Only One Quarter of Southeast Asian Firms Ready for Digital Leadership

SINGAPORE — 15 December 2016 —
Nearly one-quarter of Southeast Asian
businesses are Digital Leaders, a new study by
SAP SE (NYSE: SAP) and Oxford Economics, the“ Leaders 2020 study” shows. This is
higher than the global average
of 16%; this new class of high-performing companies is reporting
stronger profit growth, higher employee engagement, and cultures that
are more inclusive.

These high-functioning organizations have executives who communicate a company-wide digital strategy, keep management and
worker skills up to date, and streamline organizational structure.

Companies
have become more diverse in Southeast Asia than in other regions over
the past three years. Three-quarters of Southeast
Asian respondents saw diversity improvements in the general workforce
of their organization, and 42% saw an increase in board and senior
leadership, compared with 67% and 34% globally. However, less than 40%
in Southeast Asia state that their company has effective
diversity programs in place, signaling more could be done, especially
at the senior executive and corporate board levels.

The
Leaders 2020 study also found that only 61% of Southeast Asian
executives (vs. 55% globally) are making data-driven decisions,
a key factor that makes a Digital Leader. It is of little wonder that
only 62% of Southeast Asian executives (vs. 59% globally) feel that
employees are equipped with the skills necessary to keep up with digital
technology.

“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 organizations,” said Scott
Russell, president and managing director, SAP Southeast
Asia.

The Leaders 2020 research findings for Southeast Asia revealed at SuccessConnect 2016, the premier conference held by SAP
SuccessFactors for HR and C-suite executives in Singapore, shows that it pays to be a Digital Leader:

·
Stronger financial performance: 76% of executives characterized as Digital Leaders report
strong revenue and profit growth, compared to 60% of all other Southeast Asian executives.

·
Satisfied and engaged employees:
Effective digital leadership drives more than financial
performance—it also creates healthier cultures. 87% of Digital Leaders
have employees who are more satisfied, compared with just 51% for
respondents in Southeast Asia. 75% of Digital Leaders also have
employees who are more likely to stay in their jobs if
given the chance to leave, as compared to 45% in the region.

·
More mature talent strategies:
Digital
Leaders are more likely to invest in talent and have much more advanced
strategies for talent recruitment, development and retention. For
example, 56% of Digital Leaders mainly
fill roles from within the company, as compared to just 33% for the
rest of the region.

The
study also found that millennials are quickly occupying corporate
leadership positions, as 22% of the executives in the
Leaders 2020 study from Southeast Asia are classified as millennials,
compared with 17% worldwide. Despite the higher percentage of young
executives in the region, only 45% of Southeast Asian executives say
leadership works with employees to develop their
careers—an important step in cultivating millennial talent. Young
executives are more focused on diversity and its benefits, and they tend
to come from companies that value diversity and take steps to build it.

“According to a PwC report “Millennials at Work: Reshaping the Workplace”, millennials will form 50% of the global workforce
by 2020[1].
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 organization. Our belief
in working closely with the millennial generation
has resulted in having five unique generations, all working together at
SAP to help our customers Run Simple,” Scott Russell added.

Despite
having a promising digital business landscape, leaders at these
companies should not rest on their laurels—survey
results from the Leaders 2020 study indicate that these companies in
the region are not devoting enough resources to developing future
leadership, employee skills or employee engagement. The research
identifies several areas where companies can improve their
leadership skills—and their business performance—through the following:

·
Communicate a company-wide digital vision – sharing a digital direction company-wide is demonstrative of a good leader.

·
Continuously update executive and employee skill sets – a necessity to adopt new digital skills in the digital economy.

·
Flatten the organization – reduce bureaucratic bottlenecks.

·
Emphasize diversity – cultivating a diverse workforce drives success in a global economy.

·
Listen
to young executives – as they form the key workforce of the future,
their advice would be essential for digital transformation.