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Be a transformational CEO in the digital age
THIS quote is representative of many of the discussions taking place across the boardrooms and executive committees of corporate Singapore: "We are facing increased disruption and threats to our core business and must transform with greater pace and agility if we are to survive, remain relevant and ultimately thrive in the digital age. Digital transformation is the key to our future success."
There is growing recognition that transformation is no longer a destination with a clear start and finish line and a clear formula for success. With new products, services, technologies, and brands entering the market at lightning speed, transformation is needed not just once but over and over again. Future competitiveness will increasingly be determined by those who can continuously adapt ahead of their competitors and make transformation part of their core DNA.
Most CEOs and their boards understand the need for transformation but find themselves facing a paradox: one that demands both continuity and rapid change. While today's reporting cycle and shareholder commitments demand continued returns from the core business, failure to cultivate innovation with sufficient speed at the same time risks undermining future relevance and growth.
Managing this Perform and Transform agenda is the common challenge we see most CEOs and their boards facing. As one Singapore CEO said to us recently: "My role in leading this organisation increasingly feels like standing on two diverging boats in the harbour - one that is focused on short-term performance and delivering my shareholder dividends and one that is all about disrupting and shaping the future ahead of my competitors. I'm neither very tall nor very flexible and my organisation and I are at risk of falling into the bay!"
Successfully managing this tension in the digital age won't come simply from resourcing a technology function or installing a chief digital officer. Increasingly, organisations are realising that while 'digital transformation' is an important rallying call, the transformation extends far beyond technology. It requires new ways of leading and leaders with the courage to challenge the very organisational systems, processes and culture that have underpinned their past success.
`While the Asia-Pacific region has some of the world's leading digital transformation stories, from China's Alibaba to Singapore-based ride-sharing and logistics organisation Grab, an analysis of over 9,000 leaders across eight Asia-Pacific countries (Australia, China, Hong Kong, India, Japan, Malaysia, Singapore, and South Korea) conducted by Korn Ferry has found that leaders in the region are not realising their true potential to lead transformative, disruptive change.
So, what do CEOs who are successfully leading transformational change in today's digital age have in common? And, what can we learn from them?
THE TRANSFORMATIONAL CEO: WHAT THEY DO
Demonstrate leadership flex through 'BOTH-AND' thinking
The pressure to perform in the short term while simultaneously transforming and reinventing the business places a premium on leaders with greater flex in their focus, approach and style. What distinguishes the great from the good transformational leaders is an ability to find 'BOTH-AND' or win-win solutions to seemingly competing priorities.
For example, they find a way to enhance the customer experience while simultaneously reducing the cost to service through digitisation. They focus on the short term while establishing the building blocks for tomorrow's success. They are also able to flex and stretch their leadership style across a number of axes - for example, pivoting between being visionary and pragmatic where required.
Transform the core
Many organisations begin their digital transformation by experimenting outside their core business. They set up an annex, relax some of the rules of their core business and seek to attract and empower a different set of leaders with the mandate to disrupt and transform. There are certainly examples of the prototypes developed within these incubators subsequently generating valuable new ideas that can then be scaled.
However, to succeed in the digital economy, a broader cultural, business and organisational transformation based upon a whole new business model is often required. The CEOs who have been most successful in leading transformation have the foresight and courage to also transform their core business and operations. They realise that only by reimagining the end-to-end customer journey and operational processes, often using digital technology, can transformation of sufficient and relevant scale occur.
Focus on culture
Organisational culture is one of the biggest predictors of future performance. Leaders who lead sustained transformation make cultural transformation a business priority and invest in it like any business initiative with clear KPIs and business outcomes. They also recognise that cultural transformation is essential to attracting, retaining and developing top leaders for future success.
It has been said that all organisations have at least seven future CEOs inside the building, across multiple generations. Who are your organisation's future CEOs? Do you have the talent practices to spot them?
More importantly, do you have the culture to attract, retain and develop the leaders who will lead the future of your organisation? Is your culture helping these leaders to realise their potential or is it holding them back?
Many organisations in Singapore, like their global counterparts, are designed to deliver consistent, predictable outcomes with precision, strong execution and governance - the hallmarks of much of our success to-date. However, in a digitalised world, leaders need to be prepared to move away from traditional power structures, embrace risks and nurture a culture that empowers people and encourages experimentation.
Amazon CEO Jeff Bezos describes their culture as having a 'day one' mindset. Closer to home, DBS describe themselves as being a 20,000-person startup.
THE TRANSFORMATIONAL CEO: WHO THEY ARE - THE 5 Cs
Anyone who calls Singapore home will be familiar with the ambition of many Singaporeans in the 1990s to acquire the 5Cs as symbols of success - Cash, Car, Credit Card, Condominium and Country Club. In the age of disruption, it is time for Singapore's leaders to embrace a new set of 5Cs - five mindsets that underpin their capacity to be agile and to thrive in the digital age:
- Curiosity - Transformational CEOs don't always have to play the "heroic leader". They have the humility to say I don't know and continuously learn about themselves and the world around them. No CEO is ever 100 per cent ready for their role from day one. Indeed, the best CEOs do not see the CEO role as a destination, but as the beginning of a new and exciting learning journey.
- Creativity - Transformational CEOs bring new ways of thinking to solving complex and ambiguous problems. They are also multipliers, raising the quality of thinking from others through insightful questions. They do not feel the need to prove that they are the smartest in the room.
- Connectivity - Transformational CEOs build bridges and break down barriers. For example, they build an emotional connection with customers which enables them to iterate and co-create in the marketplace with customers. They also build and nourish powerful networks both within and across organisations to get things done that could not have been done alone or through formal channels.
- Commitment - In the whirlwind of disruption and transformation, it is easy to forget the basics and the enduring importance of strong execution. Transformational CEOs bring clarity and focus to their organisation by making tough decisions on what they will and will not do. They also consistently walk the talk and deliver on their commitments.
- Courage: For many leaders in Singapore, courage is the key to unlocking their full potential to lead disruptive and transformative change - the courage to think bigger, to declare rather than predict the future and play-to-win rather than not-to-lose. Leaders also need to have the courage to encourage experimentation where success is not guaranteed. They must trust and empower their teams, freeing up their own bandwidth to work 'ON' rather than "IN" the business.
Many of the pioneering business and political leaders in Singapore that we look up to and who built the Singapore success story have demonstrated the 5Cs. It is time for a new generation of leaders to embrace the 5Cs. The success of the past may mean that we have more to lose today if we get it wrong. However, perhaps it is also time for us as leaders to realise that the risk of status quo and staying in our comfort zones may be far greater than the risk of transformation.
- The writer is the regional head for Korn Ferry's CEO Succession practice, based in Singapore.