Are 'digital leaders' the new breed of successful CHROs?

Dive Brief:

Digital leaders, a new, emerging leadership type that embraces the digital mind-set, may also be getting better business results, according to a new study conducted by Oxford Economics and sponsored by SAP.
The research found that only one in five business executives today would be considered a digital leader. But being a digital leader translates into stronger financial performance, as 76% of executives defined in the study as digital leaders report strong revenue and profit growth, compared to 55% of all other executives surveyed. The study also reports more satisfied, engaged employees, as 87% of digital leaders have employees who are more likely to be satisfied on the job, compared to 63% of all other respondents.
In fact, digital leaders score 21 percentage points higher on employee retention than all other respondents, as employees within their organizations are more likely to stay even if they have the opportunity to leave for a new job.

Dive Insight:

"It's clear that a different kind of leadership is required to succeed in the digital economy," said Mike Ettling, president of SAP SuccessFactors. "People, particularly millennials and the generations behind them, expect more inclusive and social leaders, more diversity at the leadership level, and less hierarchy."

According to the study, the traits of today's digital leaders include an ability to simplify decision making, as 80% make decisions that are data-driven, and 63% report that their organizations are capable of making decisions in real time, compared to only 55% and 46% respectively of others surveyed. They are also better able to prioritize diversity and inclusion, as their organizations are more likely to see more diversity in the workforce at midlevel management, and have a higher proportion of female employees than other companies. They have more diversity programs (46% versus 38%), recognize diversity's positive impact on culture (66% versus 37%) and equate increased diversity to financial performance (37% versus 29%).

For HR and all other business leaders, the findings may be a wake-up call. Employees, younger executives and financial results are all sending a clear message about the importance of updating and upgrading leadership skills for the digital age. HR has no choice but to make this transition to digital leadership, because it's part of an overall shift in the HR business itself.