7 key attributes of a digital leader

What are the key attributes that matter most for leaders in a fast-changing, digital world?

In some ways digital leadership does not differ a lot from change leadership, as it entails a great deal of driving change in behavior. In other ways it is a leadership facing challenges never before encountered, demanding an explorative mindset like never before. It is a leadership moving us into a new way of thinking and behaving – defined by the post industrialized, knowledge sharing and globalized world. It is a leadership securing context and relationships and at the same time consistently challenging boundaries and state of minds, using technology in an agile way as a tool.

The digital leader is able to balance an active leadership, which provides direction and support, with a leadership that is open to handing over considerable responsibility and power. With similarities to servant leadership, the digital leader ensures that employees connect with the right people, that knowledge is continuously and seamlessly shared, that teams are gathered around tasks and results, and that key is trust. Digitalisation is to a great extent about people and their behaviors, and the digital leader knows that.

7 Key attributes of the digital leader

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It’s never too late to give up – in order to succeed

A think piece written by Alumni’s Johan Östlin.

Does hard work always pay off? In some cases, definitely yes, in others not necessarily I’d say.

If you look at Noble Prize winners for example, the one thing that stands out that many of them have in common is persistence – as many of have put in a lot of hard work in a subject, despite of being told that their research was a dead end.

The most amazing example might be Barry Marshall who received the ‘Nobel Prize in Physiology or Medicine’ for his discovery of the bacteria Helicobacter Pylori, and the fact that it causes most cases of gastric ulcer. The amazing part of this was that Barry was not only seen as a mad man by his colleagues for pursuing this idea, he was also not allowed make animal trials to test his hypothesis. The only living creature he could legally try it on was himself – so to prove his theory he actually drank a glass of Helicobacter Pylori and, as history has told, got sick of ulcers.

This is one story of how grit (or conscientiousness) is an established success factor for individuals at work. There are indications that this might apply on a group level as well, as a large study conducted by researchers In-Sue, Seongsu and Van Iddekinge in 2015 found that high levels of emotional stability, conscientiousness, extraversion, and agreeableness in the organisation is correlated with high productivity.

Emotional stability, conscientiousness, extraversion, and agreeableness in an organisation is proven to be correlated with productivity.

High production levels are in turn related to good financial results – so this tells us that organisations with a lot of energetic, nice, stable and thorough employees produce more and are better off financially.

But is it really that simple? If something seems too good to be true, it often is.

To get a different perspective, let’s take a look at Blockbuster, Nokia, and Kodak. All of them once market leaders in their respective field, these companies didn’t have a problem with productivity – what hit them was disruption.

Blockbuster was overtaken by Netflix, and the other two got supplanted by the likes of Apple and Google. Innovative companies that had adapted to a new era. But neither Netflix or Apple were startups, far from it. Apple was struggling for several years before Steve Jobs returned – and what he did when he came back was to practically stop everything that was already ongoing to be prepared to go in full force when the next big thing occurred.

Steve Jobs' success with Apple was partly based on him forcing the organisation to stop doing things, in order to focus on the few things that would make a bigger difference. For the same reasons, one of Google’s eight pillars of innovation is never fail to fail.

Failure is thus an integral part of Google’s success, and there’s logic to this: If you never fail, you probably haven’t raised the bar high enough, right? And they make sure to always learn from their mistakes.

Google may not be known for projects like Google Video Player or Google Answers, but they are known for the success of YouTube and Google AdSense, which was built on the experiences from those failures. And that’s just the tip of the iceberg. Over the years, Google has retired many offerings, either because of obsolescence, integration into other Google products, or lack of interest.

The key to innovation is to fail fast.

According to Google, the key to innovation is to fail fast. By realising which projects are going in the wrong direction early on, they are able to close them down before investing too much in them and dragging the entire business down.

How do you know which projects to pursue and which ones are bound to fail?

Well, this is not an easy task. Daniel Kahneman won the Nobel Prize in 2002 for showing that one of the cornerstones in economic theory was in fact false: that people make rational decisions. Humans are born irrational.

One of those irrational behaviours is that we tend to complete things that we have invested a lot of time and energy in. It does not make sense rationally, because the time, energy, and resources invested are already gone, whether you eventually reach the finish line or not. From a rational point of view we should instead focus on how much return we will get from the additional investment compared to the current return, in economic terms disregarding sunk costs.

