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Leadership in the Digital Economy (Industry 4.0)

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Leadership in the digital
economy

Professor Marcus Bowles

DeakinDigital
@deakindigital
www.deakindigital.com
Agenda: Answering some critical questions
1. Why do leadership capabilities need to transform?
2. How do we define leadership given new structures and business models?
3. What are the most important leadership capabilities and why is competency not
enough?
4. How do we develop our leadership capabilities but assure global comparability?
5. How do we cultivate talent and high potential at all levels?
6. If academic qualifications are too rigid and slow to change, how do we develop,
recognise and recruit leaders with the right capabilities?
Leading in times of digital
disruption
Workforces in Technology
transforms
Turbulent Shift to
distributed
workplaces &
markets Career ladders
disappear as

Futures and
contracted
expertise
occupations or
boundaries
blur
There exists enormous
amounts of doom and
Global
negative hype
surrounding the
competition
for leadership
talent
WTF Shelf life of
skills shortens
radically

development of
leadership capability in Leaders
Org. structures
the digital age. & business
change
careers and
models
Tiers of jobs more
transform
leadership regularly
jobs disappear
in many
industries
Solution focus: Credentials based on capabilities solve
wicked problems for organisations
1. Securing the right leaders to meet the change challenge
2. Finding the “right” leader, for the right job at the right career
level when structures and business models are changing so fast
3. Removing the increased cost of developing leaders as
education providers fail to meet future needs
4. Sorting and making sense of the array of taxonomies or
complex skill/ competency models that promote technical
proficiency but fail to keep pace with a company’s
leadership needs
5. Identifying and providing a leadership development pipeline
for talented, High Potential (HiPo) employees
6. Valuing and reporting leadership capability at an organisational level
THOUGHT BUBBLE
Why do 9 out of 10
executives agree the digital
economy is changing how
they do business, see
leaders as driving success,
but believe they need to do
more to develop their
leaders?
QUESTION 1:
Why do leadership capabilities need to
transform?

Revisiting some fundamentals

NEWS FLASH:
We aren’t in the Industrial Age anymore!
The Digital Economy
We are in an age of CONTINUOUS DISRUPTIVE CHANGE!

6
Digital Metrics:
• # Internet subscriptions (global)
• # Broadband connections
• # Mobile internet suscribers
Volume

• # Households connected
• # Transactions online 5
• # Social media users

4
3
1 2

1995 2000 2005 2010 2015 2020

Year
QUESTION 2:
How do we define leadership given new
structures and business models?
SPEED NETWORKS
System 1
Fast thinking, rapid to respond and change: Fast to change
• Strategic agility
• End-to-end view on continuous
improvement
• Continuous innovation (systems focus)
• Short product and service lifecycles
• Human value lies in the organisation
culture and capacity (capability)
• Courageous and resilient
• Builds intellectual horsepower
• Cooperative
• Proximity to potential: the gap between
where we are and where we need to be
• Competitive advantage lies in seizing
opportunities and enabling relationships
with partners/ customer/ market

Yo
ur
Slow to change System 2
Slow thinking, slow to change:
• Seeks stability and standardisation
• Focus on operational level continuous
improvement (process and efficiency)
• Long term lifecycles for products and services
• Focus on operational performance
Bureaucracy • Human value lies in doing a job well
(competence)
• Create predictable, automated systems
• Seeks skills over intelligence
• Persistent
• Focus on proximity to competitors
• Competitive advantage lies in market share
NETWORKS:
From Linear to Networked: Products to Platforms
Input Transformation Output
Business models focussed on products
Operations/ Value chain/ Supply chain

Consumers Platform Producers

Virtuous Cycle/ Relationships/ Value Exchange

Disruption is changing structures & workforce design:
Dematuring System 2 entities
From traditional hierarchies to flatter
services oriented or matrix (corporate
services) entities with middle
management and knowledge workers
replaced through efficient data analysis,
processing and improved systems

From traditional hierarchies and flatter

structures to streamlined production or
customer facing roles as robotics,
automation and cloud technologies
replace routine skilled workers
Disruption is changing models: Dematuring System 2
entities
Locked in capabilities, culture and processes.
Tired, low margins, and hard or too slow or
expensive to change

Embed agile projects in new markets or growing

market segment. Run as an independent project
the aim is multiply the projects and create a
culture and leaders able to drive transformation
Buy it, graft it on, or spin off an
independent entity in new
markets or growing digital
platforms or channels. Provides
the lifeline for the company to
fund transformation or pivot/
reposition.
QUESTION 3:
What are the most important leadership
capabilities and why is competency not
enough?
Capabilities go deeper than competencies

© Bowles, 2003
Capabilities mesh individual, team and
organisational success
Close match
Responsive and agile
Shared vision for future
Strong Leadership
 Engaged employees
 Motivated and committed employees
 Innovation
 Effective talent pool
 Good performance

Poor match
 Inflexible, slow to change
 Poor alignment to future vision
 Lack of leadership
 Low motivation and commitment
 Poor or inconsistent performance
 Low responsiveness
 Low attraction to new recruits

Now Future

Capabilities – Skills, knowledge and attributes required by the individual to perform roles that
contribute to the performance, culture and organisational vision for future.

