader but may affect leader effectiveness.
To respond to these internal environmental influences, Abbatiello et al. (2017) proposes that leaders in the Digital Age should undergo three key transformations:
Cognitive Transformation- Think differently
Behavioral Transformation- Act differently
Emotional Transformation- React differently
These three areas of transformation align with the three types of skills as stipulated by the three-skill approach proposed by Katz (1995, as cited in Northouse, 2016).
The Cognitive Transformation revolves around how the leader resolves problems and manages tasks and resources according to disruptions and new ways of doing things (Abbatiello et al, 2017). The digital leader of tomorrow will need to know how to manage vast amounts of data and intelligently apply information to strategic business decisions and planning. This corresponds to transformations in both Technical and Conceptual skills of the three-skill approach outlined in Northouse (2017). In this sense, the leader will need to incorporate digital skills to face and leverage changing technologies and their results, as well as the conceptual ability to create and communicate a clear vision in the application of changing technologies as they influence and affect the achievement of organizational goals and priorities.
The Behavioral Transformation refers to how the leader adapts and collaborates with others (Abbatiello et al., 2017). This may be ascribed to the human skills of the three-skills approach. Digital leaders must possess the emotional intelligence and social perceptiveness necessary to drive the organizational culture and facilitate collaboration and communication across teams, industries, locations, and functions.
The Emotional Transformation refers to how the leader reacts when facing risk and other unexpected situations (Abbatiello et al, 2017). This transformation would affect both conceptual and human skills. The leader needs to be able to handle changes through conflict management, which is a human skill (Northouse, 2016) Simultaneously, the leader will need to be able to think strategically, problem solve, and create a vision in order to correctly adapt and guide teams past the current uncertainty into the future. This aligns with the conceptual skills of the approach (Northouse, 2016).
While there are some differences between Katz’s three-skill model and Mumford et al.’s skills model, the technical, human and conceptual skills of Katz’s models correlate with the competencies of the skills model: problem-solving skills, social judgement skills, and knowledge competencies (as cited in Northouse, 2016). These skills, combined with personal attributes such as general cognitive ability, motivation and personality, lead to effective leadership outcomes (Northouse, 2016). In a digital world of constant change and ambiguity, these competencies and capabilities are undergoing a shift to adapt and create leaders that can effectively lead the future.
According to the skills model, these skills may be developed through career experiences that allow the leader to face challenges, both in order to face the challenges of the context as well as the challenges faced by the leader as they grow in hierarchical level.
To address the challenges of the digital context, digital leaders may additionally employ the adaptive leadership approach. According to this approach, leaders may overcome technical and adaptive challenges through the application of six key leadership behaviors (Northouse, 2016). These behaviors include finding perspective in the midst of ambiguity, identifying and analyzing the challenges to be faced, establishing consistency and regulating distress through the construction of a supportive environment, encouraging people to focus on the tasks to be done, provide direction and structure, and include diverse perspective and ideas in the decision-making process (Northouse, 2016).
Through the development of the necessary skills and the exercising of the necessary leadership behaviors, the digital leaders of the future will have the capabilities and sufficient adaptability to react and lead through constant change and disruption.
Abbatiello, A., Knight, M., Philpot, S., & Roy, I. (2017). Leadership disrupted: Pushing the boundaries. 2017 Deloitte Global Human Capital Trends, 77-85.
Northouse, P. G. (2016). Leadership: Theory and Practice (7th ed.). Thousand Oaks, CA: SAGE Publications.