Wednesday, May 18, 2016

How to Digi-Transform the Board of Directors

As outlined at length in Part 1 of this series, if digital transformation is to succeed, it must start at the top, with the Board of Directors. This article explores how to achieve a digi-transform of the Board itself. The next article will address the C-Suite. A final article will discuss how to change the business culture such that digi-transform can be accomplished.


Traditional Board of Directors is Obsolete 
For sure it is serving as a drag and impediment to Digi-Transform. The following self-explanatory table illustrates the difference between a traditional and a digital Board of Directors in terms of roles and responsibilities.


Most of the traditional roles obviously continue to be important. However, a digi-Board must assume new approaches if the company is to be transformed. As shown, this means a digi-savvy Board must:

  • Become digitally savvy in all aspects
  • Create a dedicated Committee on Digital Transformation
  • Clarify the business model with a digital framework and process
  • Set a Digi-Transform Strategy to meet the opportunities that exist
  • Mandate what products and processes should be pursued, through what channels
  • Oversee the Digi-Transform process and identify future-proof digi-growth opportunities

BOARDS NEED a DIGI-TRANSFORM COMMITTEE

Above all, Boards must be digitally savvy and establish a solid Digi-Transform Committee. Working through that Committee, the Board will identify and approve future-relevant digital growth opportunities, and oversee their accomplishment. Such a Committee is absolutely essential to keep the company at the digital forefront. Without its guidance and oversight, it is almost certain that any digi-transform initiative will fail.


Yet only 4 of the 110 leading companies surveyed and mentioned in Part 1 of this series have a Technology/Digital Committee of the Board. Clearly, most Boards of Directors are significantly falling short and underperforming.  Digital change cannot be driven by the CIO alone. It is a joint Board and C-Suite task, across functional departments (as we shall discuss in Part 3 of this series).

Overall, the Board, the C-Suite, and the entire organization must learn to "Think Digital, Act Different" every day, as a normal way of behaving, if they are to succeed and become the digitally competitive leader of their industry. As well, the enterprise must be innovating daily to stay out front on the leading edge of digital change.




HOW to DIGITIZE a BOARD's EXPERTISE

Unless the Board is digi-transformed, neither will be the company.

To change the digital DNA of the Board and C-Suite, I suggest holding an intense strategy session at an offsite "Digi-Transform Day," to connect the Board and C-Suite with a common digi-transform mindset. Then follow that up with weekly digital coaching sessions of the Board and C-Suite for as long as necessary. This has proven most effective at companies where I have facilitated this process.


You must add an experienced Digi-Transform Advisor to the Board. Such a digital "pilot" will point the way to the most-suitable transformation agenda to suit the company. They will also advise both the Board and CEO on the best future opportunities, help to set the overall "moon-shot" vision/mission, monitor progress, keep an eye out for the future, and suggest course-corrections as the enterprise progresses towards a future-proof objective. 


One kind of Digi-Transform Advisor might be the CEO of a big company that is successfully transforming. But that person most likely has their hands full, guiding their own company, and there are so few of them anyway. Also, it can be no consolation to have a Board member who is a CEO from a traditional tech company, such as cable or telephones; that may be the wrong decision entirely because many of them are digital laggards, or at best still learning. As well, no academic has the hands-on practical experience you need.

You are far better to source an experienced Board Advisor or C-Suite Consultant who has already helped a few companies launch down the digi-transform path. But don't hire a big consulting firm; they will send you overly-priced juniors who simply lack top-level Board or C-Suite experience, and frankly they may be no more diggy-savvy than you are. You are much better advised to bring in an experienced individual who will quickly figure out what is required, from day one.

QUALIFICATIONS of DIGI-TRANSFORM ADVISOR


Through consulting and advising a variety of businesses, and my experience as an Interim CEO, I have found that personality and expertise are the key attributes of an effective Digi-Transform Boardroom and C-Suite Advisor:


It is by no means enough for this Digi-Transform Advisor or Board Member to simply attend periodic Board meetings. They need to work with the CEO on a daily basis, to dive deep into the company to get a complete sense of what is required to achieve digi-transform, and then to help lead the initiative.

