Professional Documents
Culture Documents
Redefining Leadership
Redefining Leadership
HUMBLE
ENGAGED
Redefining Leadership
for a Digital Age
Rainer Neubauer
Andrew Tarling
Michael Wade
EXECUTIVE SUMMARY 3
Executive Summary
Content
Executive Summary II Many leaders today find it challenging to cope with Four characteristics distinguish agile from non-agile
the increasing pace and unpredictability of change. leaders. Agile Leaders are:
Introduction: The Rise of Digitization as a Disruptive Force 4
For a large number of companies, the root cause of 1. Humble: They are able to accept feedback
this change is disruption fueled by digitization of and acknowledge that others know more than
products, processes, and business models. This they do.
What Defines an Agile Leader? 6
report seeks to explore the skills, competencies, and
2. Adaptable: They accept that change is constant
behaviors that leaders require to succeed in environ-
HAVE Competencies of Agile Leaders and that changing their minds based on new
7
ments characterized by such disruption.
information is a strength rather than a weakness.
Humble 8
This report is based on research conducted by the 3. Visionary: They have a clear sense of long-term
Adaptable 10
Global Center for Digital Business Transformation, an direction, even in the face of short-term
Visionary 12 uncertainty.
IMD and Cisco Initiative (DBT Center) and HR
Engaged 14 Consultancy metaBeratung. The data come from two 4. Engaged: They have a willingness to listen,
sources: a survey of 1,042 executives, and in-depth interact, and communicate with internal
The Actions of an Agile Leader 12 interviews with nineteen digital leaders, all conducted and external stakeholders combined with
Hyperaware 18 between October 2016 and January 2017. a strong sense of interest and curiosity
in emerging trends.
Informed Decision-Making 20
The research found that leadership effectiveness in
Fast Execution 22 disruptive environments shared many of the same In addition, we found that Agile Leaders exhibited
characteristics as leadership in more stable environ- three key behaviors helping them to successfully
The Dangers of Non-Agile Leadership 24 ments, with a few notable exceptions. This report will navigate disruptive environments. These three behav-
Slow Driving 25 focus on these exceptions. We refer to executives who iors mirror the organizational agility capabilities
are successful in disruptive environments, particularly described in the book, The Digital Vortex. They are:
Careless Driving 25
those that are characterized by digital disruption, as 1. Hyperawareness: They are constantly
Wrong Direction 25 Agile Leaders. scanning internal and external environments
for opportunities and threats.
Conclusion 26 We found that Agile Leaders, those leaders who rated
2. Informed decision-making: They make use
highly on the competencies and behaviors mentioned
of data and information to make evidence-based
Methodology on the right, tended to significantly out-perform other
27
decisions.
leaders on measures such as work engagement and
leadership effectiveness. 3. Fast execution: They are able to move quickly,
often valuing speed over perfection.
© 2017 IMD International Institute for Management Development and metaBeratung GmbH. All rights reserved.
4 INTRODUCTION INTRODUCTION 5
7%
2% Agile Non-Agile
Leaders Leaders
Not at all Somewhat Fairly Very Do not 29% 28%
significant significant significant significant know
13%
“How significant has the effect of digital disruption
been on your industry sector?” In transition
6%
2% 43%
Humble
revealed, however, was a change in the balance of these factors.
With Agile Leaders, we observed the increasing importance of
some key competencies and behaviors and a lessening in the
importance of others. This new leadership profile was found to
be remarkably consistent across industries and geographies.
Visionary
Engaged
8 HAVE COMPETENCIES OF AGILE LEADERS HAVE COMPETENCIES OF AGILE LEADERS 9
Humble
Humble: An ability to accept feedback and acknowledge that others Google looks for the ability Leaders frequently do not have the time to invest personally in this, but Hire people who
know more than you. to step back and embrace encourage individuals and teams to contribute their knowledge, so that are the experts.
other people’s ideas the organization can become an effective distributed knowledge system. Trust in them.