Other Competencies – Technical and job specific attributes required by individuals to perform task
or static job role. © Bowles, 1999
20.
Leadership capabilities that drive organisational agility

Leadership capability frameworks have to focus on driving improvement and

positively impact one or more of the following:
A. Strategic responsiveness to environmental turbulence
B. Operational and workforce responsiveness to customers and change
C. Adaptive capacity
D. Flexibility
E. Agility
F. Resiliency(1)

(1) McCann,J.E. and Selsky, J.W. (2012), Mastering turbulence: the essential capabilities of agile and resilient individuals, teams and
organizations, Jossey-Bass, San Francisco, CA.
Essential leadership capabilities in the Digital Economy
Analysing leadership capabilities developed over the previous 5 years for 10 organisations
(public and private) that collectively employ >900,000 Australians the following leadership capabilities
have been found to be the 12 most common indicators of a leader’s potential and an organisation’s agility
in the digital economy(1):
1. Future Orientation and Vision*^
2. Develop Others
3. Inspire and (Emotionally) Engage People*^
4. Change*^
5. Innovation*
6. Results Orientation^
7. Self-awareness and Courage
8. Critical Thinking * These capabilities have been found to be critical indicators of future potential in
Australian organisations of all sizes.
9. Collaboration and Influence^ ^ These capabilities have been shown to be critical indicators of high performance
10.Cultural awareness workplaces and organisational culture in Australian firms(2)

11.Communication (1)
Bowles, M. (2015). Capabilities for Leadership and Management in the Digital Age, Working Futures, Melbourne.
(2)
Hull, D. & Read, V. (2003). Simply the Best Workplaces in Australia, Working Paper 88, ACIRRT, UniNSW; & Boedker C.,
12.Technical Mastery Cogin J., et al (2011). Leadership, Culture and Management Practices of High Performing Workplaces in Australia, DEEWR.
QUESTION 4
How do we develop our leadership
capabilities but assure global comparability?

Credentials and the liberation of

development while still achieving global
recognition of talent.
Professional Practice Credentials
Through Recognition of Professional Practice, we liberate the knowledge,
skills and potential of the experienced workforce.

Credentials recognise professional expertise and benchmark this against

recognised global standards.

We’re creating a new currency for career progression that employers

can recognise, understand and value.
 Professional Practice
Capabilities and Credentials
Core employability / soft skills Leadership Professional/technical
expertise

• Innovation
• Risk management
• Project management
• Customer focus
• Data-driven marketing
• Industry specific

Further information: https://www.deakindigital.com/browse-credentials

DeakinDigital Commercial in confidence

 Professional Practice Credentials - LEAD

Leadership

© DeakinDigital Pty Ltd

Capabilities are leveled and form benchmark scale to
compare and align different systems and approaches
Australian DeakinDigital Levels of Professional
Qualifications
Qualifications Professional Leadership Frameworks
(Oceania & Global)
Framework (AQF) Capabilities Development (e.g. Engineers)

Masters AQF 9 Advanced Principal/ Senior

Organisation Engineer
Graduate Cert./
Graduate Diploma/ AQF 8 Proficient Division/Function Practicing Engineer
Honours

Bachelor Degree AQF 7 Intermediate Operational Graduate Engineer

Associate Degree AQF 5 Developing Associate
(Diploma) Team
Certificate I to III AQF 3 Entry Individual Technician
 LEAD Credentials
The Professional Capability Standards Framework has capabilities, criteria at each level provide the means to
profile leadership jobs and high potential individuals with leadership talent.
The LEAD specialist professional capabilities encompasses four credentials:

L ead and develop people

E mpower others
A dapt and change
D rive strategic results
It is also important to note LEAD credentials complement and are intended to be used in conjunction with the
other credentials (See next slide).
Leadership Capabilities - Credentials
Mapping of research indications of top 12 leadership capabilities and the DeakinDigital professional capability
standards framework and resulting credentials.
LEAD Credentials
Lead and Develop People
Empower Others
1. Future Orientation and Vision*
Adapt and change
2. Develop Others
Drive Strategic results
3. Inspire and Engage People*
4. Change* SPECIALIST Professional Expertise Credentials
5. Innovation* Innovation
6. Results Orientation* CORE Credentials
7. Self-awareness and Courage Self Management (+ Professional Ethics)
8. Critical Thinking Critical Thinking
9. Collaboration and Influence Teamwork (+ Digital Literacy)
10. Cultural awareness Emotional Judgement

11. Communication Global Citizenship

12. Technical Mastery Communication

Professional Expertise

* The capabilities associated with high potential and talent are covered in the LEAD Credentials
QUESTION 5:
How do we cultivate talent and high
potential at all levels?
Levels of leadership
Lead the
Organisation

Lead the
Business/
Function

Lead Operations

Lead Others

Lead Self
Levels influence the mix of capabilities a person
will typically require
We know leaders transition in a talent pipeline
Levels Challenges Capability Scope (examples only) Focus of time
Setting a compelling vision for the future; strategically positioning brand & org.
Lead the Moving from a functional to externally E in a market; researching trends; finding market opportunities and planning Strategic long term
oriented, cross-
Organisation options; sponsoring major change; forging supply chain & business partnerships; view (5+ yr)
functional, multi-disciplinary perspective
shaping a global body of knowledge

