What makes a digital leader?

11 December 2015 -

The digital revolution has not only changed the way we work, it has also changed the way we lead: the latest in a series leading up to the announcement of the 2016 Management Book of the Year

By 2016 CMI Management Book of the Year shortlisted authors Paul Miller and Elizabeth Marsh

In the 1980s, management theorists popularised a new term ‘Management By Walking Around’ (MBWA), describing what the likes of business guru Tom Peters considered to be one of the arts of leadership – strolling through the offices, warehouses and factories and chatting to staff.

Those were the days when the simple act of walking and meeting employees was enough to build culture, productivity and engagement.

Iconic CEOs of the time, such as John Akers of IBM, could in that era demonstrate their accessibility and connection to the day-to-day workings of their organisations purely by leaving the executive floors and touring the IBM locations worldwide.

The modern CEO and the leadership cadre of large organisations can only look back with nostalgia to such a time. Today, the C-suite has two large and unique challenges that have never before been faced by leaders (particularly CEOs). Not only is there a physical workplace to lead (as there always has been) but now there is a digital workplace that requires continual attention. The workforce is working within both physical and virtual environments therefore MBWA leadership now means ‘walking around’ in the digital as well as the physical world.

If that wasn’t bad enough, the second challenge all leaders face today is one that stems from the evolution of the digital world of work: Who are you leading now?

When Jack Welch became the youngest CEO ever to lead GE in 1981, at least he knew who he was in charge of. In 2014, Jeff Immelt, the current CEO, has multiple stakeholders, all of whom require his attention.

In a modern organisation such as GE, there are still the employees, but then there are also long-term contractors (who can outnumber staff); a fluid freelance community; and the supply chain – to name but a few. For a company such as Unilever, this wider audience includes 100,000 people in the supply chain; partners of all types who might manage outsourced logistics; customers, ranging from large entities to consumers; and the broader ‘marketplace’.

Viewed through this lens, the employees now look like the most straightforward group.

The reason why this proliferation of people requiring leadership has burgeoned so much is because the digital workplace is blurring the divide between what we mean by ‘inside’ and ‘outside’. Leaders must be present and active in the digital world of work and, in so doing, find that their remit has expanded exponentially. Suddenly, MBWA is not only much harder physically, given globalisation and workplace fragmentation, but has also to a large extent been superseded by the essential need for digital leadership. Most CEOs do not yet fully realise the extent of this requirement and the opportunity it offers.

What Does Digital Leadership Look Like?

While there is a distinction between tactical social media use and a sustained, strategic approach to ‘digital leadership’, it is alarming that, according to a 2013 study by CEO.com, less than a third of CEOs of the 500 highest revenue companies in the US have even one account on a social network such as Twitter, LinkedIn or Facebook – and 68% have no social media presence at all.

Just as alarming is that only 5% of CEOs have a Twitter account, despite almost 20% of US adults having one – so your staff, suppliers and customers are there, but you are absent.

The exceptions demonstrate what can be achieved. Richard Branson, CEO of Virgin, has (at the time of writing) just under 4 million followers on Twitter. The brand value to Virgin of Branson’s reputation and communication capacity is huge. Even Marissa Mayer at Yahoo!, who tends to divide opinion due to her ‘come back to the office’ mantra, has over half a million Twitter followers and maintains a Tumblr account.

The power of Twitter, LinkedIn or Facebook for such C-suite executives is that they can instantly connect with large numbers of people they lead across all sections of their universe.

Digital Leaders Feel Accessible

The truth is that, while the turmoil created by the digital workplace is extreme, it offers great opportunities for CEOs and other leaders to communicate, engage and connect with employees instantly and continually on a global basis. Take Andrew Liveris, Chairman and CEO at Dow Chemical. Liveris has regularly delivered an employee blog called ‘Access Andrew’ to the firm’s 54,000 global employees since 2007.

Posts are delivered weekly, and the blog receives between 15,000 and 25,000 visits per blog post and up to 50 comments, indicating that the blog is popular with employees. One of the most important elements of the blog is that it is authored by Liveris himself so is in his authentic voice. This helps create a sense of connection with a CEO that is unusual in a company of Dow’s size and type.

