Southeast Asian businesses are beating the global average when it comes to digital leadership, according to a new study by SAP SE and Oxford Economics.
Almost a quarter of Southeast Asian businesses are classed as digital leaders – meaning that they have executives who communicate a company-wide digital strategy, keep management and worker skills up to date, and streamline organisational structure – compared to only 16 per cent of companies globally.
Another key factor in becoming a digital leader is making data-driven decisions, and more executives in Southeast Asian companies are doing so than the global average, at 61 per cent versus 55 per cent.
Digital leadership is more than just a buzzword – the study showed that those Southeast Asian companies identified as leaders also reported strong revenue and profit growth compared with all other businesses in the region (76 per cent compared with 60 per cent), higher levels of employee satisfaction (87 per cent compared with 51 per cent), better retention of employees, and are more likely to have advanced talent strategies in place. For example, 56 per cent of digital leaders are likely to mainly fill roles from within the company, compared with just 33 per cent for the rest of the region.
Millennials take their place at the boardroom table
The study has also shown that millennials are taking on corporate leadership positions faster than the global average, comprising 22 per cent of executives from Southeast Asia compared with 17 per cent worldwide. However, only 45 per cent of Southeast Asian executives say leadership leadership works with employees to develop their careers.
Scott Russell, president and managing director, SAP Southeast Asia, said according to the PwC report, ‘Millennials at Work: Reshaping the Workplace’, millennials will form 50 per cent of the global workforce by 2020.
“Listening to what young executives have to say may be a shortcut to digital leadership – as long as the experience of their older peers is not ignored in the process. Striking this balance requires generations to listen to each other. Generational diversity is as important as the other forms of workplace diversity. The Baby Boomers, Gen-Xers and Millennials all bring varying perspectives to the table, which is crucial in sustaining a dynamic organisation,” he said.
“The pace of change in today’s digital economy shows no sign of slowing down, and organisations that do not continually update their approach to digital leadership risk falling behind. Technology continues to remain the key enabler to drive growth, promote innovation, enable transformation and level the playing field for companies of all sizes.”
The study identified several areas where companies can improve their leadership skills and business performance, including by:
- Communicating a company-wide digital vision
- Continuously updating executive and employee skill sets
- Flattening the organisation to reduce bureaucratic bottlenecks
- Emphasising diversity, and
- Listening to young executives as the voice of the workforce of the future.
Digital breeds diversity
The ‘Leaders 2020’ study also showed a correlation between companies leading in digital transformation and those which have a heightened understanding of the importance of diversity. Though digital leaders around the world and in Southeast Asia are likely to recognise the positive impact of diversity on culture (66 per cent and 62 per cent respectively), only digital leaders are more likely to see the benefits in financial performance (37 per cent versus 25 per cent).
Companies have also become more diverse in Southeast Asia than in other regions over the past three years, with three-quarters of Southeast Asian respondents seeing diversity improvements during this time (compared with 67 per cent globally), and 42 per cent saw an increase in board and senior leadership (compared with 34 per cent globally). However, there is still more to be done, with less than 40 per cent stating that their company has effective diversity programs in place.
“A diverse workforce encourages bold, innovative ideas to flourish and in turn, presents insights which are only made possible through that diversity. It is of little coincidence that these two capabilities – leveraging data for decisions and maintaining a diverse workforce – both occur for high-performing organisations,” said Russell.
The findings of the Leaders 2020 study for Southeast Asia were revealed at SuccessConnect 2016 in Singapore.
