Dodging Digital Blind Spots

Leaders today have a huge developmental challenge. Many lack the skills and mindset to thrive in the digital economy.

MIT SMR and Cognizant recently completed a survey of more than 4,000 managers and leaders from over 120 countries around the world on the Future of Leadership in the Digital Economy. The results revealed that only 12% of respondents strongly agreed that their organizations’ leaders had the right mindset, and a scant 9% strongly agreed that their leaders had the proper skills to compete effectively in the new economy. But we shouldn’t start pointing fingers at only our most senior leaders: Just 13% of all executives surveyed strongly agreed that the rest of their organizations were prepared. Interviews with executives and scholars echo concerns about individual preparedness to lead in the digital economy. “When it comes to leading in today’s digital world,” notes Michael Schrage, an MIT Initiative on the Digital Economy researcher, “what I don’t see are enough leaders who are living in the business and leading by example. Actions speak louder than words, and actions spring from mindsets.”

The mindset gap is more concerning than the skills deficit. Why? We can train for the digital skills that are important for future success, but developing a digital mindset is a more complex challenge because it is a less tangible one to address. And here’s my biggest concern: Mindset gaps create blind spots. It’s tough to be a great leader when we don’t know what we don’t know.

There are four digital blind spots we need to avoid: strategic, cultural, human capital, and personal.

Blind Spot No. 1: Strategic

An overwhelming majority of respondents from our survey indicate that the most important leadership requirement in the digital economy is providing clarity of purpose, vision, and strategy. Let’s say you are in a business that is rapidly migrating from products to platforms. You are most likely doing so in an ecosystem environment — a complex array of partnerships with users, customers, and suppliers. You might even partner periodically with competitors when mutual benefit overshadows the core rivalry. This is all about producing network effects — facilitating a process in which users create enhanced value for other users. This approach flies in the face of the more traditional view of creating strategic advantage, which focuses almost exclusively on optimizing organizational capabilities to win rather than optimizing the efficacy of interactions among users to create communities.

Without an investment mindset in platforms that create network effects, a company’s leaders risk creating strategies that emphasize product and service optimization in an environment that is moving in a different direction.

Blind Spot No. 2: Cultural

“How would you describe your organizational culture?” I’ve asked this question hundreds of times to students and managers from around the world. The most popular answer: The way things are done around here. This response often leads to a discussion about how strong the organization’s everyday behavior is rather than the rewards and consequences that reinforce or adjust those behaviors. Without these reinforcing mechanisms we might find ourselves working in an environment in which we talk about collaboration but reward silo behavior.

This same danger point exists if our leaders talk about digital leadership but don’t practice it. This is what Schrage was referring to when he expressed concern about leaders not living in the business. He puts it simply: “What does it mean to lead by example? Are they using Slack? Are they running their meetings and interactions off digital devices? Are they not only blogging but commenting on other people’s blogs?”

If we fail to get beyond just talking about building agile systems and processes, or stimulating breakthrough innovation, or developing resiliency in our work environments, we could easily develop cultural blind spots by growing increasingly out of touch.

Blind Spot No 3: Human Capital

How likely is it that if you, as a leader, lack the capacity to spot shifting trends in your industry, you’ll know what skills and behaviors will be needed to win in the future? How likely is it that if you talk a lot about driving innovation through digitalization but aren’t doing much to make that happen, you’ll be able to make your company a world-class talent magnet? People with the skills, behaviors, and mindset that are fit for the future are not very likely to be attracted to a company that is in love with the past. High-value prospects in the digital world want to know that their talents will be recognized, appreciated, and rewarded. They aspire to work with and for leaders who are invested in their continuous development and growth. They want to know how their work contributes to their corporate strategy, and they want to feel as though they are contributing to making the world a better place. As a leader, do you get this enough that you’ve created talent policies and practices designed to attract, motivate, and retain these types of people? If not, you might be subject to a blind spot that could be fatal — not being able to get the very best so that your organization can be at its very best.

Blind Spot No. 4: Personal

Remember the first data point from our survey that indicated that only 12% of our respondents felt their leaders were prepared to lead in the digital economy? When respondents were asked to answer that same question about their own readiness, 26% reported that they strongly agreed that they were ready. “The Performance Management and Appraisal Resource Center indicates that as many as 80% of respondents rate their own performance as above average.” We must be mindful of not believing our own press releases. If you don’t know what you don’t know, it’s relatively easy to create personal blind spots that will impede your own growth and development, perhaps simply because you are unaware of a skill, behavior, or mindset gap. Moreover, if you’ve created a culture and established human capital policies and practices that insulate you from a changing world, you’ll have less motivation to develop new skills and insights.

The good news is these blind spots can be fixed. As a leader in this new world you don’t need to have all the answers. You can ask for help. You can surround yourself with people who are collaborative and will want to contribute their ideas to build a great company. You can try using new digital tools, knowing plenty of people can help you with them. You can learn from others who might have a different skills profile from yours and know that they have a lot to learn from you. Try to blog. Better still, as Schrage suggested, comment on this blog!