Only 12% of executives have faith in their business leaders to take them forward, and a sobering 9% agree that their organisation has the skills to thrive in the digital economy, says a new study.
The study, based on a survey of 4,394 executives from over 120 countries, was conducted by Teaneck, New Jersey-based information technology giant Cognizant and MIT Sloan Management Review, a magazine published at the Massachusetts Institute of Technology.
“A generation of leaders in large companies are out of sync, out of tune, and out of touch with their workforces, markets, and competitive landscapes. What got them to their current exalted status won't be effective much longer — unless they take swift action,” Benjamin Pring, report co-author and director, Center for the Future of Work, Cognizant said.
Only 13% of executives agree that their organisations are prepared to compete in increasingly digitally-driven markets and economies, while 82% agree the new economy will need digitally savvy leaders.
Around 71% of respondents think that they are personally prepared to lead in the digital economy, the study revealed.
Executives at these companies aren’t too optimistic about their organisation’s preparedness, with only 40% saying their organisations are taking the necessary steps to build robust digital leader pipelines.
Several organisations have cultural inertia, meaning leaders with outdated ideas are still the main decision-makers and shape the company’s vision. An inability to deal with technology blind spots and a lack of digital savviness at the leadership level is eroding employees’ talents, according to the report, the New Leadership Playbook for the Digital Age: Reimagining what it takes to lead.
The report comes at a time when pessimism among CEOs over global growth is at a record high. A recent report from PricewaterhouseCoopers says that the percentage of leaders predicting a slowdown in the global economy is highest since 2012, with 53% predicting a decline in the rate of economic growth in 2020. This compared to 29% in 2019 and just 5% in 2018.
A shortage of key skills remains a top threat for business growth, the PwC report found. Leaders agree that retraining and upskilling will help close the technology gap, however, few companies have been able to achieve this goal.
Organisations across the world are investing in training the next generation in emerging technology. San Francisco-based cloud customer relationship management firm Salesforce, for example, has signed multiple agreements to train 2.5 lakh students in India by 2022. So has Bengaluru-based IT giant Wipro.
The Union Minister for Electronics and Information Technology Ravi Shankar Prasad has also approved Rs 436 crore for the expansion of Future Skills initiative. This expanded digital platform, called Future Skills PRIME (programme for reskilling/ upskilling of IT manpower for employability), is expected to train more than four lakh professionals over the next three years.
The investment in hiring and training talent will not pay off if the leadership has an outdated mindset, the new Cognizant-MIT Sloan Management Review report shows.
“Allowing unprepared senior executives with outdated skills and attitudes to stick around forces next-generation, high-potential leaders to move on to new pastures, which harms morale and ultimately shifts the organisation further away from where market demand is heading,” Pring added.