Why the C-Suite Needs Digital Leadership
Josh Alwitt had a comfortable career as a software developer at the fast-growing digital-marketing firm Sapient when, about 10 years ago, he decided he wanted to work on changing the people-management culture at the tech-oriented firm. He says he “saw people didn’t really have the skills to do the level of work our clients needed.”
But about five years after he made the switch to HR to oversee talent development for the 12,000-employee Boston-based company, now known as Publicis/Sapient, Alwitt had an even bigger idea. The real problem, he says, wasn’t so much with the rank-and-file employees, but rather a lack of digital leadership coming out of the C-suite.
“I realized the real leverage point for digital was leadership,” says Alwitt, who today is group vice president for talent, learning and culture at Publicis/Sapient, and a leading evangelist on how to promote digital leadership among top executives.
Now, Alwitt spends a large chunk of his time coaching and mentoring the marketing company’s key leaders, focusing on changing the mindset at the top so that executives will approach problems with the right frame of mind—less top-down, willing to listen to a wider circle of voices and not afraid of taking risks to compete in an internet-driven age.
The HR executive mentors the firm’s leaders one-on-one and also develops training programs so that other Publicis/Sapient executives will adopt the digital mindset in their day-to-day decisions. At the start of 2018, Alwitt led a new initiative to rewrite the firm’s mission statement with companywide input—with the idea that, when all employees are on the same page, it will be easier for managers to delegate and share authority.
Alwitt says buy-in from the CEO and other C-suite leaders is critical for creating a digital mindset throughout the entire company. “What people see leaders value is what they implicitly value back,” he says. “People observe what leaders do, what they invest in and who they promote and then they make implicit assumptions about what’s valued.”
Alwitt and Publicis/Sapient are seeking to be at the cutting edge of an issue that confronts virtually every type of business right now. In recent years, digital leadership has become something of a buzzword—albeit an elusive and not always well-defined one—for HR executives who’ve raced to embrace the idea that running a large company in today’s interconnected world calls for new skills, changed mindsets and a style of decision-making that is often radically different from what CEOs were taught on their way up.
The most important thing to understand about digital leadership, according to the growing flock of experts who preach its gospel, is that it involves a lot more than sending the C-suite team on a retreat for a week to learn how to post the latest company news to Twitter or Instagram. Rather, these advocates argue that both the learning and—more importantly—the implementation of digital leadership is continual, and it involves distributing power for faster decision-making and processing feedback in the real-time way that computers have made possible.
Creating a Digital Mindset
Stacey Philpot, head of the leadership practice at Deloitte Consulting, says the “future of work is changing how work gets done and where it gets done”—particularly as smartphones become the ubiquitous method of communicating for workers, clients and customers.
While most HR executives understand the need for a new kind of leadership for the digital age, she and other experts still worry leaders currently lack the right mindset to make that a reality. Her consultancy conducted research with MIT’s Sloan School of Management that found a whopping 87 percent of executives say the digital revolution is disrupting their industries, yet just 11 percent of them believe that their current talent pool is up to the task of keeping pace.
According to Philpot, too many of these firms are lagging behind because they are focusing on the wrong things. “The first thing,” she says, “is they go to structure and they try to organize their way to digital—and that doesn’t really work because you’re not really preparing your talent, and the change is too significant. Sometimes they’ll try to buy digital skills—they’ll bring in a chief digital officer or a small group—but they don’t get integrated enough with the company and the change is too big, and that doesn’t work either.” Nor, noted Philpot, does a technological quick fix, like simply adding a new app, bring the needed cultural change.
A 2017 Deloitte report deals extensively with trying to answer the question of what does work for HR executives. It recommends that companies seek to promote digital leadership by moving away from more traditional hierarchical structures and establishing networks of problem-solving teams. Other recommendations include a more agile style of leadership that responds quickly to crises, a more widely distributed system of accountability, continuous feedback for employees and an increase in the use of digital platforms like Slack that speed up communication.
Philpot says it’s critical for top executives to develop what she calls “technology fluency”— day-to-day understanding of how the latest gadgets and tech tools work and how they affect your business. “You need to understand the definitions and the technology and what is happening— What does AI mean? What is blockchain? What is the difference between augmented and virtual reality?—so that people feel more confident and comfortable.”
Dennis Baltzley, the global head of leadership development solutions for Korn Ferry, says speed, agility, and particularly, resilience—trying new things and quickly moving on from failure—are critical to digital leadership. “How do you let go and turn quickly?” he says. “The nature of speed is managing fast, emergent issues as well as keeping an eye toward the long-term platform.”
Transitioning to Digital
Like many experts, Baltzley is especially focused these days on helping long-established companies with roots stretching back to the Industrial Revolution make the transition to digital. He and the Minneapolis-based Korn Ferry were recently brought in to assist Philips Lighting—which spun off from its parent, the iconic Dutch industrial giant Royal Philips, in 2016 and is now changing its name to Signify—in adopting a leadership style in line with the switch from selling the traditional incandescent bulb to connecting with the so-called Internet of Things.
The challenge facing Philips Lighting/Signify was enormous. At the same time that the unit was looking to establish itself as a separate public company, leaders were also managing that transition from industrial to digital, including developing a capacity to process—and make money from—the data that flow in around modern LED lighting.
“We needed to build or buy the skills that we didn’t have in our company after the separation [from the larger Royal Philips], and one key aspect was digital,” says Anissa Vincenti, vice president for integrated talent management and organizational development at Philips Lighting. She points out that time was of the essence, with a corporate goal of an internet-connective product line by 2020. The program for the top executives that Philips Lighting developed with Korn Ferry was labeled “immersive learning.”