Improving operations, seizing opportunities, coordinating development of new

Responsibility for focus on budgets, wider
Lead the Business/ scale improvements and positively
D products and services; subject matter expert in a body of knowledge; brand
Medium-Long term
management; completing successful compliance audits; responsibility for
Function influencing other view (2-5yr)
budget formation; dealing with industrial or workplace conflict; having to
leaders, managers and the workforce
manage employee exit due to performance or misconduct deficiencies

Move from team to multiple team,
advocating for resources and priorities,
Lead Operations working with
stakeholders and often throughout a value
stream
Sponsoring or initiating innovations; implementing new products & services,
C managing major projects (change or otherwise); motivating workforce plans;
Medium term view (1-
transforming value stream; developing learning strategies for cross-disciplines;
2yr)
coaching & mentoring other managers; galvanising actions that improve
operations

Engaging people, overcoming barriers to change; coaching others & motivating

Focussing on others and goals high performance from team members; improving processes; resource use and
Lead Others more than discipline-based or specialist B goal attainment; delegating activities; running complex projects or initiatives;
Short to medium term
view (6-18mth)
expertise measuring performance; developing OHS policies & procedures; dealing with
difficult conversations

Collaborating; discovering & initiating innovations or opportunities to improve;

Empathy with others and knowing one’s undertaking self-development; appreciating value chain/ stream; initiatives in Short term view (6-
Lead self own strengths and weaknesses.
A solving customer problems; working safely; appreciating cultural differences; 12mth)
communicating and listening to diverse people and groups
(1) Charan, R., Drotter, S. & Noel, J. (2010), The Leadership Pipeline, Jossey-Bass, San Fransisco.
A workforce can use its systems and models but still develop and issue a
globally recognised credential throughout the pipeline
At each level and transition it is possible to anchor personal,
career and performance development discussions and systems to
the credential framework. The underpinning credential model can
be used by workplaces or organisations to build their own career
pathways and job profiles that establish required:
Core Professional Capabilities
+
LEAD specialist professional capabilities
E
+
Professional Expertise specialist area of professional
capability
D
For the individuals this provides significant insights regarding
current and future capabilities, strengths and gaps. The
calculators can assist insight based development decision making C
and career planning.
1. DEVELOPMENT INSIGHT: Do I know what I need to focus on?
B
2. CAREER CHOICES: Is this my best future career pathway?
3. GAPS: What new skills and capability do I need? A
4. EXPERIENCE: How can I apply my skills and knowledge to
confirm expertise?
5. CREDENTIALS: What credentials best recognise my capacity,
expertise and career progress?
QUESTION 6:
If academic qualifications are too rigid and slow to
change, how do we develop, recognise and recruit
leaders with the ‘right’ capabilities?

Credentials recognise the capacity to do and

expertise, it is agnostic to context, learning or
development activity or the title of a role.
Developing the right capability in our workplace, at the right time, strips
out training costs
Credentials flip the L&D (including
leadership development) focus from
inputs to applied outcomes.
EXPERIENCE and in-house
development activities now can be
recognised under a globally portable
digital badge/ testamur.

All development can be gamified,

small, bite-sized and highly
personalised with stackable
credentials that build into a
qualification
• Less expense
• Greater relevance
• Immediate business benefit
• Globally portable
Credentials can stack into
qualifications that fit the business:
Example: Master of Professional Practice (Leadership)

Personal Principles of
Leadership Leadership Leadership
Preparatory Research & Strategy
Unit Analysis Unit Capstone Unit

1 credit point each Aligned to breadth and 2 credit points

Aligned to Deakin University
depth course and
non-discipline specific graduate
Deakin University graduate learning Deakin University
learning outcomes
outcomes (Leadership)
Start Anytime Start Anytime
Cloud Campus Professional Practice Credentials – DeakinDigital Cloud Campus
Credentials can be bundled or clustered
This is an example how a “Developing” level credential packaged for can be bundled to recognise an existing
workplace leadership program within a telecommunications company. Assessment methods may then be
developed to identify how evidence will meet business and the requirements for each credential.

Communication & Influence Change & Innovation Motivation & Courage Frontline Leadership
Credentials independently benchmark talent and HC value
Assessing Talent
Overall TM Approach
• Management Appraisal
• Baseline Capability Model
• Structured feedback
• Talent Management Audit
• Succession planning
• Talent audit and progress support
scorecard/metric
• Executive Reviews
• Human Capital value
• Board Review
Recruiting Assessing
for talent Capability/ talent
Credential

Acquiring Talented Leaders Developing Leadership Talent

• Value-added recruitment
Developing • Developmental feedback
- Capability-based talent • Individual development
- Use agreed capability planning & support
set & job specific needs
• Career plans
• Integrated HR support • Mentoring and coaching
through multiple data
sources
• Link to leadership, futures,
technical & other
capabilities/competencies
 DeakinDigital DeakinPrime

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