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Leadership & Organisations

11 Leadership Guidelines for the Digital Age

11 Leadership Guidelines for the Digital Age

The old ways of running a company won’t cut it in a digital world.

Ten years ago, when we would ask senior executives or company directors what “digital” meant to them, their response would usually be something related to social media. Today, it might be apps, Big Data, 3D printing, “the cloud” or another current example of digital technology. All such answers are equally correct – and equally in error. More important than the specific innovations introduced by the digital revolution is their earth-shaking cumulative impact on business and on organisations. There is no border anymore between the pre- and post-digital worlds. Digital is business and business is digital.

Yet, top corporate leaders are not taking charge of digitalising their organisations, as was made clear to us by a survey we conducted in 2016 – to which 1,160 managers, executives and board directors responded – that developed into a report available for free online. We discovered that most board members lack the knowledge and awareness necessary to lead a digital transformation.

To help top management catch up, we recently issued a follow-up report – “Directing Digitalisation: Guidelines for Boards and Executives”. It presents 11 strategic implications and recommendations (grouped into three categories), summarised below. These are based on the previous findings, our combined business and teaching experiences, and professional collaborations with organisations across multiple regions and industries.

The business environment

1. Digitalisation requires an unbiased understanding of the external environment.

Analogue-era frameworks such as Michael Porter’s “five forces” will need to be revisited, now that the impact of digitalisation is rapidly replacing traditional physical barriers to entry with intangible barriers (e.g. relevant purpose, resonant mission, authenticity and trust) that no amount of industry prominence or cash can overcome.

The organisation

2. Digitalisation may require a reformulation of the firm’s mission.

The environmental shift caused by digital may challenge the very existence of individual companies, even entire industries. Boards and executives will need to question all pre-existing assumptions about the firm’s mission and industrial positioning, as well as the sustainability of its business models and methods.

3. The meaning and impact of digital to the firm must be clearly stated.

Digital advantage resides largely in the opportunity to customise not only products and services but also organisational strategy and structure. Rather than searching for a blueprint to guide them through digitalisation, firms should define their own digital road map. Leaders can start by developing an in-house dictionary, including entries for “digital” and all related keywords, terms and concepts. Like any other dictionary, it will need frequent updates.

4. Digital understanding and capabilities are required across the firm.

Digitalisation may involve a great many experts, but the ultimate responsibility for digital transformation belongs to all functions within a firm. Successful change also requires cooperation from junior contributors all the way up to the board by linking digital savvy millennials with the business experience and wisdom of senior executives and directors.

5. Digitalisation must be supported by the firm’s corporate culture.

The digital revolution is indeed cultural, not merely technological. As with any large-scale cultural change, digitalisation will never take hold unless it is driven by top executives, under the board’s leadership.

6. Digitalisation demands a greater level of collaboration.

Business success can be achieved only through continuous collaboration and ongoing conversations between shareholders, boards, executives and “frontline” employees. In addition, digitalisation is blurring the lines between different industries, heightening the importance of cross-functional and external collaboration.

7. Digitalisation requires greater engagement with the public.

In the past, customers were subdominant. We spoke at them; we marketed to them. With digital, anyone can create and monetise value with size, scope and speed. Just as easily, consumers can destroy value by, for example, dismantling a massive company one tweet at a time. It has never been easier or more essential to co-create with customers and crowdsource ideas, and firms that position themselves as facilitators of customers’ dreams will win in the future.


8. Business strategy in the digital age becomes a continuous process.

Gone are the days when companies had the luxury to think in terms of five-year strategic plans. With major business trends shifting constantly as they are today, strategy formulation and execution need to happen simultaneously and ideally in a seamless feedback loop.

9. Decision-making in the digital age is increasingly data-driven.

Compared with the plethora of advanced predictive and analytics tools available to businesses today, the old-fashioned executive summary laying out binary choices is a primitive instrument. In the absence of Big Data, what used to be allowable as an “educated guess” will become at best a stab in the dark.

10. Digitisation requires firms to enter uncharted territories.

Planning for disruption entails exploring new business models and revenue streams. Organisations will have to launch ambitious experiments and quickly take learning on board. For their part, boards and executives must raise their comfort level as regards uncertainty, ambiguity and risk.

11. Digitalisation is about continuous management of change.

In the pre-digital world, a one-off change management programme could pay dividends for years if not decades. Not anymore. Directors and executives must ensure that the will and ability to continuously change are built into the very fabric of the organisation.

Responding to revolution

The digital revolution, like every revolution, can be viewed either as a catastrophe or as a world of opportunity – depending on whether your allegiances lie with the old order or the new. Optimism is a prerequisite for survival. Digital will undoubtedly force boards and executives to attain unprecedented levels of innovation, competence, effectiveness, leadership and responsibility – with fundamentally positive results for both firms and society.

It is unlikely that familiar forms of organisational leadership will survive the digital revolution. In order for boards and executives to fulfil their roles effectively in the future, a reshaping, if not a disruption, of these functions is necessary.

The report was launched in connection with INSEAD Directors’ Forum and 10th Award Ceremony of the Certificate in Corporate Governance on 27 February 2017 at INSEAD’s Asia campus.

