The Evolution of Digital Leadership

 If everything seems under control, you’re just not going fast enough.

—Mario Andretti, Formula One, IndyCar, and NASCAR driver

The leadership journey from hands-on technologist to digital leader is an ongoing process. If you’re starting that journey now, ask yourself: What the world will look like in 10 years time? There’s little value in preparing ourselves for today’s challenges if, when we get there, the world has shifted substantially. Maybe you’re already a digital leader. If you are, you know how long it takes to build and grow organizational capability and leadership skills. If you don’t prepare, plan, and start your personal growth now, you will likely drown in the waves of change, leaving others to shape your future!

Shift of the CTO Role Over the Last 10 Years

Predicting the future is complex and challenging. There are many variables, factors, trends, and events that can dramatically influence how the digital leadership landscape will evolve. One way to predict the change is to look back over time and identify the key shifts and then continue their trajectories into the future. Let’s look at the market drivers that instigated the current landscape, how organizations have responded, and how CTOs contributed.

THE STRATEGIC SHIFT: DIGITAL ENABLEMENT

The last 10 years was the era of ubiquitous mobile and Internet access and the disruption they caused. The iPhone was released in 2007. Soon after that, broadband became fast and cheap, and then 4G came along with its always-on connectivity.

Commercially we saw startup innovators (such as Netflix, Spotify, Tesla, and Amazon) disrupting large incumbents. The huge market shift from physical to digital (DVD, music, and software) was driven by customer desire for faster, easier access. We also had the global financial crisis of 2008/2009, with billions of dollars and thousands of jobs and homes lost. This amplified the demand for cheaper prices.

Large enterprises responded by focusing on customer centricity and efficiency, looking to digital channels and digital enablement as they tried to grow market share, stave off competition, and remain relevant. This response generated a new set of corporate buzzwords, including “omnichannel,” “digital-first,” “self-service,” and “big data,” as leaders sought to demonstrate their (somewhat frail) grasp of technology, customer, and market demands.

In software development specifically, the shift was from multiple technologies to multiple paradigms and technologies. The likes of Lean startup, design thinking, and service design established themselves within the realms of everyday process culture, alongside their older cousin, Agile. Cloud-based computing, application programming interfaces (APIs), software as a service (SaaS), and platform as a service (PaaS) became common parlance as they enabled agility and efficiency gains never seen before.

The net result was the escalation of digital leadership roles. CIOs and CTOs became more important. New roles, such as the Chief Digital Officer, emerged as organizations acknowledged the need to reinvent themselves. Great CTOs became more business focused, understanding the nuances of the business model, strategy, and market forces. They widened their view of the organization, to view it as a system, and incorporated a longer term, strategic mindset while simultaneously focusing on short-term delivery and enablement. They leveraged best-fit technologies (mobile, cloud, microservices, big data, and more recently serverless, wearables, artificial intelligence, and Internet of Things—IoT), while Continuous Delivery practices guided the organization’s transition (often from legacy systems) to digital- and mobile-first offerings. If your organization isn’t here yet, well, now you know where to start!

IT moved from being an expensive, organizational cost center to a strategic enabler, gaining an important seat at the C-Suite table. This decade has been the era of digital enablement.

THE CULTURE SHIFT: TALENT AND PROCESS

The focus on digital enablement saw organizations searching for the right delivery and innovation processes and the best talent to deliver these new products and services. The Agile movement provided the much needed focus on cross-functional, empowered teams that delivered customer value in small, fast increments. For the first time, culture became a focus of attention as leaders and practitioners realized its critical role in employee motivation and organizational performance.

The emergence of customer demand for great user experiences and the rise of mobile meant technologists with these skills were in high demand. This demand continued to grow in parallel with the proliferation of the startup movement. The startup culture offered lucrative stock and payout deals, funky office spaces, remote working, casual dress, and a host of other perks, including Mac laptops, free coffee and food, and ping pong tables. Compared to most enterprises of the day, the startup world was a great place to work, and therefore began to attract great talent.

The global battle for talent was on. Demand for technologists was so high that their selection criteria elevated (in a Maslow-like way) from a minimum of interesting work and good pay, to a combination of the following:

• Great products and technologies
• Relaxed and fun culture
• Flexible working and funky office spaces
• Top remuneration and benefits packages
• Awesome working locations
• Meaningful work

Great CTOs understood this and the critical nature of culture. (Autonomy, mastery, and purpose were often respected as the three keys to leading smart, problem-solving product teams). They drove engagement through redefining working policies, building technical communities, hosting meet-up groups, and providing innovation time (such as hack-a-thons and Google’s 20% time). Great CTOs developed their leadership and people skills, focusing on growing people and increasing their influence of key stakeholders. Both of these skills leveraged a philosophy of solution co-creation, targeted toward achieving objectives.

