Wednesday, June 21, 2017

The Digital Board’s Composition & Leadership Perspective

The high performing Board shows the ability and openness to "question itself and its decisions/ discussions."
  
Organizations today have to live up with the business dynamic which is uncertain, ambiguous, complex and flux. The overwhelming growth of information is permeating every corner of the business, and rapid changes are touching every activity, function, business, and industry.  The matter of fact is that the changes sweeping the business are hugely disruptive and there is nowhere to hide. The board of directors as the de facto guardians of modern organizations has an important role to play in steering the organization toward the uncharted water and blurring business territories because they oversee strategy management and set the policy for driving changes. With more and more organizations are on the journey of the digital transformation, from the board composition perspective, which challenges do you face, when and how do you tackle the issue of change in the boardroom? How should BoDs get an in-depth understanding of their role and responsibility while the business change is accelerated across the business scope and knowledge life cycle is shortened significantly? How to build high-performance boards for today and the future? And what are important perspectives to build a digital savvy board?

The boardroom composition will directly impact on how they lead and which tone will they set for the entire organization to follow: While there are many components of leadership, one of the most important ones is the ability to adapt, model and influence change. Contemporary boards play the crucial directorial role in business strategy oversight, performance monitoring, business advising and policy setting. Not only do today’s BoDs need to have sufficient knowledge to understand the digital business ecosystem, but also they should have the collective insight to present today and foresee the future. The high-performance board makes the disproportional impact on running a high-performance business. The high performing Board shows the ability and openness to "question itself and its decisions/ discussions." It’s not talking about "second guessing" but the ability to validate and double back on decisions past and present discussions. This is basically getting the "oversight" closer to the forefront (if not within) of every board process. They frequently brainstorm issues such as board composition, structure, and leadership - take the periodic risk assessment and well-tuned succession plans. They have to continue removing the barriers, filling the gaps for improving the performance effortlessly. At the digital age, status quo only cannot make one a real leader, if they don’t have a purpose of leading or lack of insight or vision upon the directions, lack of in-depth understanding and expertise to connect the mind and touch the heart to improve leadership empathy.

Leadership is all about change and directorship is about steering the business toward the right direction: Digital transformation is in every forward-thinking company’s top agenda; innovation is the light every organization is pursuing, and digitization becomes the new normal of business expansion. All of these bring the significant opportunities and responsibilities for the new breed of digital BoDs. Because the board in a high-level directorship position plays a crucial role in strategy oversight, business advising, and monitoring, as well as setting key digital tones in leadership development and talent management. High-performing boards set goals for their own performance and regularly evaluate how they are performing as the board.  An effective board enables and directs management towards good outcomes, and ensure the business is on the right track to reach well-defined business goals. If the results are lacking then the board effectiveness must be questioned.

BoDs are also the mastermind behind digital transformation: The contemporary corporate board as the directorial role plays a significant role in overseeing strategy, advising corporate executives and monitoring business performance. The BoDs should also walk the talk to digitize the boardroom with strategic imperatives because often the digital tone is set at the top and echo spirally to all levels of the organization. The differentiator between a digital leader and a laggard is not about the title and authority, more about the mindsets and attitude. Digital attitudes are about being experimental and persistent. Hence, digital BoDs today also need to show intellectual curiosity, creativity, learning agility, and risk tolerance, etc. One of the significant tasks for BoDs, leaders, and managers is to make either strategic or operational decision. Decision effectiveness is often compromised by group thinking (group polarization means that a group of people can make a more extreme decision than an individual.) which is often caused by the homogeneous team setting with cognitive gaps. From the board composition and leadership perspective, bridging cognitive gaps and sharing different perspectives becomes a strategic imperative for improving directorship effectiveness and leadership maturity.

The question is whether there are enough people with the proficient skills and expertise to do the job in the heat of today’s boardroom facing business uncertainty, rapid changes, continuous digital disruptions, and unprecedented competitions. While directors bring many competencies to the table, they should keep learning agile and master digital fluency, adapting to the increasing speed of changes and the exponential growth of information.  Digital BoDs have to understand what's required and how as a high-level basis of going digital mean to the business, so they can make a significant impact on accelerating digital transformation by making insightful inquiries and taking a step-wise approach with the steadfast speed.

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