Leading in the Digital Age

Digital transformation needs digital leaders who display humility and have an open mindset enables them to embrace the world as it is.

In 2016, I was asked by my dean to serve as the senior associate dean and chief strategy officer for the Darden School of Business. One of my primary tasks was to lead Dardens digital transformation. The need was obvious. Higher education was facing its own digital disruption headwinds. The rise of massive open online courses (MOOCs) was raising alarms. Traditional, residential-based colleges were under attack for being too expensive and too out of touch with the needs of learners. Even among traditional institutions, the battle for top talent increasingly was migrating to a digital battleground where data and analytics were being used to identify, recruit, and enroll desired students. More generally, digital transformation was being touted as a way to improve operational efficiency, lower costs, and deliver value-added services to students, faculty, and staff.

The Data Challenge

While I had worked with dozens of companies on their digital transformations, this was new territory for me. I came in with big ambitions. We were going to set up a virtual strategy war room” where we could monitor a whole host of data on our operations and outcomes in real time and compare them with our peers. We were prepared to adopt the leading approaches in machine learning and artificial intelligence to analyze the vast datasets available to us. I envisioned the analyses we could run, forecasting which types of prospective students would thrive at Darden and lead careers of impact and purpose. I was particularly excited about our ability to discover diamonds in the rough,” under-placed talent, who, given the right opportunity and environment, could flourish.

And then reality set in. Even the most basic tasks proved challenging. Our data resided in numerous pockets, often in spreadsheets on the personal computers of staff leaders. Data was often a source of power in the organization, and those who possessed it were reluctant to share it with others. Where formal database systems existed, they were often islands, unable to speak to and connect to other relevant data sets. Even when successful in creating valuable digital tools—everything from simple dashboards to sophisticated prediction algorithms—we faced the challenge of getting decision-makers to use the digital tools we created.

I take great solace in the fact that my experiences have not been unique—not in higher education nor in the broader world of organizations. Almost every company and manager I have consulted with has shared similar stories of struggle with the most mundane of digital transformation tasks. Even simple data wrangling and sharing can require a heroic effort. Data often exists in multiple systems spread throughout the organization. In companies that have gone through several mergers and acquisitions, there may be any number of legacy systems that do not easily connect with other sources of data. Data can become a source of power for those who possess it, and they may be reluctant to share that power.

How to Navigate the Digital Age

So how does one best navigate this fraught digital age? Successful digital transformation requires the recruitment and empowerment of digital champions in your organization. The need for such digital champions is not limited to your IT group. They should exist throughout your organization. They need not be data scientists per se, but individuals with an innate understanding of the opportunities data and analytics create. They should reside in various functional areas of the organization, such as marketing, HR, finance, and operations. Each of these functional areas needs its own digital champions to recognize and execute opportunities for digital transformation.  These digital champions should help build applications that advance decision-making and ultimately create value.

For example, Human Resources professionals are finding new and creative ways to leverage vast internal datasets to improve employee productivity and well-being. They are leveraging data to improve workflows and assess individual performance. Amazon, for example, has sophisticated systems for tracking processes and driving efficiency in its warehouses. Uber leverages data across its user base to find efficient routes for drivers and to assess drive time. Knowledge management systems allow employees to have access to the vast expertise of the organization. Increasingly, these systems are leveraging AI to make automated recommendations to point employees toward useful knowledge.

One of the common challenges companies face when pursuing a digital transformation is that all these efforts to wrangle data and create predictions are promptly ignored by organizational decision-makers. A fancy data visual or robust prediction is useless if it does not impact actual decisions. Potentially even worse are decision-makers who blindly trust a prediction without questioning the data or basic assumptions behind it. Managing the human element—how we react to and use the predictions generated in a digital application —is a critical role for all digital champions.

Leading a Digital Transformation

Leading a digital transformation is about how you create the conditions and culture that everyone in the organization understands and is supportive of what you are trying to achieve. It is about creating an agile organization focused on learning that is willing and able to pivot as roadblocks are encountered and opportunities arise. Digital transformation is less a destination than a journey.

Digital transformation needs digital leaders who display humility (see Hess and Ludwig, Humility Is the New Smart”). By humility, we do not mean meekness or lacking confidence, as all too often is assumed in popular culture. Rather, we are talking about a mindset that is open and self-accurate, and enables one to embrace the world as it is. The digital age moves fast. Understanding that you do not have all the answers or know all the facts is critical. Overconfidence can prove fatal. You may be smart, but there are always others who know more in various domains.

Digital leaders are not just born; they can be made. Like world-class athletes, humble leaders practice their craft, working to deepen and improve their behaviors. They encourage others to embrace humility and develop their own behaviors. They focus on building connections and high-value partnerships both within and beyond the organization.  The humble leader knows that human development capabilities are more likely to be a source of competitive advantage than technological expertise. In the same way machine predictions and human judgment are complements, organizations will have to embrace critical thinking, creativity, and innovation as complements to the powerful computational machines we are building.

Michael Lenox
Michael Lenox is a business consultant and professor at the University of Virginia's Darden School of Business. He has authored numerous books and articles on innovation and sustainability. In his newest book, “Strategy in the Digital Age: Mastering Digital Transformation” (Stanford Business Books, June 27, 2023), Lenox offers a comprehensive roadmap for managers and business leaders to navigate the complex landscape of digital technologies. Covering topics such as artificial intelligence, blockchain, cryptocurrency, and more, Lenox provides practical frameworks for creating innovative services and products.