11 Leadership Guidelines for the Digital Age

Leadership + Management |

Picture: Sergey Nivens / fotolia

The old ways of running a company won’t cut it in a digital world, say Liri Andersson, Insead Guest Lecturer and Ludo Van der Heyden, Insead's Chaired Professor of Corporate Governance. “There is no border anymore between the pre- and post-digital worlds. Digital is business and business is digital.” Yet, many corporate leaders are not working on digitalising their organisations, in fact most board members lack the knowledge and awareness necessary to lead a digital transformation.

To help top management catch up, the authors present eleven strategic implications of digitalisation (grouped into the categories business environment, organisation and strategy).

The business environment

1. Digitalisation requires an unbiased understanding of the external environment.

Analogue-era frameworks such as Michael Porter’s “five forces” will need to be revisited, now that the impact of digitalisation is rapidly replacing traditional physical barriers to entry with intangible barriers that no amount of industry prominence or cash can overcome.

The organisation

2. Digitalisation may require a reformulation of the firm’s mission.

Boards and executives will need to question all pre-existing assumptions about the firm’s mission and industrial positioning, as well as the sustainability of its business models and methods.

3. The meaning and impact of digital to the firm must be clearly stated.

Firms should define their own digital road map. Leaders can start by developing an in-house dictionary, including entries for “digital” and all related keywords, terms and concepts. Like any other dictionary, it will need frequent updates.

4. Digital understanding and capabilities are required across the firm.

Successful change also requires cooperation from junior contributors all the way up to the board by linking digital savvy millennials with the business experience and wisdom of senior executives and directors.

5. Digitalisation must be supported by the firm’s corporate culture.

As with any large-scale cultural change, digitalisation will never take hold unless it is driven by top executives, under the board’s leadership.

6. Digitalisation demands a greater level of collaboration.

Business success can be achieved only through continuous collaboration and ongoing conversations between shareholders, boards, executives and “frontline” employees, heightening the importance of cross-functional and external collaboration.

7. Digitalisation requires greater engagement with the public.

It has never been easier or more essential to co-create with customers and crowdsource ideas, and firms that position themselves as facilitators of customers’ dreams will win in the future.


8. Business strategy in the digital age becomes a continuous process.

Gone are the days when companies had the luxury to think in terms of five-year strategic plans. With major business trends shifting constantly as they are today, strategy formulation and execution need to happen simultaneously and ideally in a seamless feedback loop.

9. Decision-making in the digital age is increasingly data-driven.

In the absence of Big Data, what used to be allowable as an “educated guess” will become at best a stab in the dark.

10. Digitisation requires firms to enter uncharted territories.

Organisations will have to launch ambitious experiments and quickly take learnings on board. For their part, boards and executives must raise their comfort level and accept uncertainty, ambiguity and risk.

11. Digitalisation is about continuous management of change.

Directors and executives must ensure that the will and ability to continuously change are built into the very fabric of the organisation.

Responding to revolution

“It is unlikely that familiar forms of organisational leadership will survive the digital revolution”, claim the authors. “In order for boards and executives to fulfil their roles effectively in the future, a reshaping, if not a disruption, of these functions is necessary.”

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