Friday, June 30, 2017

The Digital Board’s Digital Inquiries


The digital board’s digital strategy inquiries help the top management to identify blind spots, clarify priority, and avoid pitfalls on the way of strategy implementation.

All forward-looking organizations across the industrial sectors are on the journey of digital transformations. An effective board provides the guidance about what core to preserve and what future to stimulate progress toward. The board with digital savvy BoDs 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 with a premium speed. Here is a set of digital boards’ strategy inquiries.

What’s the weakest link in strategy execution? Strategy management is one of the most important business activities in organizations today. It is a cohesive entity of policies, programs,  and projects that concentrate and fuse corporate resources to enable an organization to establish, sustain, and enhance its competitiveness and capabilities for self-renewal. The strategy management is about creating tomorrow's organization out of today. Therefore, it is critical to identify and strengthen the weakest link and determines how each part of the organization, including all of the key functions must "put it all together" to be successful in implementing strategy and bring tangible business results and reach the business vision ultimately.

PEOPLE are always one of the weakest links in strategy execution. The business strategy execution gaps exist at the people’s mindsets, the collective mindset and attitude - the organizational culture, and the capabilities/skillset to implement the strategy. It is important to make sure that the strategy has been communicated broadly and well understood by everyone. The good strategy will break an executive team out of tunneled vision, and transform into a creative, entrepreneurial, and strategic perspective.

Another interesting link to explore is the driver for identifying key strategic processes. It is usually the parameters that affect strategy execution the most which are key. In essence, strategy implementation is fundamental to how processes should be managed. This is an important issue to understand that the processes in your business will deliver/create the business result.

Methodologically, a more adaptive strategy-development process places a premium on effective communications from all the executives participating. Most companies are lacking a holistic strategy of how they apply technologies to drive the digital transformation, and it's the information management strategy that most often goes unmanaged. Information Strategy must be updated from time to time based on the current business requirements. Or if any advanced technology is driving the business, then it happens on the other way round.

General speaking, in the boardroom, the key dimensions of practicing corporate governance discipline are policy setting, strategy oversight, performance monitoring, as well as understanding accountabilities of environment - regulatory, shareholder, etc; The logical scenario is to develop business strategy, also develop business policies offering further constraint or guidance to implementation of strategy, and then monitor performance and implementation of strategy, as well as manage risks across all domains of interest.

How to criticize digital strategy via questioning? A common definition of strategy is the choices made by a firm on where and how it chooses to compete and cooperate in order to achieve its goals and objectives and strive to fulfill its mission. Businesses all need some sort of strategy since anything is easier to steer once in motion, but much of the joy comes from the journey, not the destination.

Due to the “VUCA” digital new normal and fast growth of information, "strategy" is definitely a different beast nowadays, because the speed of change is accelerated, it might be less about three or five years planning horizons and more about how to continually adapt to changes in the marketplace caused by disrupting technologies and consumer behaviors. In strategy management, it's very tempting to 'pull the structure lever' too early before you have decided on, it’s important to oversee the strategy via asking the right set of questions: Which products/services in which markets with what emphasis? Which capabilities need to be developed or acquired to make that happen? Which processes need to be improved or transformed? What capacity for marketing, sales, manufacturing, etc., and for projects and management, will you need? What structure will move these products to the markets with these capacities and processes? What’re your downside risks and what’re your upside risks?

The board of directors should take an outlier's lens to criticize the business strategy via questioning wisely. Doing this will definitely pay huge dividends. “What don't I see?" means "Where is the potential?" In other words, what strategy, product or initiative is not evident now but, with a few adjustments or redirection, can emerge.

How to manage risks and identify opportunities as well? The exponential growth of information brings both unprecedented opportunities and significant risks to the organization today. However, many of the opportunities are in the blind spots. When you are not looking at your blind spots, someone comes in and disrupt you over time. Hence, the corporate board plays a crucial role in helping the senior management identify the blind spots at the strategy level, and bridge the gaps at the cognitive level. In business, every day is a risk, but when a company embarks on a growth strategy, the risk curve will always be greater than a business as usual approaches. And more than 80% of today's business value is based on their ability to embrace complexity, understand and prepare for the future, grasp opportunities, decide which one to go after and which one they will not go after and clearly articulate forward the way value will be created.

The corporate board and management also should update their methodologies to manage risks in the digital era. Because the biggest risk for businesses is beyond those traditional graphs and curves. In fact, companies that are still stuck with their old ways run the risk of being rapidly disrupted. The risk management needs to lift up from risk control to risk intelligence which can identify the potential business growth opportunities.

One of the obvious issues raised from many significant business failures is the failure of governance. Often the current governance models can't enable the independent board of directors to get enough information to hear the whole story. The problem of information asymmetry is endemic to the entire governance process. It is one which will not go away. But information asymmetry cannot be used by the board to escape taking responsibility for something significant. They should keep asking tough questions, for instance, who was responsible for feeding unreliable information up the organizational food chain? What checks were there to test the reliability of such information? How robust was the organization's risk assurance system, all the way up to the management board? How could that system miss something that has had a widespread impact? Was senior management and, ultimately, the management board, too easily assured? Who was complicit in this and how far up the organizational food chain did the cover-up go?

The digital board’s digital strategy inquiries help the top management to identify blind spots, clarify priority, and avoid pitfalls on the way of strategy implementation. A digital-savvy BoDs equipped with critical thinking mindset has the advantage of pulling enough resources and pushing the business model of technology, trustworthiness to improve strategy success rate and accelerate business performance.


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