How to identify and build leaders in the digital organisation

Building Bench Strength
How to identify and build leaders in the digital organisation

We know that the role of peak performance leadership cannot be disputed as one of the predominant predictors for an organisation’s success. However, DDI World’s Global Leadership Forecast 2018 shows that 86% of organisations lack leadership “bench strength” (having leaders who can readily replace those who move on or retire). The data also point to the digital economy and the constant threat of disruption as having a profound impact on leadership at all levels.

In a global, turbulent, ambiguous, fast-paced and unpredictable new era, leaders of today need to be able to understand the impact of digital technology on their business and to predict the impact of technology in the future. And, more than ever, leaders need to be able to identify and develop other transformative leaders. This article describes how leaders of today can recognise and cultivate the potential leaders of tomorrow.

1. Develop leadership potential early on

Cultivating leadership should not be an afterthought. Organisations need to take a broader view of what it means to have leadership potential, and start developing this potential earlier in their employees’ careers.

Organisations that extend the development of high-potential talent below senior levels are 4.2 times more likely to financially outperform those organisations that don’t.

2. Prioritise potential, not performance

When identifying new leadership, successful organisations focus on potential, not only on performance.

Questions to help assess an employee’s potential include:

  • Do they have the desire and aptitude to grow?
  • Are they be driven to develop others and build strong teams?
  • Can they cast a vision and communicate it effectively?
  • Will they influence all levels of the organisation?

3. Adopt a growth mindset

Research indicates that managers see more potential leadership in employees when organisations adopt a growth mindset – the belief that talent should be developed in all employees and should not be viewed as an innate gift that some have and others don’t. Microsoft is deliberately creating a growth-mindset culture and rethinking its approach to development. As a result, skilled (but previously unidentified) leaders are rising to leadership levels they may not have in a more traditional development model. 

4. Review talent regularly

In a rapidly changing global economy, annual performance reviews are insufficient. Reviewing and evaluating talent should be an ongoing process, used as an opportunity to align the company’s performance goals with those of high-potential employees.

5. Engage and collaborate

Encouraging employees to publicly share their knowledge gives them the opportunity to consider how best they can contribute to the team’s success. In terms of leadership identification, high-potential leaders will display interest in the company’s goals, plans and strategy. They will proactively contribute ideas to grow the business, streamline a process, or improve the workplace.

6. Be intentional about mentoring

Organisations that have a formal mentoring culture experience:

  • 20% lower employee turnover
  • 46% higher leader quality
  • The ability to fill 23% more roles immediately

Despite the benefits of mentorship, only about a third of organisations offer formal mentoring.

7. Foster a common goal

In the disruptive business environment of the digital age, people need a sense of purpose to drive their focus and work. The Global Leadership Forecast 2018 found that organisations that operated without a purpose-driven culture or purpose statement financially underperformed the average by 42%. Conversely, twice as many leaders in organisations with a purpose statement say they get meaning from work. Their energy levels are also 60% higher.

8. Experiment, fail, learn

Innovation requires the courage to experiment, take risks, fail and learn. This is a key requirement of leader, as is creating a ‘psychologically safe’ culture in which their teams can do the same.

9. Organisational cultural shifts

Future-fit organisations need to focus on four cultural factors to improve their leaders’ ability to respond to the age of digital disruption:

  • Adoption of a growth mindset
  • Decisions should be informed through data and analytics
  • The integration of multiple and diverse perspectives to drive the necessary change
  • In the pursuit of innovation, failure must be embraced

Outsource leadership expertise

Too many organisations adopt a “do it yourself” approach to leadership development. But in a digital economy, identifying and developing leaders should be enabled by data and experience, fostering an intentional transition to peak performance behaviours.

Factor10 adopts a client-led and systemic approach in all engagements, allowing for increased leadership impact and organisational value creation. Data-led insights form the foundation for all leadership consulting, attained through best-in-class psychological and behavioural methodologies.

Looking for a partner in leadership development? Get in touch with a Factor10 consultant.


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