The future of leadership and the pains and prospects of a tech-based world
Digital transformation is reshaping organisations and industries – and that means leaders must learn and embrace new skills to survive and prosper
Advances in technology and shifts in working practices are changing the skillsets leaders will need in the future, with more than half of senior managers (58%) saying that leading change and transformation is a development priority for them, according to Warwick Business School’s 2020 Organisational Learning Report.
“The leaders of businesses have got to start leading the agenda around technology,” says Richard Townsend, CEO of QA Workforce Learning. “The issue we have seen with digital transformation so far is that it has created silos, which has prevented companies from moving to the second phase of digital transformation where they actually become a new type of business. The first phase is improving operational effectiveness and delivering efficiencies, and a lot of businesses are stuck in that phase.”
To progress to the next stage, businesses need to dismantle those silos and look more holistically at how digitisation can change their operations – and that requires leaders to first transform themselves.
New technology trends
“Learning has to become a strategic imperative,” says Townsend. Those skills leaders will need to develop include areas such as resilience, mental agility, data literacy and technology – skills that are already important today but will become increasingly so in the future, says Carolyn Hicks, a partner and head of business transformation at Grant Thornton.
“New trends in technology will change the way organisations work entirely over the next 10 to 15 years,” she says. “Leaders need to understand how these will impact their business [and] how they can be used to unlock opportunity and growth.”
Leaders also need to get better at predicting how the operating environment is likely to change as technology develops.
“If you really want to be a leader, you have to be able to anticipate the future, you cannot just keep pace with the transformation that happens,” says Salvatore Nigro, CEO of JA Europe. “Change is happening at an unprecedented level of speed, so you need to be able to anticipate what is going to happen in five years and be a little bit ahead of the game.”
That means embracing continuous training and development but doing so at a much faster clip.
“Learning how to learn at speed is also a skill,” Nigro says.
Learn to pick the right people
Another skill that leaders will need more as digitisation accelerates is the ability to recruit effectively and build agile and diverse teams.
“Creating teams that can deliver is more important than it ever has been, and arguably, as difficult as it ever has been,” says Mathew Cuthbertson, a senior partner at The LCap Group. “Great leaders need to focus on the who, rather than necessarily just the whats. There’s a good quote that it is easier to be successful as a CEO if you’re an outstanding recruiter and an average manager, than if you’re an average recruiter and an outstanding manager.”
In order for leaders to upskill themselves effectively, they must be able to identify where they lack skills or where they need to fine-tune what they already have.
“If you know AI is going to have an impact on your business, but don’t understand it enough, find out more,” says Hicks.
One potential stumbling block for leaders is finding the time for learning – something that may deter some from getting the training they need.
“Leaders need to understand they must make time for learning and it needs to be structured and strategic, and it needs to be flexible,” says Townsend. “Time is fundamentally the biggest challenge for leaders, because they’re pulled in lots of different directions.”
Aside from not allocating enough time for learning, leaders may not always have the awareness to recognise what they don’t know, therefore they prioritise the wrong areas for development, says Hicks.
“A leader really needs to think carefully about their own personal development plans and what skills and experience they need to lead their organisation into the future,” she says. “This cannot be done in isolation, they need to take an outside look into what other organisations and their peers are doing. They should also keep an eye towards what leading influencers in their field are saying and use this to help shape their personal development plans.”
The cost of standing still can be detrimental not just to leaders personally, but their organisations too.
“There is a danger that you lose your relevance in being able to support your organisation and your people,” says Cuthbertson. “Leaders have to constantly focus on how they can improve and develop new skills and adapt to a changing world – if you’re not doing it, you’ll lose relevance, lose credibility and lose your adeptness at making decisions.”
Therefore, leaders who don’t invest in their personal development and learn the skills to successfully lead their organisations in the future will ultimately find themselves sidelined and replaced by those who are better able to adapt to the future of work.
Unlocking the leadership skills of tomorrow
Leaders will need a whole host of new skills if they want to succeed in an increasingly tech-based world
Digital transformation means the skills that leaders needed in an analogue world are no longer enough to run successful businesses. As the demands on leadership change, leaders must recognise the areas they need to hone and develop if they want to successfully lead their organisations in the digital era.
As businesses increasingly digitise, leaders have more data at their fingertips than ever before. By harnessing that data and using analytics, leaders can better understand customer behaviour and make more informed decisions about their businesses. “Data can help you understand what the customer wants but it’s also about building a direct relationship with the customer,” says Richard Townsend, CEO of QA Workforce Learning.
