In an increasingly digital world, business leaders must learn to operate in a boundary-less way

Around seven years ago, Netscape founder and venture capitalist Marc Andreesen famously said, “Software is eating the world.” Today, we can see that his prediction has come true. The top 5 publicly traded companies by market capitalization are all software companies—Apple, Alphabet, Microsoft, Amazon and Facebook. These companies have leveraged digital technologies to disrupt numerous industries and displace many companies from their pedestals. According to Accenture CEO Pierre Nanterme, “Digital is the main reason just over half of the companies on the Fortune 500 have disappeared since the year 2000.”

 One of the business realities in the digital age is that organizations have become increasingly boundary-less. Uber has more than a million drivers across the world, but not one of them is on their payroll. Airbnb delivers great accommodation experience for travellers across the world, but not one of the rooms it offers is theirs. In essence, these organizations operate in a boundary-less fashion, leveraging assets and people outside their organization to deliver value to the customer. Furthermore, there is a marked shift in the labour market towards freelancing, a trend now called the “gig economy”. According to a 2015 Intuit study, 43% of the US workforce will be freelancing by 2020. This fundamentally alters how leaders need to think about organizational boundaries.

With the rise of digital companies, I can foresee, more than anything else, a leadership challenge looming. Leaders in traditional, non-digital companies have not demonstrated adequate courage to venture beyond their comfort zone. They have also not unlearnt, and relearnt the new business realities, fast enough. With more and more organizations becoming boundary-less, inside as well as outside, the fast-changing business landscape calls for highly agile, deeply specialized skill sets in leaders.

Businesses are increasingly facing a huge challenge in finding and deploying the right talent at the right time. To deal with this challenge, progressive businesses are now moving away from rigid, hierarchical structures to boundary-less, flexible structures that enable collaboration and co-creation with subject matter experts inside and outside the organization. Accenture, the global professional services firm, calls this organizational model the “liquid workforce”.  

To adapt to this new business reality, and to truly convert this trend into a competitive advantage, leaders must make some fundamental changes in the way they operate. First, they need to start thinking of their business as a dynamic ecosystem with many moving parts, some internal and others external. Second, as orchestrators of this boundary-less business ecosystem, leaders need to move from a command-and-control style to a collaborative style. Furthermore, they need to embrace the idea of distributed authority and create a fluid network of talent that operates more like a talent marketplace. 

 In the digital world, leaders can no longer simply get things done by leveraging the position they occupy in the organization chart. Leaders now need to get things done by building trust with diverse stakeholders. From a cultural perspective, leaders need to start promoting the values of trust, openness, collaboration and sharing. Salesforce CEO Marc Benioff aptly said, “The fourth industrial revolution starts with one important point: Trust.”

Using dashboards and open software interfaces, organizations are introducing radical transparency in the way they work. Amazon CEO Jeff Bezos had issued an internal memo in the early days, instructing teams to interact with one another through programmable interfaces. The move helped Amazon in many ways. It helped break down internal silos and the open design encouraged transparency across the organization and enabled diverse teams to collaborate. Collaboration, after all, sits at the heart of how a digital organization innovates. Leaders, therefore, need to build a strong culture of peering inside and outside the organization. In the industrial age, whilst one would hoard valuable information, in the digital age, the natural instinct is to share it. Sharing allows individuals and teams to build on each other’s work and accelerate the pace of innovation.  

Ultimately, a boundary-less leader helps his organization stay relevant, and, more importantly, thrive in the digital age, by questioning the notion of organizational boundaries, revisiting the principles of organizational design, redesigning how work gets done, and reimagining the values that power modern organizations. 

Rajiv Jayaraman is the founder and CEO oft KNOLSKAPE, an end-to-end learning and assessments platform.