So, from a rational perspective – it’s never too late to give up.

"How effective is your organisation at stopping failing innovation projects?"

For many organisations there is a legacy of poorly performing projects that are sucking in time and effort away from the ones that could work. – Harvey Nash Technology Survey 2019.

The sunk cost fallacy and how to avoid it

In practice, if we have invested a lot in a digitalisation project, the decision on whether we should invest more to complete it should be based on the estimated return in relation to that investment, and nothing else. But in reality, this rarely happens.

It is not unusual for IT projects to cost 10 times more than initially estimated. And most of these projects are not only heavy in cost – they also tend to have very limited effect on generating revenue, as they are rather focused on internal efficiency.

One way to avoid the sunk cost fallacy is to use methods like impact mapping in software development to keep track of all initiatives and the goals they set to achieve. This method is actually very similar to how clinical psychologists work with their clients. The common denominator is solving complex problems, and when trying to do that with no best practice solution available, you will have to test different solutions to find out what actually works and what doesn’t. The best solution might not be the first one you try, but rather several iterations of different ideas, as in the Google example.

So, from one perspective it’s true that productivity comes with grit. But at the same time, to stop doing things or trying to fail as fast as possible fast are apparently also success factors for some organisations.

From my point of view, it all comes down to leadership in the end. If you have an organisation filled with people working hard with what they’re supposed to and don’t stop until you tell them to, you are blessed. But if you steer these people in the wrong direction you have a big problem, because they will carry on tirelessly doing the wrong things. In that case you might actually be better off with a more “difficult” group of people questioning your every step.

If you don’t have a good plan, it might be better to stop and do nothing until you figured it out. Or, even better – to try a lot of ideas that might attain your goals and ensure that you fail fast enough if they don’t.


Board Compensation: Increased perceived imbalance between effort and reward

In recent years we have observed an increasing frustration over the perceived imbalance between effort and reward within the board member community. To further understand this trend, we launched a research programme specifically targeting the issue, with the aim of understanding how much of a problem this is now – and how much it might become in the future.

In our 2018 Board Remuneration Survey, over 200 board members from leading Nordic companies answered our questionnaire and shared their thoughts, providing a fascinating glimpse into how remuneration is currently perceived and what impact it might have upon the boardroom of the future.

Key Insights:
  • 36% of board members are unsatisfied with their remuneration.
  • Three quarters (77%) of the respondents champion equal compensation.
  • In declining order of importance: complexity (94%), number of meetings per year (72%), personal risk (67%), and media/public exposure (33%) were seen as key determining factors when deciding remuneration.
  • Three quarters (73%) of the respondents believe that board compensation should include shares or options programmes.
  • There is a clear 50% / 49% split in perception of how the recent change in Swedish regulations for board compensation has affected the respondents’ overall inclination to take on board roles.

Topics covered in this report are: How to determine remuneration; Equal or separate pay; Motivated or independent; Tax regulations; Gender; Executive vs. non Executive; Global Context; more perspectives.

Partner & Head of Board Services – Nordics
catharina.mannerfelt@alumniglobal.com

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Ulrike Rummler

Research Consultant, Board Services – Nordics
ulrike.rummler@alumniglobal.com


Technology vs. Leadership in the quest for digital transformation

Technology vs. Leadership in the quest for digital transformation

Discussions of digitalisation today tends to be somewhere along the lines of: How can we use technology X or Y to disrupt our business? How will the outer, external factors and developments affect our inner core business & operations? However, wouldn’t the more productive conversation to have be how does your company look like when the biggest transformations are done? The direct continuation of that chain of thought is to look from the inside: is your organisation equipped with the right type of leadership to paint the vision and optimise your digital potential?

Securing the right leadership for growth through multiple key searches

Securing the right leadership for growth through multiple key searches

Alumni was approached by a PE-firm which had recently acquired a SEK 5 billion service company from the CEO/founder. One key and immediate action for the new owners was to start building the future leadership structure to support the aggressive growth and profitability improvement plan in the investment case, as well as to drive a major business transformation creating a modern, professional and long-term management structure in the company.