Strong leadership pays dividends in the digital economy, where continuous innovation, rapid decision-making, and a global mindset are essential to success. Oxford Economics surveyed more than 4,100 executives and employees around the world and from diverse industries, during the second quarter of 2016. The study, Leaders 2020, finds that companies that get digital leadership right perform better in the marketplace. These companies:
- Report stronger financial performance. They are 38% more likely than others to report strong revenue and profit growth.
- Are building a stronger leadership pipeline. They have more mature strategies and programs for hiring skilled talent (85% vs. 64% of others), building diversity (56% vs. 48%), and succession planning (72% vs. 50%).
- Have happier, more loyal employees. Employees from well-led companies are more satisfied (87% vs. 63% of others) and more likely to stay in their jobs if given the chance to leave (75% vs. 54%).
The research program, sponsored by SAP, identifies a rising generation of Millennial executives who are impatient for change and unimpressed with the digital leadership skills of senior management. Survey analysis also suggests a relationship between effective diversity policies, executive leadership, and bottom-line performance.
What does it take to become one of these top performers? According to the study, the best-led companies:
- Embrace digital technologies. They are executing on a company-wide digital vision and embedding technology in all aspects of the organization.
- Simplify decision-making. They make data-driven decisions in real time and distribute decision-making power across the organization.
- Flatten the organization. They are focused on reducing complexity and bureaucracy and offering the latest technology to all employees.
- Build a digital workforce. They are focused on improving digital proficiency among managers and employees and emphasizing transformation readiness and the strategic use of technology.
“These findings should serve as a wake-up call for business leaders,” says Edward Cone, deputy director of Thought Leadership at Oxford Economics. “Your employees, your younger executives, and your financial results are all sending you a clear message about the importance of updating and upgrading leadership skills for the digital age. It’s time to listen and lead—or get out of the way.”