Little business is conducted these days without a digital element, yet many in the board room still aren't properly versed in the latest strategies to support the digital economy. The business world is rapidly changing as new technologies provide automation and collect more data than ever before, and companies need digital leaders who can steer them into the future with their understandings of these solutions.
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"A digital leader is able to successfully adjust to and navigate the new business environment of the digital economy," says Michael Rander, global research director, future of work, for business technology provider SAP. "Specifically, a digital leader relies on real-time and data-driven decision-making; actively uses technology, innovation, diversity, workplace flexibility, and collaboration as both competitive advantages and tools to increase employee engagement, productivity, and satisfaction; works to decrease organizational complexity and bureaucracy; and emphasizes the value of succession planning and talent acquisition programs."
Companies with an executive leadership that understands how to operate within a digital economy are called "digital winners," according to the Leaders 2020 study from SAP. By embracing the digital economy and supporting a digital workforce, digital winners are 38 percent more likely to report strong revenue growth; have more mature recruitment, diversity, and succession strategies; and have employees who are 24 percent more satisfied and 21 percent more likely to stay in their jobs if offered a chance to leave, according to the study.
"Digital winners are focused on diversity as a competitive advantage, which adds to their corporate creativity, employee engagement, and organizational flexibility," says Rander. "For them, it is a strategic investment with a tangible return on investment. While many companies are not setting corporate goals and strategies for diversity yet, digital winners are one step ahead."
Companies still striving to catch up to the digital winners can start by engaging their employees to find out what's important to them in a workplace culture.
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"The research shows that satisfied employees are significantly more engaged and consistently go the extra mile at work, which in turn impacts career development," says Rander. "The ability to do meaningful work that aligns with personal values and interests is becoming increasingly important. A corporate strategy that gives back to the community [instead of just focusing] on the bottom line is also important for the new generation."
The Changing C-Suite
Digital winner companies typically have a significant millennial presence in their executive lineup. Nearly 20 percent of executives are millennials, according to the SAP study. As younger executives — who grew up in the digital age and tend to have a better grasp on newer technologies — begin to wield greater influence in their companies, business practices will adapt accordingly.
"As the millennials take over the executive sphere, management and corporate leadership will be focusing more on facilitating innovation, using technology for decision-making, collaboration, training, talent development, and importantly, making diversity a competitive advantage with a bottom-line impact," Rander says.
These younger executives aren't afraid to speak out against outdated leadership practices. Millennial executives are 12 percent less likely than older executives to say that leadership gives ample feedback, 7 percent less likely to say that employee satisfaction is valued, and 8 percent less likely than their older counterparts to say that bureaucracy and complexity are discouraged, according to the study.
While some may find it easy to dismiss these opinions, it should be remembered that younger executives are more closely in touch with the general workforce, having climbed up more recently from mid-level management. Companies that can balance the experience of their elder executives with the advice of their younger ones will find themselves well on the path to becoming digital winners.