Leadership for a digital enterprise

Digital businesses have a sneaky way of tiptoeing their way into our lives and parking themselves innocuously in the corner. We don’t even realize they exist. Suddenly they are everywhere and they have disrupted a business model, a habit and sometimes an entire workforce before they had time to change. E-books made up around 30% of all book sales with 65% of the share going to one company –Amazon. Barely 10% of books are now sold through independent bookstores. Yet some of the largest publishers do not have enough people who understand how to adapt to this new medium. These digital enterprises need a combination of skills that leaders of analog enterprises find hard to comprehend.A digital business uses technology as a competitive advantage in dealing with internal and external stakeholders. More and more people across the world are buying smartphones as their costs have already dropped to $30 in most markets including India. The connected world is also becoming more social and sharing everything from ideas to services at the push of an app. Any transaction done through an app gives the enterprise the ability to understand customer needs to offer them unique offerings. For example car insurance policies enabled by geolocation tracking technology will adjust the amount you pay depending on the risk attached to your car's geographical location. This dynamic pricingThat has brought in the digital divide into every organization – the analog and the digital workforce.The digital workforce uses technology to buy, sell, rate a product or service and share their ideas with the world. They are opinionated and are unafraid of rating anything from their managers to their increments and HR policies on the net for all to see. They create content for the social media by constantly uploading pictures of their activities, their selfies and whatever is on their mind – everything is just a tap away on the smartphone. No process has a defined beginning and end. Everything is ongoing and continuous and this speed of continuous and open communication leaves the analog colleagues dizzy.The digital organizations have to think of technology as the backbone of every process. They have to be prepared to spend time communicating in real time with employees and external stakeholders or even strangers. For instance, in the analog world, seeking feedback to track employee engagement is an annual process. Compiling and analyzing the data takes forever and by the time the committees meet to address the issues raised, the year has gone by and it is time to seek feedback on the same issues again. In a digital enterprise all dashboards and analytics around the responses to policies or action taken get updated in real time. The organization is in perpetual beta state.Leaders of these digital organizations will need four capabilities

Cognitive Ability

Superior cognitive ability allows a leader to deal with complex problems and respond faster to them. Many problems in an interconnected world do not have a simple cause and effect approach. Having access to Big Data is not enough; the leaders have to glean insights by sifting through mountains of data. Digital product innovation may mean leveraging big data and advanced analytics to understand consumer behavior in a more nuanced way. Cognitive Ability gives the person the ability to juggle several more variables.

Emotional Intelligence

Leaders more than ever need to have empathy to understand what others are feeling. That helps them to tailor their responses to meet the spoken and unspoken needs of the customers, employees and other stakeholders. This helps them ask questions that may have remained unarticulated in the past. It helps them look for possibilities that may have otherwise remained hidden in plain sight.

Technical Ability

The leaders of digital organizations have to leverage technology in every aspect of the enterprise. Many of the founders of digital giants like Facebook, Google and many of our e-Commerce startups still tinker with the code themselves. Several e-commerce ventures were started by entrepreneurs who wrote the basic code that started the service. The ability to test the code, fail, learn and adapt is a great ability that digital organizations need especially among leaders.

Design Ability

No leader exemplifies design abilities better than Steve Jobs. He understood that simplicity in design could become a key differentiator. So everything from the product to the website to the slides used during the launch was designed with the same minimalist philosophy. Apple’s cash reserves pile of $178 billion dollars is evidence that investing in design pays.These abilities also have some linkage. The cognitive ability and technical ability are closely coupled while emotional intelligence is paired with design capability. The leaders also have to make tough choices – whether to reward the analog employees for their past achievements and loyalty or should they keep an eye on the future and reward the digital employees. The leader’s job will certainly not become easier in the visible future.------------------Join me on Twitter @AbhijitBhaduriFirst published by Economic Times dated 6th March 2015