Millennial executives are appearing in the C-Suite in greater numbers and are expected to power digital transformational change as their numbers reach critical mass.
The finding is drawn from a new study by Oxford Economics commissioned by SAP SuccessFactors for which preliminary findings were presented at SAP’s recent SapphireNow conference.
The study examines the future of work and what makes a company a “leader” in the digital era and covers 20 countries including Australia and New Zealand.
“We were really interested in what’s it going to take for us to be ready for the future, how do organisations get ready for the future of work if we’re moving into a digital era, and what’s that going to mean in terms of workplace shifts for leaders, for innovation and flexibility?” SAP SuccessFactors workplace futurist Dr Karie Willyerd said.
Dr Willyerd said that “digital leader” companies typically displayed a number of characteristics.
These included the level to which technology informed operations, technology literacy rates among management, employee skills development, the extent to which decisions are data-driven and real-time, and the efforts that had been made to reduce complexity and bureaucracy.
“If you made four out of five of these we made you a digital transformation leader, and about 12 percent of the companies that we talked to fit in this category,” Dr Willyerd said.
“That means 88 percent aren’t there yet, so the journey [to become a digital leader] has just started.”
Though the results of the study are very much preliminary – it’s only three weeks since the data was collected – already the researchers said they had proven three hypotheses.
“Our first hypothesis was that digital transformation leaders have more mature strategies for their human capital such as succession planning, diversity, talent development, and so on, and that hypothesis was verified,” Dr Willyerd said.
“The second hypothesis was they have more engaged employees who go above and beyond for their companies.
“Our third hypothesis was that because they’re ahead of the game and seeing where the market is headed, that they would have stronger revenue and profit growth and [that] was validated.”
On that third hypothesis, Dr Willyerd said preliminary results suggested digital leader companies reported profits 30 percent higher than non-leaders, and 39 percent higher rates of profitability.
“I think that’s really exciting news,” she said.
Dr Willyerd was also excited about the types of initiatives that underpinned these kind of financial results.
“When we asked executives and employees from the companies that are the digital transformation leaders about their investment in people, the number one thing they talked about was the investment in training, and particularly in digital training, to get people ready,” she said.
Another interesting finding is around the agents of change for digital transformation.
“One of the most exciting things that we’ve seen and we need to find out a lot more about is the oldest millennials now are in their mid-30s, so some of them are executives at the C-Suite,” Dr Willyerd said.
“Now as a researcher if you get 10 percentage point differences between survey responses that’s kind of exciting.
“[We found] 20 and 30 percentage point differences in terms of how millennials [and non-millennials] are seeing the world.
“Millennials are saying ‘we’re not innovating fast enough’, ‘we’re not diverse enough’, ‘we aren’t as collaborative as we need to be’, and what they’re saying compared to what the non-millennial executive partners or colleagues are saying is dramatically different.
“So we think that means change is afoot. Change is coming because there’s a really different point of view brewing.”
A full analysis of the study is expected to be presented at the SuccessConnect conference in late August.