“I want to know more about them before they arrive and respond to them before they’ve even thought about it and provide opportunities that are tailored for them.” Those analytical skills are going to become even more important for leaders in a tech-based world. “Traditional leadership skills were very much the soft skills and they may have skipped out on a lot of the data work; now if you have the soft skills but not the data skills, you’re not going to get very far,” says Chibeza Agley, co-founder and CEO of Obrizum, a digital learning platform. “But if you have the two together, they’re going to win.”
With digitisation transforming organisations and industries, businesses that don’t innovate risk stagnating or worse. “If leaders aren’t looking at how they can exploit new technologies, ultimately they will lose market share at the very least or new competition will take over the industry entirely,” says Mathew Cuthbertson, a senior partner at The LCap Group.
“As a general principle, leaders need to be very focused on how they can leverage digitisation and technological advancement to their advantage.” Leaders must also be proactive about innovation. “It can’t be a side of the desk activity or waiting for something good to come along and then jumping on it, innovation has to become a strategic priority that is future proofing the organisation,” says Agley.
Given the rapid pace of digitisation, leaders need to constantly refresh their skills to ensure they can adapt to new trends and remain effective. “The skillsets required in a good leader are changing quite dramatically,” says Agley. “The need to understand and use data to inform the way you lead an organisation and people is critical.” The boom in tech startups in recent years has also increased the number of young leaders.
“Technological advancements have created shorter routes to leadership positions; many of these leaders can lack the depth of experience and maturity required to handle complex and high-stakes situations effectively,” says Andrew Rodgers, principal in Odgers Berndtson’s leadership practice. “Therefore, future leaders must strive for accelerated personal and professional growth with the aim of developing emotional literacy, self-awareness and empathy.”
Technology is not just transforming businesses, it is also changing the nature of how people work—and it is a leader’s role to shape and prioritise this, says Carolyn Hicks, a partner and head of business transformation at Grant Thornton. “Once there is a clear line of sight to this, the next question is who needs to do that work?” she says. “Could technology, AI or robotics do the work?
The only way a leader can answer that is to seek guidance and build their own knowledge around the art of the possible, be curious about AI, be interested in robotics, look to the future and horizon scan trends in their sphere that can help them lead their organisation into the future of work.” The pandemic has also shifted expectations around remote working and how people do their jobs.
“This has created a new set of factors for leaders to manage,” Hicks says. “How do I attract and retain people when demand for the skills I am looking for is high? How do I lead the team effectively in a hybrid environment and maintain the culture? How do I ensure the productivity of my team in a hybrid world?”
Technology and digital transformation are also changing how leaders approach strategy as they try to ensure their businesses remain relevant in a digital world. “It will no longer be sufficient to merely understand what technology can do for the business; true leadership will lie in leveraging technology to envision a brighter future and enable more expansive strategic planning,” says Rodgers. “Technology will ultimately enable leaders and their teams to dream bigger, but they’ll need to develop the ability to discern between which technology is right for the business and which is not.”
How can leaders balance tech and human capital?
It's vital for businesses to gain a nuanced understanding of how people and machines can work together – going beyond productivity to consider the quality of work and the impact on the wellbeing of people and society
Week after week, the world of work is transforming because of the rapid development of automation, artificial intelligence (AI) and robotics – and the exponential speed of their adoption.
Just consider the rate at which regenerative AI, which not only generates content in response to prompts but can actively participate in its evolution, has gained traction over the past nine months.
While it took 25 years for telephones to reach 10% adoption (and an additional 39 years to reach 40%), ChatGPT attracted more than 1 million users in five days.
Of course, AI has long permeated our working lives; we use it every time we unlock our phones using facial recognition or conduct Google searches.
Tech adoption escalated during Covid-19 when increased homeworking fuelled a shift to online platforms and the use of algorithmic ‘bossware’ tools to monitor employee productivity. But even in 2018 Deloitte predicted a move towards a “no-collar workforce” offering “an entirely new organisational model in which humans and machines become co-workers, complementing and enhancing the other’s efforts in a unified digital workforce”.
The future of work and wellbeing
Despite such images of cosy collaboration, the media regularly amplifies the negative potential of new technologies. Headlines warn of job elimination and dystopian scenarios. In May 2023, ‘godfather of AI’ Geoffrey Hinton quit Google, citing the “existential risk” posed by the creation of a true digital intelligence.
