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Authored by:
Danielle Ivosevich, Senior Manager, Business Transformation
Jackie McPhedran, Manager, Business Transformation
Lumia Zhang, Staff Consultant, Business Transformation
Contributed by:
Gordon Sandford, Partner, Business Transformation
Kat Lee, Partner, People Advisory Services
Karen Hutchison, Executive Director, People Advisory Services
A new kind of leader is emerging to address the “connection” vacuum in a workplace that is starved for connection.
In brief
- Through a rebalancing of work in the past three years, a new workforce was created that’s looking for more purpose in their roles. As a result, a new kind of leader is emerging to address this vacuum in the workplace.
- Through ground-breaking research we learned six human factors that help drive transformation success in businesses.
The last three years have ignited a rebalancing of work and life, creating a workforce that’s looking for more purpose in their roles beyond “just a job.” A new kind of leader is emerging to address a team that is starved for connection — physical, mental and emotional — and looking to derive more from what they do.
At the same time, these new leaders are navigating unprecedented change that is forcing companies to transform more rapidly and more frequently. With 65% of leaders of the Forbes 2000 planning to spend 5% to 20% more on transformation in the next three years, a focus on connected leadership with humans@centre has never been more critical for success.⁴
EY research shows that both leaders and employees of transforming organizations undergo emotional journeys, which take very different turns depending on the success or failure of the transformation. Those leaders who take intentional steps in managing the human element of transformation are 2.6x more likely to succeed.¹
In this last part of our series, we take a deeper dive into the leadership capabilities required to successfully navigate the human digital age, where teams crave connections and change is constant.
Leadership in the human digital era: a new kind of leader
In the past, leaders have been identified and assessed largely based on their experience, tenure and business performance. They were expected to know what to do and bring judgment and experience to new business challenges. They “paid their dues,” climbed the corporate ladder and were developed and evaluated based on their behavior and style. While historically job postings focused on technical skills, more human-focused capabilities are now valued and noted as requirements for leadership.
As Michelle Johnston identified, “In the past, exercising direct power and giving commands may have defined leadership. That no longer works. The best leaders succeed by connecting with their teams, empathizing and honestly being themselves.”2
Leaders need to be adaptable. They need to react and coach teams to be able to work through challenges that do not have a set blueprint on how to move forward. As organizations react to the changing business environment, develop transformative capabilities and look to build resilience, a new kind of leader is needed.
Today, leaders need to think, act and react differently. The pace of change is forcing a new kind of leadership — one that emphasizes capabilities such as empathy, adaptability, resilience, collaboration, innovation and problem-solving. Leaders are expected to innovate to find new solutions. They’re assessed and developed based on their thinking patterns and problem-solving abilities — because the next challenge isn’t always clear, but likely just around the corner.
In the human digital age, empathy and agility are among the most highly desired leadership capabilities. While agility helps leaders react and change course as required, empathy underpins how they create connection and manage the emotional journey of any transformation.
In collaboration with Oxford Saïd Business School, EY teams conducted ground-breaking research into the human factors that drive transformation success and failure. This global, cross-sector research covered 23 countries, 934 C-suite executives and their direct reports, and almost 1,200 members of the workforce.
Based on this research, EY teams identified six key drivers that, when combined, help prepare for, manage and harness these emotional journeys, and are the formula for dramatically increased success rates for transformations. These traits are all anchored in the human experience.
- Inspire: create a vision for all
The only constant is change across many facets — client needs, technology, products, industry trends and more. Leaders need to focus on a collaborative and compelling “why” in which both leaders and employees can find their purpose. Transparent communication is necessary to enhance the shared belief throughout the transformation process.
- Care: foster a culture that embraces mistakes
Leadership style and organizational culture go hand in hand. To promote open and mutual dialogue, leaders need to proactively create psychological safety, using both the “speak up” and “call up” approaches. A culture of experimentation and a mindset of failing fast enables an organization to capture opportunities that a “can’t fail, don’t fail mindset” may miss.
- Build: use technology to bring vision to life
Visions set the tone and serve as the foundation for the transformation. As we highlighted in “How can humans unleash the power of digital technology?”, technology alone cannot be the vision. But getting the right technology is necessary to drive the vision. Along the way of onboarding new technologies, leaders should evaluate the emotional impact of technologies and take actions accordingly. For example, will automating a process change the role expectations and responsibilities?