More reports can be found on the website of the Corporate Governance Initiative

Liri Andersson is the founder of this fluid world; a boutique business and marketing consultancy that enables Fortune 500 organisations understand, navigate and commercially exploit the changing business and marketing environment.

Ludo Van der Heyden is the Chaired Professor of Corporate Governance and a Professor of Technology and Operations Management at INSEAD. He is is the founder of the INSEAD Corporate Governance Initiative, co-director of the International Directors Programme and Value Creation for Owners and Directors and lectures on governance, leadership, and business model innovation.

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About the author(s)

About the series

Corporate Governance
The INSEAD Corporate Governance Centre harnesses faculty expertise across multiple disciplines to teach and research on the challenges of boards of directors in an international context with the goal of developing high-performing boards.
View Comments

Anonymous User

05/01/2018, 06.50 pm

What if, we include profit earn due to digitalization in P&L statement. It will be good way to measure where the company intend to go in proportion with the base product the organization selling.


Anonymous User

12/01/2018, 09.13 pm

Thank you, PM, for taking the time to make a comment on our report.

I absolutely see where you are coming from. If we measure something then we can prove its value, if we can prove its value then we can get senior management on board, and that means investment in time, capabilities, competencies, exploration etc. (all needed).

The challenge with assigning profitability to digitalisation assumes that it is a thing we do to generate profit. In some cases, this can be true and could absolutely be assigned a line item. However, in most cases, and as we state in the report, ‘business is digital and digital is business’. Like electricity it can't be separated from all aspects of conducting business, hence treating it as a separate item runs the risk of the business not being digitalised, i.e. how a firm innovates, operates, manufactures, sells, market etc.

The solution probably lies in a combination of both, if a product or service is digitalised then the revenue can be accounted for. However, a transformation is still required to digitalise the firm and the business model to be relevant in the 21st century.

Thank you so much for taking the time and for commenting.



Anonymous User

22/03/2017, 12.02 am

I really appreciated reading this report - congratulations!

As a Sales & Marketing transformation consultant, I'm not too surprised (page 14 of full report) that this is the #1 area for digital initiatives. However I am very puzzled that Customer Engagement ranks #8 out of 9. Not only because sales or marketing efforts are somewhat irrelevant without customer engagement initiatives, but also because it is one of the areas where there is little debate about the RoI.

The second element that I would expect to see, and it is a hot topic when discussing with clients, is the challenge that digitalisation poses on the workforce - not all of which are generation Y or Z - and the way the men and women operate in a constantly transforming organisation.

The one thing that is clear is that digitalisation is systemic and requires a clear alignment across the board and the management team. Which then raises the 3rd question : how many board members are challenging the management team and asking them "are you ready for the digital disruption ?".

Thanks again for sharing the insight,
Patrick Giry-Deloison (MBA91D)


Anonymous User

24/03/2017, 05.11 pm

Hi Patrick,

Thank you so much for your kind words about our work, we truly appreciate it. I think your comment is with regards to the report we wrote in 2016,
The Real Impact of Digital – As Seen From the “Virtual Coalface” also mentioned in this article which refers to the new report “Directing Digitalisation: Guidelines for Boards and Executives”. So I will direct my comment based on this assumption.

Your first question is in relation to consumer engagement. This report is based on quantitative research, hence the data we have does not directly answer your question. However if you permit I will share my opinion based on my experience working with leaders across functions. Sales & marketing is seen differently by different people, so it is possible that some of the respondents sees consumer engagement as part of sales & marketing, others see sales & marketing in the traditional sense and are looking to get the basics in digital right such as advertising on-line, communications on digital channels, distribution channels such as e-commerce etc, and this is therefore placed higher up their agenda, However, looking at page 18 of the report is seems like the key reasons for engaging in digital initiatives is to Improve Engagement with consumers (Table 10). So although they mention sales and marketing as the main category for digital initiatives, the main reason for digital initiatives is in fact consumer engagement - which is in line with your expectations.

The second topic you raise is the challenge that digitalisation poses on the workforce. I could not agree more, this is the most difficult and challenging shift we will see with regards to digitalisation. Which is also why I think a lot of organisations shy away from it. As a mater of fact one of the key findings of the report is how important people, management and culture is for the success of digitalisation. Most of requirements listed for the success of digital initiatives in table 14 fall under this category. Yet if you look at table 15 and 22 it is clear that people, management and culture is not getting close to the attention it needs for success!

As for your excellent question, “how many board members are challenging the management team and asking them, are you ready for the digital disruption?” we clearly see in the first report that there is limited awareness of digital transformation initiatives at board level, with only 1% of board members stating that digital transformation is their organisation’s main digital undertaking (page 15). The gap between boards’ understanding and engagement in digitalisation is the reason why we wrote the recent report “Directing Digitalisation: Guidelines for Boards and Executives” (on which this knowledge article “11 Leadership Guidelines for the Digital Age” is based on) in the hope of raising the crucial topic of digitalisation at the very top of the organisations will assist in firms giving digitalisation the full attention it deserves, not only to thrive but to survive in the digital economy.

Thank you so much for taking the time to write this comment, it is truly fascinating to have the privilege of interacting with people like yourself.

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