To address these fears, we need to gain a nuanced understanding of how people and machines can work together – going beyond productivity to consider the quality of work and the impact on the wellbeing of people and society.
“Ideally, we would be sharing information that’s more constructive around what's actually happening and the things we can do if we genuinely think our jobs are going to be disrupted,” asserts James Hayton, professor of human resource management and entrepreneurship at Warwick Business School (WBS).
For example, he notes the common conflation of ‘tech exposure’ with ‘tech adoption’, which skews the overall picture. “A lot of literature talks about the threats to jobs, but exposure to AI is quite different from the actual adoption rate,” he argues.
He adds that “there’s no evidence in the data for net job destruction. Jobs are being created and jobs are being deleted – but the balance is positive”.
However, “In addition to the creation or deletion of jobs, we need to consider what kind of quality of work is left behind,” he says. “Is the work more intense? Is it more routine, boring, less meaningful, less challenging – or is it in fact better paid, fairer, more rewarding?”
The role of leaders
Hayton is leading his school’s involvement in The Pissarides Review into the Future of Work and Wellbeing, a collaboration between WBS, the Institute for the Future of Work and Imperial Business School.
Headed by Nobel Prize-winning economist Professor Sir Christopher Pissarides, this will shed light on the way automation technologies are transforming work, society and the economy in terms of access to work, working conditions, worker health and wellbeing, and inequalities between different groups in the population.
Specifically, WBS is investigating what drives the adoption of automation technology and the impact it has on workers, including net job and skills creation. It will use its expertise in behavioural science to develop policies to tackle the issues unearthed in the review. Hayton’s team has already conducted a survey of 1,000 employers.
From his research, Hayton has identified that organisations use three parameters to decide whether or not to adopt new tech:
- Will the tech boost our relative advantage?
- Will it fit into our operations?
- Can we understand it? (Is it usable?)
However, integrating it into the workforce can be a more complex matter. He advises leaders to take a “farsighted” and inclusive approach to establishing an integrated workforce.
This involves listening to people to understand how tech solutions could augment roles or solve problems.
“Successful tech is rarely imposed from the top down. It comes from the middle up,” points out Hayton. “Employees learn about tech and say ‘this will make us more productive or benefit clients’.”
Here, the leader’s role is to encourage and enable people to share their ideas – to listen to these and to find ways to experiment with them. All too often, bureaucracy and hierarchy stop us from hearing what our employees want to do and think we can achieve.
Leaders also have a moral obligation to engage with their workforce on the potential impact of new tech, according to Hayton.
“When we use AI, we have a responsibility to consider whether it is degrading or enhancing work. Ultimately, all stakeholders should be involved in that assessment because there'll be different perceptions. If we asked surgeons they would have one view; if we asked operating theatre staff, they might have a different one.”
While developers are not always aware of the impact of their innovations, “we have a choice in how we implement them,” stresses Hayton. “We should consider how it’s going to change people’s work – and what then becomes those people? Does that matter? Do they have a voice? Is it worth the trade-off?”
Taking an inclusive ‘high-road HR management’ approach can reap clear benefits when it comes to successful implementation.
“If you treat people as an investment to maximise versus a cost to minimise – training employees and sharing information with them – that's positively associated with whether people will view technology positively,” says Hayton.
“And this also affects the impact the technology has. We're finding that, in many cases, there's a positive impact on net job creation.”
Horizon scanning for skills
While it seems there will be net job creation, opportunities lie at the highly skilled end of the spectrum, specifically for people with occupation-specific knowledge, who can combine human judgement with an understanding of how to leverage algorithms.
“Initially, people were saying that professionals were going to be disrupted by AI because it affects non-routine cognitive tasks, but there's actually more demand for those skills,” Hayton argues.
There is danger, however, for lower-skilled workers – and a greater risk of economic inequality.
To mitigate this, leaders should constantly be “horizon scanning, identifying where in the organisation people are likely to be impacted or need the skills in the near future, and providing them with the opportunity to upskill and experiment”.
Top of the skills list for Hayton is information and communications technology. “Skilled work will be a collaboration between humans and machines, so people need to continually update their knowledge to understand how the algorithms work and how they can interact with and leverage them,” he says.
Under Pissarides’ theory of market frictions, people are prevented from pursuing opportunities because they don’t have the right information; they’re not in the right place, or they don’t have the right skills. These are things that we can address.