Culture shifted from one of “delivery at all costs” to one of creating engaged and empowered high performance. This was the era of talent and process. Figure 5-1 shows these two shifts, plotted on the Digital Situational Leadership model. Here we see the CTO’s strategic shift to Digital Enablement (toward the right) and the Cultural shift to Talent and Process (upward).

Figure 1. The shift of the CTO’s role

The Future Role of the CTO (or Digital Leader)

In our review of the last 10 years, we looked at the market drivers that occurred, the responses from organizations, and the role of the CTO as part of that response. We saw how technology drove an era of digital enablement and the subsequent focus on talent and process. What changes and shifts will happen in the future to shape the role and selection process for digital leaders?

ACCELERATING PACE OF CHANGE AND SOPHISTICATION

The pace of change will continue to accelerate (see Figure 2). We are at a point where technology, society, and their integration will accelerate change faster than ever. Put simply: Today’s pace of change is the slowest we will ever see!

Figure 2. The accelerating pace of change

As you can see in Figure 2, we are near the middle of the curve, approaching an inflection point that will see the exponential acceleration of change. AI, robotics, VR, IoT, and the connected nature of these devices will radically change our lives, changing how we shop, work, govern countries, and even potentially change our consciousness! (Not convinced? Do a Google search for “Elon Musk and Neuralink”.)

Even without the likes of Elon Musk, human consciousness is evolving at an ever-increasing rate. Our capacity to comprehend and hold multiple perspectives is constantly developing, as is our overall awareness. Thanks to advances in neuroscience and a passionate personal development community, we have unprecedented volumes of information that are readily accessible to assist us in developing new levels of awareness.

At any cross-section of time, there will be people and organizations at different stages of adoption. E.M. Rogers’ (1971) Diffusion of Innovation theory outlines five categories of adoption, as shown in Figure 3. This model has been popularized more recently by Geoffrey Moore in Crossing the Chasm.1

Figure 3. Categories of the Diffusion of Innovation theory

We might expect then, that in 10 years’ time, the 16% of laggards may still be doing the same as the innovators and early adopters of today. I’ve witnessed this specifically with the Agile movement. Some organizations are still coming to terms with the very basics of Agile ways of working, which were codified in the manifesto back in 2001.

A reasonable place to focus our attention is on the combined categories of early adopters and early majority, the leading 50%. These organizations take their lead from the latest trends and innovators and rapidly respond to the changes they see and predict around them. The three most significant developments I predict are:

• The move to a digital society
• End of the office block (and cities)
• Commoditization of development

THE MOVE TO A DIGITAL SOCIETY

The pervasiveness of technology will continue. We will continue to track with Moore’s law, which states “The number of transistors in a dense integrated circuit doubles approximately every two years”. Quantum computing will be at the forefront of this increase in computing power. With this increased power comes smaller size and reduced cost of production, seeing the volume of embedded, wearable, connected devices exploding and technology becoming pervasive in every aspect of society.

Customer sophistication and demand for quality, price, and experience will increase, driving digital further into society and industry. The number of digital businesses (those businesses deriving more than 50% of their revenue from digital channels, products, or services) will dramatically exceed non-digital businesses. The digital natives (the likes of today’s Amazon, Apple, Facebook, and Google) will dominate digital and traditional markets, taking over verticals such as food and health.

We will thus see the focus and function of technology complete its transition from IT to digital to simply being the business. In this new digital society, more and more CTOs will become CEOs in implicit acknowledgement of the shift to digital.

END OF THE OFFICE BLOCK (AND CITIES)

Virtual reality and augmented reality will develop to levels of sophistication where the need to travel to an office for face to face interaction will no longer be required. Satellite, aerial, and fiber will provide ultra-fast Internet access anywhere on the globe, allowing remote working from a beach house, a forest, on vacation, or even in your subaquatic home. Organizational efficiency and productivity savings will drive widespread VR office adoption, removing the expense of commute times, large offices, workstations, and parking. Further adoption will be driven by the benefits to governments, society, and the environment from the reduction in transportation, which reduces pollution and the multi-billion dollar costs of the transportation infrastructure.

We will see the end of the office block, maybe not in the next 10 years, but it will come!

COMMODITIZATION OF DEVELOPMENT

Developments in AI and robotics will see the commoditization of multiple industries and jobs. Product development at the simpler end of the spectrum will be commoditized and built by intelligent bots. Ten years ago, a developer would handcraft HTML/CSS in a basic editor to produce a functional website. Today those sites are drag and drop and can be built by an 8-year-old. The future will involve conversing with a bot, which will have already assembled everything it knows about the customer, company, and domain (a lot like Watson does today, trawling the Internet and creating personality profiles based on your social media updates). The bot will instantly generate a website based on its findings and the conversational requirements specified. Bots’ and AIs’ initial takeover of the simpler development will increase over time as their intelligence exponentially improves. As a side effect of the takeover of big sections of industry, cyber-security will become a critical, in-demand skill. The automation of work through technology and the removal of human interaction, will put more and more everyday life into the hands of digital systems, and so their security will become paramount to a safe and reliable world. A recent Cisco report predicted that there will be demand for 6 million cyber security jobs by 2019, with a projected shortfall of 1.5 million candidates!