In an age of rapid change, knowing what you don’t know can be as valuable when they’re better. JAMES HIND
as knowing what you do. Unfortunately, leaders are often shielded from “It’s ‘intellectual humility.’ Being humble means learning to accept, welcome, and leverage the Founder/CEO Carwow
learning about new developments by the sheer volume and variety of new Without humility, you are knowledge of team members, peers and employees for the benefit of the
information that is captured across an organization’s ecosystem. Agile unable to learn”. business. Humility is also relevant when dealing with customers – actively
Leaders need to be open to learn, and be willing to seek input both from LAZLO BOCK seeking to understand and gain deep customers insights is an important
inside and outside their organizations. They also need to trust others to Former SVP People Ops, Google, attribute of the Agile Leader.
as quoted in the New York Times
know more than they do. We found leadership humility to be equally
important for start-ups as for large incumbents. Being humble in approaching leadership may sound inconsistent with the In former times, the leaders
need to project an image of confidence and authority. We do not regard were really the experts, but
Agile Leaders understand the need to build the right team and retain key You should be trying to work humility as an abdication of the need to provide a strong vision, as they are not any more, they
staff. They focus on making good employment decisions and strongly back on the basis that everybody described later, but as an acknowledgement that the current speed of are like a facilitator. They are
continuing development of their teams. With rapid changes in technology, you appoint is significantly change outstrips any leader’s personal store of knowledge or experience. making things happen, shaping
it is necessary to invest time and resources to keep employees up to date. better than you in some area Accepting that a single person cannot know everything needed to make the environment, and making
or another, if not everything. a decision is a critical component of the Agile Leader approach. Humility, people happy that they can
COLIN HUGHES in this context, may be readily understood as practicing a philosophy of really work on the problem.
MD Collins Learning mutual respect – respect for the ideas and knowledge of others at least OLE MENSCHING
as equal to one’s own. CEO/Founder Careerteam
50%
Agile leaders encourage
team development
14%
8% 86%
Agile Non-agile
leaders leaders Agile leaders
“I encourage my team to coach Non-agile leaders
me in the use of digital tools and
technologies.” “I enable my team members to
develop themselves.”
10 HAVE COMPETENCIES OF AGILE LEADERS HAVE COMPETENCIES OF AGILE LEADERS 11
Adaptable
Adaptable: An acceptance that change is constant and that …you have to be sure that you Being adaptable is key to the success of both the organization and the The amount of knowledge
changing your mind based on new information is a strength rather are able to correct wrong Agile Leader. At an organizational level, it means being ready to innovate has increased, the accessibility
than a weakness. decisions or weak decisions. and react to opportunities and threats as they appear. At an individual has improved, but also the
You have to be able to say, okay, level, it means being open to new ideas, to changing an opinion when half-life of knowledge is
It goes without saying that an ability to adapt is critical in a complex and yesterday, I said left and today, convinced of the need, and to successfully communicate that revised decreasing, so I think as a leader,
changing environment. However, focused adaptability based on changing based on this, we are going right. opinion to relevant stakeholders, like peers, teams, and customers. the role has changed into “how
information is a distinct competency that needs to be distinguished from It has to not be a weakness for Changing your mind, which to some is regarded as a sign or weakness or can I leverage the knowledge
random vacillation. Agile Leaders adapt their behavior in the short term you. It is a necessity of the lack of conviction, should be a regarded as a strength when faced with which is within my team
based on their ability to make evidence-based decisions. environment of today. changing information. Agile Leaders are not afraid to commit to a new members, in a better way?”.
LOTHAR RAIF course of action when the situation warrants it. HEIKO SCHICKLE
Rapid technology change and the appearance of new digital competitors Head of Banking Support, Head of Digital,
Credit Suisse Hilti Deutschland
requires adaptation at a leadership level. However, it is not just the
rapidly changing digital context that requires adaptability from leaders
today. The global reach of digital technologies has opened up new
frontiers for organizations, shrinking continental divides, and erasing
traditional boundaries between industries and nations. We found that You need to do the planning,
Agile Leaders are adept at dealing with complexity and less reluctant to otherwise you won’t get Agile leaders are not afraid
to adapt their behavior
change their minds in the face of new information. anywhere, but you need also
at the same time to be prepared 67%
to reassess and re-evaluate
and not love your own scenarios
Agile leaders or plans too much. You need
listen to their teams
to be open to external impulses
41% all the time. Carlos Torres Vila
MARIA HAMREFORS CEO BBVA
CEO Akademibokhandlen AB
“We are taking decisive steps in the Group’s transfor-
mation in order to create the best possible experience
for current and future customers. The goal is for BBVA
to be the best bank of the digital age.”