Such a person should be appointed as the Chief Digi-Transform Officer (CDTO), sitting alongside the CEO and Board Chair, and working daily with the C-Suite to drive the transformation forward. That would get everyone on the same digital page, pursuing the same mandate. This focal-point "go-to" individual also should head up the suggested Digi-Transform Committee of the Board, to guide and oversee the entire effort.

DIGI-TRANSFORM PROCESS FRAMEWORK

The Digi-Transform Committee should follow a thorough framework to achieve its objectives. Throughout the digi-transform process, the Board must constantly build and develop a leading-edge C-Suite team and a company-wide culture that sustains ever-improving performance and customer satisfaction. You must think and act like a start-up, with a futuristic approach if you are to re-invent the business. 

The framework to follow is multi-dimensional. In a general sense, you need to move rapidly to:
  • Design a brand new start-up business model or reconfigure how to reinvent the existing model
  • Sustain and refresh the new digi-culture through talent recruiting and performance rewards
  • Set an ambitious digi-transform vision/mission over three sequential time horizons:
o   Budget for and launch short-term agile initiatives to create momentum and fuel new growth
o   Drive medium-term innovative gains to strengthen your digi-competitive edge

o   Drive sustained innovation, with a portfolio of digi-transform initiatives to capture market share


Ongoing Digi-Governance should follow a 3-part framework, as follows and explained below:



1. TRANSFORMATIVE VISION & STRATEGY

The Board and CEO need to frame a common vision of what the transformed enterprise will look like, based on how the future will be different and better than today, and why the change is imperative. Otherwise, employees will tend to do what they have always done, and nothing will change. Then the Board needs to build a strategy that will accomplish the mission.

In terms of the vision/mission, you need to adopt a digi-mindset and build a culture of sustained, non-stop digi-innovation that exceeds customer expectations with a "digi-wow" experience. Think and deliver like Amazon. Anything less is not sufficient.

To be future proof, your strategy must be digitally leading-edge, based on future trends expected to manifest over various time horizons: next quarter, next year, next 3 years, next 5 years, next 20 years.

In particular, Boards need to:
  • Assess, monitor, understand, and anticipate the fast-changing market
  • Think ahead of tech changes and other trends
  • Ask what it all implies and what you need to do about it, by when
  • Proactively map out, plan for, incorporate and manage strategic digital opportunities (and risks)
  • Establish strict digi-governance guidelines overseen by the Digi-Transform Committee


2. BUILD C-SUITE and COMPANY-WIDE DIGITAL INTENSITY and COMPETENCY

The Board, Committee, and CEO must understand the threats and opportunities that digital represents, and honestly and continuously assess the firm’s digital maturity, or lack of it. To make the vision a reality, the Board must ensure that the company invests in the right areas. This will require cutting back or eliminating unproductive activity, while ramping up digital and human resource investment where the company can best excel in the future.
  • Ensure digital expertise at all levels, not just in IT or marketing, and develop it among rising leaders
  • In essence, the C-Suite must be a defacto Digi Executive Committee to ensure coordination, collaboration, and engagement at all levels of operation and functions of management (no more silos)
  • Constantly assess, upgrade and reward digital competence and expertise at all levels
  • Identify, recruit, and mentor digital talent across the organization
  • Ensure all employees are intently and digitally engaged

3. DEVELOP and SUSTAIN a DIGI-TRANSFORM CULTURE

This approach will almost-instantly create a digi-culture that operates like a brand-new start-up that re-invents its industry. You cannot remain encumbered by outmoded industrial-era processes and a moribund culture. You must be extremely agile and fast-moving, developing prototype products, new processes, pilot projects, and fast roll-outs. You must be willing to experiment, with a high tolerance for risk. The digital marketplace will instantly tell you whether to expand, modify, or kill each experiment. As you build a portfolio of innovations, the risk will diminish rapidly. To achieve this:
  • Rapidly devolve a digi-culture that anticipates and creates change, and sustains innovation 24/7
  • Motivate an agile digi-transform forward view, in place of outmoded quarterly reports
  • Measure, assess, reward and celebrate digi-transform initiatives and successes
  • Constantly laud and celebrate the new digi-culture to entrench its validity.
The next article in this series will explain how the CEO and C-Suite needs to operate, including the type of CEO required. A final article will explain in more detail how to transform the overall organizational culture, as follows:




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Copyright 2016, Frank Feather

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