Social Media, Pandemic Require a Leadership Playbook Rewrite
New MIT report finds that digital business leaders must adapt to unprecedented levels of transparency, introspection
It’s a double-dose of disorder: A global pandemic wreaking havoc on business coupled with the ongoing disruption of digital transformation. How should leaders set a course for the future?
That’s what a global executive study set out to determine last summer. A team led by MIT Sloan Management Review (SMR) and Cognizant’s Center for the Future of Work, surveyed 4,296 global leaders and conducted 17 executive interviews to explore shifting attitudes about leadership during challenging times. The survey was fielded in June and July of 2020, and captures insights from more than 20 industries
The research found an interesting twist on traditional leadership approaches. “Successful digital transformation demands that leaders measurably transform themselves,” according to the new report released today titled, “Leadership’s Digital Transformation: Leading Purposefully in an Era of Context Collapse.”
In interviews, executives including Starbucks’ CEO, Kevin Johnson; Anheuser-Busch InBev CEO, Carlos Brito; Delta Air Lines’ CEO, Ed Bastian, and former Best Buy chairman and CEO Hubert Joly, note that leadership requirements today go well beyond metrics like productivity and efficiency; leaders also have to be introspective. As Joly observes, “All of us have to rewire ourselves for a new way of leading.”
And much of the change is attributed to digital technologies and what the report calls, “context collapse,” the near impossibility in a social media era, “of managing different identities with colleagues, family, and friends.” In other words, like it or not, transparency and openness are the order of the day. Social media is catching up with executives in unfamiliar ways.
Michael Schrage, a research fellow at the MIT Sloan School of Management’s Initiative on the Digital Economy (IDE), worked with Benjamin Pring and Desmond Dickerson from Cognizant’s Center for the Future of Work, as well as David Kiron, editorial director of MIT SMR, on the report. MIT IDE Editorial Director and Content Manager, Paula Klein, caught up with Schrage to unpack the findings and implications of the report.
IDE: This study uses the lens of digital transformation to examine the future of leadership. What drew you to the topic, and what is the most important takeaway?
Schrage: What hooked me into this effort was the global reality of digital transformation. Every enterprise in the world today has to deal with an Amazon, Alibaba, Google, Tencent, TikTok, or Facebook as a competitor, partner, and/or business model inspiration. The pandemic further guaranteed that people and their processes would have to be even more digital than planned.
No one escapes radical digital transformation — not even the boss. That angle intrigued me.
This study’s origins were less about the future of leadership than learning how digital transformation disrupts perceptions and expectations about leaders — even by leaders themselves. We probed how legacy leaders can effectively exert influence when people’s time and choices are increasingly determined by digital data, media, and methods. We also considered what digitally savvy workers want and rightfully expect from their bosses. These questions struck our team as very powerful and provocative.
What we learned pushed us to tailor our findings to leaders who recognize that their organizations can’t successfully change unless they personally change. Frankly, we didn’t expect that.
IDE: What was another big takeaway or surprise?
Schrage: We were surprised that most organizations have gotten digital transformation all wrong. Our survey data and interviews strongly suggest legacy leadership championed digital agility and productivity at the expense of enterprise values and purpose. They consistently prioritized the value of efficiency over the effectiveness of values. This created disconnects between what people hear their leaders say and what leadership actually does. Those disconnects anticipate — and precipitate — workforce resistance and defiance in growing numbers of firms. As a result, a digital transformation backlash is under way. We heard leaders such as Joly, Brito, Daniels, and Bastian describe how they’ve had to explicitly address workforce concerns and unhappiness.
The pandemic assured that leadership by digital example has assumed greater urgency, as well as priority. Digital presence — whether via Zoom, Slack, Teams, Twitter, or even TikTok– shapes how people experience leadership’s style and substance. Once-ancillary channels have now become central to business success. Digital disruption is happening and it fundamentally reshapes how leadership presents and projects itself to key constituencies.
IDE: How exactly is the rising role of digitization changing leadership? Explain more about context collapse.
Schrage: I was struck that every leader and expert believed digital media makes top management more visible, more transparent, more vulnerable, and also more accountable. Social media’s impact and influence makes it very hard to appear aloof or above it all — even if you’re the boss. You also need to be far more sensitive and self-aware about how your comments and communications can be interpreted and misinterpreted.
Our report discusses the rising importance of “context collapse” — the digitally driven phenomenon that leaders can’t really separate or segment their audiences anymore. Your tweets or e-mails or texts can go viral with a swipe. Quotable comments on analyst calls instantly get shared with employees; a digital ‘no comment’ to social activists becomes an invitation to boycott, and seemingly innocent photos posted on Facebook years ago by a spouse or child can resurface in ways that can cost jobs. Hiring clever social media consultants won’t save executives from context collapse; they need to better understand these new levers.
IDE: Talk about the pandemic in this new digital reality. Might leaders revert back to former ways once we’re turned a corner on the coronavirus?
Schrage: COVID-19 dramatically exacerbates these context-collapsed leadership challenges. When your direct reports are working from home, the dividing lines between work and home life are blurred or dissolved. Similarly, when you’re the leader of an organization in a context collapsed world, are people looking at what you say and do as an individual or as the leader of your institution?
We see leaders’ personal lives and views inextricably jumbled with their professional roles and obligations. That’s not going to change, and it’s not easy to address.
Frankly, people are still trying to adjust after a year the virus hit. There’s no best practice yet. Moreover, the COVID crisis and its associated civil unrest have made organizations as sensitive to stakeholder concerns as to shareholder accountability. Leaders must balance competing priorities between rival stakeholders instead of deferring or defaulting to shareholder imperatives. These are very real tensions and dilemmas that leaders now face every day.
IDE: What is the call to action? What can leaders do to prepare and protect themselves?
Schrage: We have a number of specific recommendations based on both our survey and interviews. Most importantly, leaders need to become much more self-aware and self-conscious about how they lead by example. As noted, context collapse has made them more visible and vulnerable. How does that play out when the overwhelming majority of project collaborations and customer interactions are digitally intermediated? We offer excellent insights from MIT Sloan Management Professor Ray Reagans describing the critical importance of visualizing, knowing, and understanding one’s own professional social network inside the enterprise and out.
Leaders also need greater self-awareness about how their efforts to credibly promote strategy, purpose, and culture. For example, only 25% of survey respondents strongly agree that their organizations are as purpose-driven as their leaders believe them to be. That’s part of the purpose gap we identify and explore. And it goes to the core of the business. We found that organizations lacking both strong purpose and a strong commitment to digital development risk have disappointed and ill-equipped leaders and workers.
That’s why we created a ‘net purpose score’ tool that is a lightweight, high-impact way for leaders to assess how corporate purpose is perceived and experienced by their employees. It can be a very useful, eye-opening tool as they navigate the future.
