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Digitally savvy leaders to lead future growth
THESE days, it is rare to end each week without at least one conversation with business leaders on the Fourth Industrial Revolution, and their urgent need to digitally transform.
What is clear from these conversations is that the Fourth Industrial Revolution will bring profound changes to Asian economies in a compressed time-frame, when compared with previous periods of accelerated growth and innovation. Half a century ago, the average life expectancy of a Fortune 500 firm was about 75 years. Today, their lifespan is below 15 years, and declining.
A question my colleagues and I often receive is whether organisations should embark on digital transformation journeys now when social and economic volatility is high. Our answer is always the same: the ability to be resilient in tumultuous times and seize opportunities in the digital economy is the very reason we need to transform with urgency.
This response is consistent with the recommendations put forth earlier this year by Singapore's Committee on the Future Economy, as the nation comes together to transform the economy, keeping it vibrant and resilient, and create opportunities for all.
The reality of our future economy is one where all companies will be digital companies - not only building products, but also new services, to capture business opportunities and effectively engage with customers to meet ever evolving expectations.
So, if we all agree that we need to transform digitally and with urgency, how prepared are we?
A trend observed when we spoke to business leaders as part of the Microsoft Asia Digital Transformation study is that while three in four believed they need to be a digital business to enable growth, only one-third have a digital strategy in place.
We must not mistake digital transformation to be simply about technology. That said, business leaders need to be able to re-envision existing business models and embrace a different way of bringing together people, data, and processes to create value for customers through systems of intelligence. Companies need to become digitally fluent and integrate digital thinking into everyday management.
Beyond cyber threats and security concerns, and the lack of a digitally-skilled workforce, the lack of organisational leadership skills to ideate, plan and lead execution has been cited as a key barrier by business leaders we spoke to.
What is encouraging is that leadership is also being cited as the top accelerator in steering digital transformation. Today, we have observed that the majority of the business leaders we spoke to, expect the chief information officers or chief digital officers or even chief data officers to play a bigger role in driving the digital transformation strategy in Singapore. In addition, they indicated the desire for chief executive officers to take a more strategic and active role in driving digital transformation within their organisations.
Personally, I believe that digital transformation needs to start with business leaders in the boardroom. It is increasingly important for the boards to both lead and navigate this transformation with a judicious combination of business acumen, evolving business models and awareness of technology shifts.
At Microsoft, we are excited about the opportunities available for organisations regardless of size or resources to digitally transform to stay relevant in the digital economy that is already upon us. As a company embarks on a digital transformation journey, here are some questions that the business leader needs to consider:
- Do you have a board-level digital transformation agenda?
Digital transformation is not about outsourcing IT - it requires a board-level directive to re-envision existing business models and to keep abreast of technology shifts and to leverage digital technology that would help transform products and services. Alignment of the digital transformation agenda is critical. It will include the need for new governance model around data, security, and risk management; as well as a new focus on capabilities development of the workforce.
- Is your organisation creating a data- driven culture?
Data is the fuel for digital transformation. In Singapore, 73 per cent of business leaders agree that new data insights can lead to new revenue streams. They want to learn how data, which often already resides within their organisations, can be turned into assets and new capabilities that can catalyse customer interaction, improve productivity, and create new business models. However, often, the data deluge is creating more complexity and is not managed optimally for organisations to drive timely, actionable insights from them. We believe that with the right tools, insights can come from anyone, anywhere, at any time. When that happens, organisations develop what we describe as a "data culture".
- How are you building an organisation that embraces uncertainties?
Henry A Kissinger once said: "The task of the leader is to get his people from where they are to where they have not been." In our journey to the unknown, uncertainties will be our only constant. Organisations that learn to create environments that embrace, rather than suppress, uncertainty, are more likely to accelerate their digital transformation.
We want our employees to be insatiably curious and always learning. We want them to lean in to uncertainty, take risks, and move quickly when we make mistakes, because we know that failure happens along the way to innovation and breakthrough. And when mistakes happen, we want them to be able to unlearn and relearn quickly.
- How are you empowering millennials to change your organisation?
With a huge youth population coming into the workforce today, youths hold a special key to unlocking new thinking in digital transformation as many of them were born in this connected age. They are also more natural in dealing with uncertainties. Organisations are only as successful in digital transformation as their ability to tap the strengths of the new digital generation and integrate millennials more seamlessly in the workplace, where they are empowered to effect change and take risks.
Digital transformation will not be a destination; it will be a constant journey. The earlier we start, and the sooner we have strategic buy-in, the better placed we will be to disrupt versus being disrupted.
I urge government and industry leaders to think big and start with a broader canvas as they paint their digital future - it will be an exciting journey for all.
- The writer is Microsoft Singapore's managing director