This, of course, goes beyond organisations and requires government action: “The way out of inequality and fear is through education, investment in human capital and the technology infrastructure in the country. It’s not possible to have too many highly skilled people.”
Professor James Hayton teaches Entrepreneurship and Innovation as part of WBS’s Digital Innovation and Entrepreneurship Postgraduate Awards suite on the Warwick Leadership Pathways.
Equip yourself with the skills and knowledge to drive digital transformation and innovation in your organisation and discover more here.
The impact of leadership development
Leaders must build on their skills to understand and incorporate digital thinking into their mind-set, strategy and vision
Research carried out by McKinsey reveals that 70% of digital transformations fail due to employee resistance. In an attempt to buck the trend, the Warwick Business School (WBS) launched an executive diploma in strategy and innovation. Here, two recent graduates, Mark Famy and Katherine Pitts, reveal how the course equipped them with the leadership skills to drive positive and profound digital change.
Katherine Pitts is chief of strategy and transformation at IC24, a not-for-profit social enterprise enabling high-quality integrated urgent care on behalf of the NHS and Mark Famy runs his own consultancy, which helps leaders to hone and develop their innovation strategy, process culture. He also works as an associate lecturer in strategy and entrepreneurship:
How has the changing nature of work amid digital transformation affected your leadership practice?
KP: Digital literacy across the whole of the NHS – and certainly our services – is vital to deliver outstanding care to significant volumes of patients. In order to ensure that patients receive the best care, leaders have to understand and incorporate digital thinking into their mind-set, strategy and vision. As chief of strategy and transformation, my primary objective is to ensure that when it comes to decision-making, those around me have the digital tools they need to flourish and thus transform the lives of patients.
MF: During the lockdown, I devised workshops which helped businesses to develop remote and digital working strategies. A common question that leaders often ask is ‘how do I recreate the water-cooler moment if my staff aren’t in the office?’ If you haven’t come across the term, it is often defined as the serendipitous interaction that happens when people bump into people in the office.
I don’t like the term ‘serendipitous’ because it suggests that these important moments only happen by chance. They don't. To recreate these moments requires a synchronised approach i.e. synchronicity As an innovation expert, I guide leaders in how they can build these ‘creative spaces’ remotely where people can interact and share ideas and collaborate efficiently, effectively and powerfully.
How did an executive development course help you address the challenges of digital transformation?
KP: The strategy and innovation one-year executive diploma at WBS really helped me to develop my thinking around digital capabilities and digital innovation as part of a wider strategy. One of the greatest benefits was sharing ideas and learning from the diverse and eclectic mix of people, each of whom had varied skillsets and experience. Brainstorming and collaborating with the wider group was crucial in helping to consolidate all the different aspects of digital transformation, some of which I had never considered or explored before, using a range of different theory and practice.
MF: The executive development course taught me that it is important to take a step back and recognise that globally businesses are having to grapple with unprecedented levels of volatility, uncertainty, complexity and ambiguity, or VUCA for short. The panacea is digital transformation. The course also made me realise that in this challenging operating environment, where nobody has all of the answers, clear decision-making, backed up by a commitment to make it work, is absolutely vital.
How did you find the experience and how did it fit around your busy work life and schedule?
KP: I really enjoyed the course, as it provided me with a unique opportunity to take a step back from my busy working life and to learn more about digital transformation strategy both from the course tutors and from my peers.
MF: At first, I found the academic assignments challenging because I had to juggle work and family around them. However, my employer was very understanding and gave me the time and space to study. That said, they benefited too because my assignments were focused on my work that I was doing for my company, and the course equipped me with the knowledge and understanding to make positive changes.
What impact has executive development had on your career – keeping in mind the impact of digital transformation?
KP: Thanks to the course at WBS, I have been able to fully develop the strategy and transformation function within my organisation. However, my time at WBS also gave me unique insight and perspective as to how my role dovetails with other positions within the organisation. The understanding that I have gained has helped to increase efficiency and productivity.
MF: As a consultant, I have incorporated elements of the WBS coursework and modules into the way I work. I am now helping other companies from both the corporate and non-corporate world with their digital transformation journeys. The WBS postgraduate course has given me the confidence to know that I can help organisations anywhere in the world, as long as they have an internet connection and are open to embracing digital tools.
Keeping pace with radical change: a leader's priority