Source: SAP. Agree or disagree? Management and staff in Southeast Asia and globally share their thoughts in the Leaders 2020 study.

Almost 25% of Southeast Asian companies are considered digital leaders, according to a recent study by SAP and Oxford Economics. This figure surpasses the global average of 16% reported in the Leaders 2020 study.

This new category of high-achieving companies reports greater profit increases, improved employee engagement, and more inclusive workplace environments. These organizations have leaders who effectively convey a company-wide digital plan, prioritize continuous skill development for both management and employees, and streamline their organizational framework.

Examining Southeast Asian businesses in the Leaders 2020 study confirms the advantages of diversity. There’s a clear link between companies excelling in digital change and those with a deeper grasp of diversity’s significance. Both global and Southeast Asian respondents who are digital leaders are more prone to acknowledge diversity’s positive cultural impact (66% and 62% respectively). However, only digital leaders tend to recognize its financial benefits (37% globally versus 25% in Southeast Asia).

Southeast Asian companies have become more diverse in the past three years than those in other regions. 75% of Southeast Asian respondents observed increased diversity within their organization’s general workforce, and 42% saw growth in board and senior leadership diversity. This compares to 67% and 34% globally. However, less than 40% in Southeast Asia believe their company has truly effective diversity programs. This suggests room for improvement, especially at senior leadership and board levels.

The Leaders 2020 study also revealed that just 61% of Southeast Asian executives (55% globally) utilize data-driven decision-making – a key characteristic of a digital leader. Unsurprisingly, 62% of Southeast Asian executives (59% globally) think their workforce possesses the necessary skills to adapt to evolving digital technologies.

Scott Russell, President and MD of SAP Southeast Asia, notes, “A diverse workforce nurtures bold, innovative thinking and provides insights only possible through that diversity. It’s not a coincidence that high-performing organizations excel in both using data for decision-making and cultivating a diverse workforce.”

Additional findings for Southeast Asia include:

• Improved financial results: 76% of executives identified as digital leaders report strong revenue and profit growth, exceeding the 60% reported by other Southeast Asian executives.
• Content and engaged employees: Effective digital leadership not only boosts financial performance but also fosters positive workplace cultures. Nearly 9 out of 10 (87%) digital leaders report having more satisfied employees, significantly higher than the 51% reported by other respondents in Southeast Asia. Additionally, 75% of digital leaders have employees who are more likely to remain in their roles, contrasted with 45% in the region.
• More developed talent strategies: Digital leaders are more inclined to invest in their workforce and have more sophisticated strategies for talent acquisition, development, and retention. For instance, 56% of digital leaders primarily fill roles internally, compared to just 33% in the rest of the region.

The study also found that Millennials are swiftly assuming leadership positions. 22% of executives surveyed in Southeast Asia are Millennials, surpassing the global average of 17%. Despite this higher proportion of young executives, only 45% of Southeast Asian executives state that leadership collaborates with employees on career development – a crucial factor in nurturing Millennial talent. Young executives prioritize diversity and its advantages, often coming from companies that value and actively promote diversity.

Russell adds, “A PwC report, Millennials at Work: Reshaping the Workplace, projects that Millennials will make up 50% of the global workforce by 2020. Listening to young executives could offer a shortcut to digital leadership, as long as the experience of their senior colleagues is also valued. Achieving this balance requires intergenerational listening. Generational diversity is as crucial as other forms of workplace diversity. Baby Boomers, Gen Xers, and Millennials each bring unique perspectives, vital for a dynamic organization. At SAP, our commitment to collaborating with Millennials has resulted in five generations working together to help our customers ‘Run Simple.’”

“The digital economy’s rapid evolution shows no signs of slowing down. Organizations failing to continuously adapt their approach to digital leadership risk lagging behind. Technology remains the key driver of growth, fostering innovation, enabling transformation, and leveling the playing field for businesses of all sizes.”

Despite a promising digital landscape, leaders in these companies cannot afford complacency. The Leaders 2020 study suggests that these companies aren’t sufficiently investing in future leadership development, employee upskilling, or employee engagement. The research identifies areas for companies to enhance leadership skills and boost performance:

• Communicate a shared digital vision across the company: Articulating a clear digital direction is a hallmark of effective leadership.
• Regularly update executive and employee skills: Adapting to new digital skills is crucial in the digital economy.
• Simplify organizational structure: Streamline processes to eliminate bureaucratic obstacles.
• Prioritize diversity: Cultivating a diverse workforce is key to success in a globalized economy.
• Value the insights of young executives: Their input is essential for digital transformation as they represent the future workforce.

Interested?

Learn more about the study and the prerequisites for digital leadership