EXTREME COMPETITION FOR TALENT (ONE LAST TIME)

Until AI reaches a critical point, the move to a digital society will see an increase in the competition for talent, as existing markets are digitized and new ones are created. There will be an extreme global shortage of talent. Once AI reaches a certain capability level, the demand for human talent across the board will drop and never return, as bots take over the majority of the development work. We are in the very last battle for human talent! Figure 4 shows this curve in action. What’s hard to quantify is how long this process will take. My gut sense is the demand will increase for at least the next 5-10 years. We will have to monitor the progress of AI and track the increasingly more sophisticated jobs it can complete.

Figure 4. The demand for talent versus capability level of AI

Leaders who think this will be a slow and obvious process will be unpleasantly surprised! Technology has a habit of developing quickly and quietly, and then one day, seemingly out the blue, a company releases a game-changing new product, at which point, our only option is to react to the disruption. We must look for the indicators in the market (in this case, the sophistication of jobs that AI bots can complete), capture the opportunities, and ride the wave of change. Don’t get drowned by it!

Unnatural Leaders : The Evolution of Digital Leadership

Highly evolved digital leaders will be excellent in the three core competencies (see Figure 5).

Figure 5. The three components of digital leadership in the future

DEEPLY UNDERSTAND PEOPLE

Understanding what makes people tick, including how they prefer to communicate and what their core drivers are, is the single most valuable competency of an Unnatural Leader.

Knowing how people work and having a deep understanding of how they create their internal version of reality is critical. This is true not only for the people on our teams but, also when we’re trying to increase market share with customers, engage with stakeholders and external partners, and gain buy-in from senior executives.

By focusing on the care and growth of people and building a purposeful, contemporary culture, Unnatural Leaders attract the best talent, beating the odds of the global talent war!

Understanding how we (as leaders) work internally—our biases and preferences and being able to choose how we respond to a situation—gives us access to operating in the most effective way possible and rapidly increasing our success rates. Unnatural Leaders view the world as a constantly unfolding and evolving process, one that we actively shape by evolving ourselves. Even as successful, senior leaders, we continue evolving, paddling back out into the swell and looking for new waves to create and ride. Our less successful peers will get washed up onto the beach as they attempt to apply the same old thinking and approaches to new world problems.

DIGITAL ORGANIZATION

Unnatural Leaders create and grow organizations that are digitally savvy across the whole of the organization. A “digital first” strategy is something that is naturally assumed and not spelled out, and the constant internal utilization of technology to drive innovation and efficiency gains are simply part of the organization’s DNA.

Digital organizations don’t necessarily provide digital only products and services, but they maximize their use of digital across all functions, including marketing, sales, customer relations, finance, and operations.

Organizations that aren’t digital will find themselves out-paced, out-priced, and out-valued by those that are.

DRIVE AND INTEGRATE KEY TECHNOLOGY TRENDS

Riding technology trends is a part of what makes a digital leader great. That has always been the case. Unnatural Leaders do more than that—way more! They identify the key technology trends (such as AI and VR) and strategically incorporate them into the business strategy. They utilize their influencing skills and deep understanding of the business to secure stakeholder buy-in to develop products and services that capture new and existing market sectors.

In short, Unnatural Leaders create the trends for others to ride and integrate!

Unnatural Selection

Unnatural Leaders do Unnatural Selection. Rather than waiting for natural selection to eventually “prune” them from the digital leadership gene pool, they create the future and evolve faster than the pace of change. They learn to ride waves, read currents, develop their strength and fitness, and eventually become the lifeguards of the future as they take over the mentoring and guidance of future leaders who are following in their footsteps.

In the next chapter, I introduce the Unnatural Selection framework.

Summary

Our world and society are changing at an ever-increasing rate. What made a leader successful 10-15 years ago will no longer make a leader successful today and certainly not in another 10-15 years’ time.

Understanding people, including ourselves, is the most critical competency we can develop. It allows us to master ourselves, customers, stakeholders, and team. We leverage this increased effectiveness to create and ride the waves of change and avoid being washed up by them.

Self-Reflection Questions

1. How has your role changed over the last 10-15 years? Can you map your journey on the Digital Situational Leadership grid shown in Figure 1?
2. How do see the changes of the future impacting you personally in your market, industry, region, and country?
3. Which new technology trend or shift in social culture will impact your organization the most? Which will impact you personally the most?
4. How might you prepare yourself and your organization now for these shifts?
5. How deeply do you understand the following (1 being not at all, 5 being a very deep understanding)?
   • Yourself
   • Your teams
   • Your stakeholders
   • Your customers
6. How might your work satisfaction and success levels change if you deeply understood (with a 4 or 5 rating) all four areas listed in the previous question

Thanks for reading my blog.

Are you Leading?

Dr. Deepak A. Patil

CEO, Lead ThySelf