Visionary
Visionary: A clear sense of long-term direction, even in the face of ...I think you have to As strategy has transformed from long-term linear planning to more agile A successful leader
short-term uncertainty. be bolder as a leader movements with a common focus, so keeping the vision “true” whilst can break down the vision
because by definition adapting in the short term has become a critical competency for leaders. into strategy and can explain
It has always been important for a leader to have a clear vision for the disruption is bolder, The unpredictability of business ecosystems is creating a situation in to every employee what
future of their organization. In times of rapid technology and business you have to have which traditional analytic business approaches are failing to provide the the vision means for their job.
model disruption, with opportunities opening up on all sides, a clear vision the courage of long term definitive strategies and marker posts that leaders have relied OLE MENSCHING
becomes ever more critical. Indeed, an ability to set a course and stick to your convictions... on in the past. Indeed, vision is always in tension with adaptability. Agile CEO/Founder Careerteam
it was strongly endorsed both by the executives we surveyed as well as by You have to wear your Leaders deal with this tension by using vision to motivate and inspire,
those we interviewed. Visionary leaders have a well-defined idea of where vision on your sleeve. whilst at the same time adapting rapidly to current, contextual business
their organizations need to go, even if they do not know exactly how to RUSSELL QUIRK situations.
get there. CEO eMoov
Being visionary in the context of Agile Leaders isn’t restricted to digital You have just got to
disruptors – although clearly leaders in these contexts are operating with be comfortable knowing
a level of visionary insight. Being visionary is equally important for legacy that the end game certainly
organizations, whose leaders need to define and clearly articulate long- is uncertain, but you know
term aims and objectives. For example, General Electric has a vision to you’ve got to make the moves,
become the dominant player in the industrial internet, a term that it coined, and you’ve got to be happy
which is a major departure from its traditional manufacturing roots. making those moves.
EDWARD HARDING
MD Sales, Coleman Research
Agile Non-agile Jeff Immelt had the vision to see what GE needed to
leaders leaders become, not just what it was. His vision has reshaped
GE into a global force in the area of the industrial
internet.
14 HAVE COMPETENCIES OF AGILE LEADERS HAVE COMPETENCIES OF AGILE LEADERS 15
Engaged
Engaged: A willingness to listen, interact, and communicate with Listen and trust. Agile Leaders scored highly on communication factors such as “ensuring …leaders of disrupted
internal and external stakeholders combined with a strong sense This can’t be a constant interchange of information within my team” (85% often/ businesses, need
of interest and curiosity in emerging trends. a half-hearted effort. frequently) and “encouraging teams to challenge views and opinions” to listen much,
TERRY BENNETT (86% often/frequently). much more.
Articulating a clear vision of the future and being adaptable enough to Fortium Partners JERKER NILSSON
recognize when the course needs to be modified, are Agile Leader The speed of change, not just in technology, but in business models and CEO SRF
competencies. Successful communication of these factors through competitive dynamics, means that executives simply have to be in listening
constant engagement with stakeholders is a requirement. Agile Leaders, mode all the time; what they know today may be irrelevant tomorrow. Agile
whatever their position in an organizational hierarchy, are always Leaders are listeners and communicators. They spend huge amounts of
engaged, whether with customers, partners, suppliers, team members, time interacting with the outside world. This interaction may be face to
staff or their broader societal and industrial ecosystems. This desire to face or it may be virtual.
explore, discover, learn and discuss with others is as much a mind-set
as a definable set of business-focused activities. So, while being humble implies that the Agile Leader knows the limits of
his or her own capabilities, being engaged is how he or she can stay as up
to date as possible. Being humble without seeking to engage is simply weak
leadership. It is also clear that engagement drives the business-focusing
Agile leaders competencies of vision and adaptability.