Employees are encouraged to leave comments, subsequently the blog has emerged as a channel for dialogue, with employees regularly asking questions and other leaders contributing answers in the thread. Another important approach is that the blog addresses multiple issues and does not shy away from difficult subjects. The blog has helped to revolutionise internal communications at Dow through a direct, open and honest channel that means employees can get to know their CEO a little better and vice versa.

The Celebrity CEO: Marc Benioff

Another more widely known example is Marc Benioff, CEO of Salesforce, who is as much a celebrity in his own right as he is a business leader (akin to Richard Branson). Many of Benioff’s communications are personally delivered and built on his own experiences, so that the history of Salesforce.com is also about him. Like Steve Jobs and Apple, the development and brand of the company is wrapped up with that of the CEO.

Benioff also gives the impression that he is accessible, often communicating via his Twitter channel and regularly interacting with other tweeters as well as posting photos. A similar approach is taken on his Google Plus page. He often posts messages stating that the best way to get hold of him is via his email address.

The personal touch also extends to his regular keynote at Dreamforce, Salesforce’s enormous annual conference for customers, which often involves him leaving the stage and walking through the audience. But perhaps the most significant factor is that Benioff is just a very good communicator and is passionate about what he does.

Building Trust Among the Digital Leaders

Trust ratings for the likes of Benioff, Branson and Liveris, based on the annual ‘Trust Barometer’ published by public relations firm Edelman, will be substantially higher than for the average digitally distant CEO. According to Edelman, only 20% of people surveyed trusted business leaders to tell the truth, just 7% higher than for the constantly derided government leaders; but regular, self-generated communication from CEOs can build trust and at least the appearance of accessibility.

The digital workplace ought to be a blessing. Why live out of a suitcase, continually travelling the globe, in order to meet a fraction of your workforce and a tiny number of key stakeholders, when as CEO you can spend a day a week working from home with your family, connecting with hundreds of thousands of people across all your audiences with greater power and impact, and generating trust through every key stroke?

In DWG, as the CEO, I appreciate the ability to communicate easily with the 70 or so people in our workforce over several continents, while the next minute engaging with 500 customers in 100 client organisations, before tweeting to several thousand via tweets and retweets. The potential scope and power of communication possible in as little as ten minutes is exhilarating – and it works for everything from the more personal or poignant digital conversations to bold and broad announcements.

According to predictions from the highly respected World Future Society, 2 billion existing jobs will disappear by 2030 due to such innovations as driverless cars, 3D printing and robotics, with the hope that these will be replaced by new jobs but, more likely, by new forms of work and income as the freelancing of the digital economy evolves.

Leadership in this entirely new paradigm, in which CEOs must navigate the transformed digital and physical worlds of work, must evolve.

If the likes of Benioff and Liveris are examples, it is not that the need for leadership is disappearing but that best practices for effective leadership require new digital communication skills. Far more personal openness and a mentality that absorbs each digital workplace innovation with gratitude are essential, rather than a philosophy based on fear and avoidance of the unfamiliar.

This revolution in how leadership is practised is being accelerated by the new organisational designs we are seeing in technology firms of all sizes.

In Amazon, for instance, hierarchy and leadership exist but the power structure is thin and transparent. This form of leadership is described in new management theory as ‘Servant Leadership’, where the aim of senior leaders is to support those within the organisation, who in turn focus on improving their own tiny part of the service. New structures require new leadership formats.

So, if you are a young manager rising up inside GE, Procter & Gamble or Amazon today, where should you look to learn about the methods of effective leadership in the digital age? You could look to a CEO with minimal presence on Twitter and other social channels … or you could, more usefully, turn to examples from the media and popular culture. You do not find Marc Benioff and Richard Branson taking lessons from the ‘leaders without followers’ seen at Davos, but instead from singers like Beyoncé who use social media to communicate with millions.

These leaders know that, given the economic transformation we are experiencing, entirely new communication styles and patterns for leadership are vital.

The Digital Renaissance of Work by Paul Miller and Elizabeth Marsh, published by Gower, is shortlisted in the Management Futures category of the 2016 CMI Management Book of the Year, in association with the British Library and sponsored by Henley Business School