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Communications & Connectivity

How 5G is Transforming Leadership

  • June 2022

Ushering in the next industrial revolution, 5G is more than just another G. 5G can handle greater data volumes and many more connected devices than 4G, and at much lower latencies. Coupled with other technologies, such as the Internet of Things (IoT) and Augmented Reality (AR), 5G will lead to more connected healthcare, autonomous mobility, smart cities, and better security, among other evolutions across industries. 5G has the potential to impact each and every industry, connecting everyone and everything, including machines, objects and devices. 

“5G is simply a game changer,” said one executive in a recent call with Egon Zehnder. “Firstly, better broadband will bolster the capability of video calling and mobile conferencing apps. Secondly, reduced latency will boost AR, virtual reality (VR) and IoT. Moreover, the rollout of 5G will power the future of smart cities.” 

But what does this all mean for leaders? Understandably, many business leaders feel trepidation about the industry-wide repercussions posed by 5G. Studies show that 80% of executives expect 5G to impact their business – by paving the way for more nimble, agile competitors; by mandating more rapid digital transformation for more established organizations; and by enabling core business and technologies to run more intelligently. 

Going forward, CEOs from all industries will need to display strong leadership as they tackle both strategic and operational challenges and guide employees through this complex transition to a new digital era. Faced with the threat of more successful players emerging, telecom operators will likely need to overhaul most of their organization. In parallel, they will need to define, implement and own their company’s 5G strategy, whether committing to a fast national or regional rollout or focusing on certain areas, sectors and clients.

Transforming the business around B2B

Telcos are increasingly relying on managers with business-to-business (B2B) experience to set up and run B2B units and transform into more customer-centric organizations amid an industry shift from business-to-consumer (B2C) to B2B. 

For telcos, B2B spells huge potential. 5G networks can be managed remotely, enabling all machines within this network to be interconnected and operations to be run in real time. B2B is about increased revenue potential, allowing telcos to sell their services to other businesses, governments or municipalities, for example, to help tackle healthcare challenges or build smart cities. It is also about diversifying the telco’s revenue base away from the more commoditized traditional services and towards more “sticky” and business critical offerings.

Open to new partnerships

Telcos can’t do this on their own anymore. They are increasingly abandoning their traditional roles and embracing external partnerships. Many recognize that these partnerships will help them open up new markets, develop stronger products, meet new opportunities, address challenges and deliver what is needed. 

A number of telcos are adapting a platform strategy approach, where platform participants benefit from cooperation with others. This can be with smaller partners, who drive innovation, or with hyperscalers who will enable telcos to develop new capabilities beyond connectivity – adding more sophisticated services to their portfolios, such as identity and security.

“Previously, telcos tended to do everything by themselves,” shared one CEO. “Nowadays, that is no longer realistic. There are more and more specialists emerging, such as for the software applications you need for 5G. Telcos now need to partner with these experts.” 

To form these partnerships, telcos need a new style of manager: one who can thoughtfully and subtly build alliances, with strong collaboration, influencing and communication skills, the ability to see things through, and who can connect well with the public. Gone are the days when competition in the telco space was a zero-sum game. And so a new style of leader must emerge.

The whole organization embraces transformation

Even in large corporations, CEOs will need to build a corporate culture that fosters innovation. This will mean a massive cultural transformation, involving the reskilling of employees and embedding a new culture.

As 5G transforms the entire telco industry, leaders’ skillsets will also need to change. Firstly, they will need to improve their technical understanding. The dilemma many organizations face is that many leaders simply lack sufficient knowledge of what 5G is all about. Those with technical insights tend to lack commercial expertise, and vice versa. 

Evolving the necessary knowledge from inside telcos is unlikely. Instead, external experts from non-telco companies need to be recruited – they understand the latest technologies and can also train and update the skills of the existing workforce. 

This cultural and learning shift is not a matter that can simply be delegated. The CEO needs to be actively involved and ensure that their company is undergoing the necessary transformation – of technology, of skills and of culture. 

And CEOs can’t do this all by themselves; they need to call on all of their teams’ competencies to meet the challenges ahead. As Egon Zehnder engaged with a number of telcos to support them develop their leadership team’s digital leadership competencies, one CEO shared: “The whole telco group will need to change, not just the product development department.” The change involves assessing existing capabilities, supporting the team in planning its long-term succession strategy, working on architecting individual development plans and supporting the team throughout the transformation.

Telco CEOs become digital transformation champions

Essentially, Egon Zehnder sees future successful telco leaders as “Digital Transformation Orchestrators”. We are increasingly seeing technology leaders with a growth mindset coming to the fore. 

These leaders will need to demonstrate a business mindset, customer orientation and above all, humility. In the words of one CEO, “Being entrepreneurial but not humble and not being a team player simply won’t fly. After all, these competencies can hardly be learned later.”

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