share information
with their teams
67%
Agile leaders monitor
customer needs
56%
Robert Gentz
CEO Zalando
Competencies,
Personality, and Behaviors ENGAGED HUMBLE
I am always in I accept that others
The four HAVE competencies described previously are facets of a leader’s listening mode. know more than me.
personality. Personality is partly genetic and partly shaped by early expe-
riences. It defines the space, the repertoire, and the comfort zone in which
a person acts. The construct of personality has been globally researched
for over one hundred years and scientists agree that it is a strong predictor SLOW
of business outcomes. DRIVING WARNING:
Knowing what needs to
The Behaviors
of an Agile Leader
FAST
Digital Business Agility (DBA), as outlined in the book Digital Vortex EXECUTION
(2016), described the following set of three capabilities that are vital for A willingness to move quickly,
often valuing speed over perfection.
incumbent companies to compete successfully in turbulent environments:
hyperawareness, informed decision-making, and fast execution. VISIONARY ADAPTABLE
Combining HAVE competencies with agile behaviors provides a powerful A clear vision is more Changing my mind is
important than a detailed plan. a strength not a weakness.
amplifying effect for Agile Leaders. Indeed, when we examined leaders
who scored in the top quartile of each of the DBA related survey items, we
found that they were significantly better equipped to deal with today’s
disruptive business environments.
18 AGILE LEADERS ARE HYPERAWARE AGILE LEADERS ARE HYPERAWARE 19
Agile Leaders
are Hyperaware
Hyperawareness: Constant scanning of internal and external There needs to be A part of hyperawareness in digitally-disruptive environments is to follow It’s not just about
environments for opportunities and threats. an everlasting radar, digital technology trends, and while leaders do not need to be technically the customer anymore,
a high speed radar, proficient, they need to keep up with relevant advances in technology. it really is about everything
Good leaders are constantly scanning their environments, both inside where you constantly Agile Leaders, in particular, reported that being “tech savvy” and being that is going on around the
and outside their organizational boundaries. With technology-driven track the situation. open minded to the role of new technologies within their general business industry, even adjacent
change accelerating across industries, the need for leaders to look ALEXANDER DAHM contexts was important. industries, and drawing
outwards, and not just at their competitors, is evident. But Agile Leaders VP Head of Space on parallels, otherwise
Equipment Ops, Airbus
do more than this, they listen intensely to diverse voices and solicit inputs Individual hyperawareness means spotting emerging competitive threats you don’t see what’s
that feed their hyperawareness. or digital opportunities. To counterbalance the potential for change that happening in terms
threatens to overwhelm linear strategy, the requirement for Agile Leaders of those young firms…
There are obstacles, of course, such as getting the right inputs, avoiding … they need to make to use their strength in vision to keep their organizations on track has EDWARD HARDING
confirmation bias and organizing information flows efficiently. But, to be sure that their team, their never been greater. So while being hyperaware is about engaging, seeking MD Sales, Coleman Research
an Agile Leader is to be hyperaware, and as one respondent put it, “Why is organization, is imbued new insights and adapting, it also reinforces the need to provide guidance
hyperawareness really important nowadays? Because the speed of change with a relentless focus through strong vision.
is so much faster.” (Jerker Nilsson – CEO SRF) on what is going on
outside the business.
COLIN HUGHES
CEO HarperCollins
Agile leaders monitor new
technologies in their industry
62%
Mathias Dopfner
CEO Axel Springer
13%
Recognizing that the U.S. tech culture was something
they needed to understand, he set out to learn it, not
by employing high-powered consultants, but by
immersing his top team in Silicon Valley for almost a
Agile Non-agile year. His aim was to deliberately force them out of
leaders leaders their comfort zones. “I wanted people to be in student
“I monitor new technologies mode”. Having the humility to pause and learn has
in my industry.”
paid huge dividends for the entire organization, now
a European digital publishing powerhouse.