Baltzley explains the strategic approach as being careful about pushing people out of their comfort zone—so they have to be disrupted and they have to move toward change—but not pushing them into the panic zone.
The immersive-learning program involved unconventional workshops that specifically addressed problems around both the switch from incandescent lighting to LED and restructuring the firm around the collection and use of data. The focus on coming up with “big ideas” was augmented with follow-up trips to Silicon Valley and elsewhere to meet with innovators from other industries, especially firms oriented around high tech.
Vincenti says one clear lesson was that HR executives needed to stay ahead of the learning curve to steer the digital transformation, rather than lagging behind product managers and other teams. “We felt ashamed one year ago when we had a big internal leadership summit,” she recalls, “and we were assessing ourselves and we said, ‘We are not really learning as fast as we should.’ ”
Now, Vincenti says, the HR team is leading the charge on social media to promote the changeover from Philips Lighting to Signify for key customers and suppliers.
According to an analysis of the effort by Baltzley, the Philips CEO stayed deeply involved in the workshop process throughout, working to implement some of the “big ideas” that had been kicked around before the training sessions had even wrapped up.
Another key aspect of the company’s program—which is often a component of digital-leadership efforts at other companies as well—is a push for “upwards mentoring” that not only recognizes the strengths of five separate generations that work within Philips but specifically encourages younger staffers to pass digital skills to their elders born before the dawn of the world wide web.
Retraining Executive Leadership
Another large global firm with one foot in its rich industrial history and the other in its high-tech future is Schneider Electric, a Paris-based firm with roughly 144,000 employees worldwide that traces its manufacturing origins all the way back to 1821—but which increasingly provides digital solutions to its energy customers.
Olivier Blum, chief HR officer for Schneider Electric, says the firm’s digital transformation has been a long time in the making but recent trends—such as moves into edge computing and the Internet of Things—have caused the firm to sharply refocus training for its managers over the last two-and-a-half years.
“HR needs to help lead the digital-leadership transformation,” Blum says. “Ironically, as the company becomes more digital, the skills to shape the future of the company become more human. We need leaders who can detect the ‘weak signals’ of change, set direction for the company, and manage the uncertainty that change and rapid transformation create.”
In addition to the learning program Transforming Schneider Leadership, which aims to retrain the company’s top executives by 2020, Blum says, the firm is also in the early stages of a new initiative called License to Lead, a constantly updated digital-education tool for top officials.
“It’s still early days but our leaders have embraced this enthusiastically and love the fact they can learn on the go,” Blum says.
Brian Baker, U.S. digital workforce leader and a partner at the consultancy Mercer, has established himself as a leading visionary in the digital-leadership arena, both as an adviser and at Walmart, where he was senior vice president of global people. As such, he helped develop a plan for the world’s largest retailer to be positioned to respond to unanticipated changes in the internet-based economy over the next decade and beyond.
“How do we fast-forward 10 years into the future?” is how Baker has come to define the challenge of developing top business leaders for a digital age. “Most organizations don’t have the capability or the thought process or spend the time” to answer that key question.
When he was at Walmart, Baker and his then-boss, CHRO Jacqui Canney, developed a fresh blueprint that made digital leadership a core competency for rising executives and required them to display their tech acumen in order to be considered for promotions. That was coupled with a push to encourage company leaders to collaborate across former boundaries—both organizational and geographic—to innovate, as shopping increasingly became a digital activity.
In advising other clients, Baker says, he’s seen that it’s important to develop digital leadership by defining a collective purpose—similar to the mission statement that Alwitt and company leaders at Publicis/Sapient have been working on recently. He also suggests that firms develop new measures of success based on achieving defined digital goals, such as, “How many steps are we taking out of the process … Are we removing three extra clicks?” for the customer. “Give it a gamified or quantified way to see how the organization is making progress.”
Leading with Experimentation
A key piece of digital leadership that Baker also stresses is to “talk about going digital every time that you can”—and especially when the very top management is on board.
“You can see this as a true accelerant when the CEO is a vocal and visible representative of digital,” Baker says, “because then the leaders get on board, and then that helps the managers.”
Altering the flow of information, so that millennial workers who are more digitally savvy and perhaps more in tune with today’s customers, can also drive critical information toward decision-makers at the top, Baker says—something that he calls “constructive and creative conflict.” The important thing, he emphasizes, is that digital leadership “takes an integrated approach and systemic thinking.”
That’s similar to the strategy championed by Alwitt at Publicis/Sapient, who decided that, before any new training was developed for top company executives, the firm needed to better understand what kind of behaviors and decision-making led to the best business results. The firm retained a top consultant in the Boston area, trained at the Harvard School of Education, and then developed hundreds of pages of information about company projects and outcomes, seeking to create a list of the behaviors that led to winning results.
The study identified 31 different behaviors—“kind of like Baskin-Robbins [flavors],” Alwitt says with a laugh. They drilled even deeper to come up with five key ways of thinking that would bring success to Publicis/Sapient—if leaders could be trained to approach every task with the right mindset.
“The shift is moving control from top-down governance to returning authority to people on the ground, because decisions don’t have time to go up and down the chain,” said Alwitt. He says that philosophy was validated by the recent book Team of Teams by retired Army Gen. Stanley McChrystal, which centers on the need to delegate authority because of rapidly changing conditions on the battlefield.
Like many companies looking to become digital leaders, Alwitt says, Publicis/Sapient increasingly employs that agile technique that was initially developed in the software industry. That means working in short bursts and frequently assessing programs, in line with the concept of “failing fast” and thus learning quickly from any mistakes.
“You have to abandon efficiency as a priority—for experimentation,” he says. “This is a massive mindset shift for a leader because leaders are told you can’t fail, and experimentation—by definition—involves failure.”