- Empower: realign power and resources to be ready to change
In the past, exercising direct power and giving instructions from the top down was the typical way of initiating the change process. However, leading a successful transformation requires companies to break down bottlenecks and give autonomy to their teams and people. Leaders need to be adaptable, resilient and comfortable with ambiguity. They should promote continuous learning to keep pace with the big picture and be open to modify the vision as market conditions require.
- Lead: nurture courageous leaders who constantly deepen themselves
At the management level of a transforming organization, leaders should start by transforming themselves. Leaders who keep working on themselves can better help their people with emotional challenges. Courageous leaders also guide their employees without disrupting creativity, leading by example and giving everyone on the team the confidence to do their jobs to the best.
- Collaborate: find the best ways to connect and collaborate
To achieve a collaborative organizational structure, leaders need to choose the right operating model. The outdated vertical hierarchy of management needs to be replaced by a horizontal network of competence — a network composed of self-organizing teams that are able to drive themselves. Champions can be selected as role models to advocate for the horizontal working model.
Leadership in the human digital era: building the next generation of leaders
In a critical time when organizations need leaders to navigate disruption and change, 77% of organizations report they are experiencing a leadership gap and 63% of millennials note their leadership skills are not being fully developed and made use of.3
How do you grow new leaders and help more experienced team members adjust for the new competencies required?
Embrace the horizontal working mode
It starts with recognizing that every team member in an organization has potential to lead. Often, organizations direct their leadership programs, courses and coaching opportunities to executives, neglecting the powerful middle layer. Managers are on the front lines and represent the connection between decision-makers and team members. These managers are guiding teams, creating connections and implementing enterprise transformation at the same time as managing their employees’ emotional journeys. It’s critical for organizations to support horizontal working and create an environment where managers can share their experiences and bubble up feedback from their teams.
Unlock the potential of the middle layer
As noted in Karen Hutchinson’s article: “Managers are on the front lines of business transformation. Coach them accordingly.”, organizations should develop a strategy to unlock their middle layer. Leaders should be assessed early in their careers for agility, creativity and ability to lead and connect teams. Investing in this middle layer and providing them with opportunities to demonstrate their capabilities, as well as coaching, positions them well to lead change. The middle layer could also act as reverse coaches to deliver feedback to upper management when implementing transformational change.
Ask your people for their ideas
Too often, change is conceived at the very top of the executive house and implemented at the lowest level, without any substantial investment in the management tranche, which ultimately enables the initiative’s success.
We pour resources into revamping processes. We invest heavily in emerging technology and automation so the business can be quicker, leaner and better. None of that matters if you don’t also coach leaders and equip them with a robust toolkit of resources they can use to implement that change. Positioning transformation as a human-centred change forged with your leaders versus something that is imposed on a group can revitalize managers and move the organization forward.
70%
Of senior leaders in successful transformations agree that the capability to transform is extremely important for future success.⁴
Bringing it to life
It can be challenging to identify where to start. EY teams work with organizations to develop a roadmap to guide teams from learning to leading. Learning requires sharing the knowledge and research that support a successful transformation. Listening involves creating a safe space for team members to share their ideas, sentiments and thoughts on the emotional journeys they are experiencing and provides an opportunity to collaborate on the transformation. Leading provides programs for transformation leaders to learn how to inspire their teams throughout the transformation.
Final thoughts on the leadership series
As we’ve outlined in this four-part series, the only constant is change. Adaptability, empathy, innovation, agility and problem-solving are critical to transformation initiatives’ success. How organizations prepare their teams to react and pivot will be as critical to the outcome as the technical skills taught. In defining a fundamentally new and better way to drive sustained organizational performance, those that put humans at the centre will be better positioned to deliver outsized results.
- The Future of transformation is human (ey.com)
- Johnston, Dr. Michelle K., The Seismic Shift in Leadership: : How To Thrive In A New Era Of Connection, February 22, 2022
- Segal, Edward, “Latest Corporate Crisis: Only 11% Of Surveyed Companies Have A Strong Leadership Bench,” Forbes.com, May 19, 2021.
Leadership Transitions Report 2021, Development Dimensions International Inc., 2021. - https://www.ey.com/en_us/workforce/humans-at-the-center
Summary
The last three years have ignited a rebalancing of work and created a workforce that’s looking for more purpose in their roles. A new kind of leader is emerging to address the “connection” vacuum in a workplace. In part 4 of this series, we learned through research six human factors that help drive transformation success in businesses.