20 AGILE LEADERS PRACTICE INFORMED DECISION-MAKING AGILE LEADERS PRACTICE INFORMED DECISION-MAKING 21
Agile Leaders base their Agile Leaders make While executives in the study were strong supporters of utilizing digital I’d say it’s probably 80/20,
decisions on facts and data use of business tools and processes to support decision-making, they were also aware or 90/10, say 80% data
simulations that “it’s not the access to information, it’s what you do with it that counts” or 90% data, and the
42%
or scenarios
as Mary O’Conner from MacMillan Education told us. There was also a rest being intuition.
to support decisions
recognition that the availability of data does not in itself result in better MARIA HAMREFORS
decision-making. Indeed, for many organizations, the volume of data was CEO Akademibokhandlen AB
27% outstripping their capacity to draw insights from it at speed.
1% 35%
5%
Agile Non-agile
leaders leaders
22 AGILE LEADERS PRACTICE FAST EXECUTION AGILE LEADERS PRACTICE FAST EXECUTION 23
52%
84%
Heiko Schickle
Agile leaders
Hilti Deutschland
Non-agile leaders
The Dangers
of Non-Agile Leadership
While Agile Leaders are able to balance hyperawareness, informed Slow Driving:
decision-making and fast execution, many more leaders struggle.
Leaders who use their hyperawareness to the full extent should be well
The dangers of only applying one or none of the three agile behaviors aware of what needs to be done in relation to new threats and opportu-
are clear. Being hyperaware, for example, but unable to make informed nities. With the right balance of individual competencies, they can stay
decisions or act quickly will not lead to a good outcome. Making a ahead of the game, spotting trends early and moving to make informed
data-driven decision, based on incorrect data, and doing it slowly will decisions. With data and analytics in place, these decisions can be
probably also not turn out very well. However, even applying two of the made, incorporating diverse and inclusive viewpoints to specify benefi-
three behaviors can lead to sub-optimal outcomes. cial actions. But all of this progress can be wasted if they cannot execute
at speed. This situation leads to the frustration of “slow driving” where
the leader has the vision and the road map, knows where they should be
headed, knows how to get there – but is stuck in the slow lane watching
Not all Leaders are Agile 531
competitors pass at will.
Careless Driving:
Wrong Direction:
Conclusion Methodology
The volatility of business environments driven by rapid, accelerating, This research utilized a mixed-method approach in order to quantify the
digital technology and business model change requires a new manage- effect of digital disruption, and assess the ability of leaders to respond.
ment approach, which we call Agile Leadership. Our research suggests
that Agile Leaders combine high levels of humility, adaptiveness, vision, The quantitative component of the research involved an online self-reported
and engagement with the specific business behaviors of hyperawareness, questionnaire completed by 1,042 respondents between October and
informed decision-making, and fast execution to navigate through disrup- December, 2016. The response rate was 7.5%. Respondents were mid to
tive operating environments. senior executives from 17 industries (or “other”) in 78 countries. The items
were developed by the DBT Center at IMD and metaBeratung.
It may not be too far-fetched to regard these turbulent times, where new
ventures guided by management novices are the most valuable compa- The qualitative component of the research consisted of semi-structured
nies on the planet, as a “comet impact” moment for management theory. telephone or video-conference interviews with nineteen leaders from ten
What responses are needed from the leaders of incumbent countries. The questions were designed to gain further insight on the
organizations? topics covered in the quantitative survey. The interview questions were
developed and piloted with a subset of leaders who were chosen to
In this report, we argue that traditional organizations can compete and represent a cross-section of incumbent organizations, small-scale
win in this new digitally-disrupted world if their leaders are able to adapt disruptors, and those who had been disrupted. The interviews were
to it. One only needs to look at leadership success stories of large incum- conducted between November 2016 and January 2017.
bents such as GE, Axel Springer, and BBVA to know that all is not lost;
indeed the prognosis for incumbents is excellent, provided they are
managed and led in an agile manner.
The DBT Center and metaBeratung have identified the underlying Industries Represented in the Survey
personality characteristics and business behaviors of Agile Leaders.
This knowledge will allow us to measure Agile Leadership and suggest Consulting
Acknowledgements