Monday, January 15, 2018

Breaking Three Bottlenecks to Digitize Boardrooms

Breaking the bottlenecks for improving organizational responsiveness and changeability is a strategic imperative.

The corporate board plays a significant role in overseeing business strategy, setting principles and policies, monitoring performance to get digital ready. They are the advocate for changes and the mastermind behind digitalization. To lead effectively, they are able to break the bottleneck of digitalization and bridge the gap of opportunity between where they are and want to become, cascading the changes from the boardroom to the front line of the company in order to accelerate performance and get digital ready.

Communication bottleneck: The best in class board think differently and lead innovatively. Great boards are heterogeneous, inquisitive, intelligent, effective, innovative and influential. They also continue to add the new blood for enforcing digital acumen in the boardroom. Either at the boardroom or the different layer of the business hierarchy, effective communication is like the thread to connect all important business gems, for building the trust relationship, enforcing collaboration, and improve digital readiness. Often, communication gaps are caused by cognitive difference, ambiguous process, or management bottleneck. The BoD as the directorship role who have to make sound judgments and steer the organization in the right direction. Thus, the important issue is how the board accommodates diverse opinions and how they assess them and converge the diverse thought into effective decisions. It needs to first categorize what kind of communication bottlenecks existing and which communication gaps should be closed. There’s “lost in translation” syndrome in cross-functional conversations, there are all sorts of miscommunication at the different level of the organization, which are caused by perception gaps because people have the different knowledge base and cognitive understanding to articulate things. Therefore, it’s important to pay more attention to communication content (what's your message), communication context (what will indicate to a different audience) and communication style (one to all, one to one., etc, direct vs. indirect., interpersonal vs. intrapersonal, etc). To break down communication bottleneck, the hard communication barriers such as out of date processes, procedures, practices should be updated, and the soft communication obstacles like culture, politics or leadership style, etc., need to be overcome. The board needs to be able to leverage diverse viewpoints via listening, brainstorming, questioning, and break down leadership bottlenecks to accelerate changes.

Performance bottleneck: The Board's role, in large part, is to make good decisions that enhance the value creation for the organization. They need to focus on their own performance as well as the performance of the management team; and, that performance is not limited to financial performance, but also to the firm's performance in creating value for employees and customers. Performance and compliance are both important issues in the boardroom. However, many boards spend too much time on compliance or operational issues at the expense of the future. High-performing boards set goals for their own performance and regularly evaluate how they are performing as the board and where are the board’s performance bottleneck. They frequently brainstorm issues such as board composition, structure, and leadership - take the periodic risk assessment and fine-tuned succession plans. The board plays a critical role in monitoring business performance. Historically, performance measurement systems for most businesses have been financing driven. However, in many business situations, financial indicators only cover part of the story. To identify and break business performance bottlenecks, they need to help the management understand the whole story behind the scene, and ensure the business as the whole is superior to the sum of pieces. There is no doubt that the board only fulfills its role to shareholders and the management team when it is focused on unlocking performance and unleashing digital potential.

Innovation bottleneck: Innovation is not serendipity. Innovation is about transforming the novel ideas to achieve its business values. It needs to be a hot topic in the digital boardroom as well. Because the board should set the guidelines for both innovation management and management innovation. They can provide insight on when to break the outdated rules, when to bend the rules, and when to set new rules. There are different innovation bottlenecks such as idea management bottleneck, process bottleneck, resource bottleneck, innovation execution bottleneck, or talent bottleneck, etc. A company has finite resources to apply to get the best yield possible to meet a stakeholder expectation. There are always some constraints for businesses to explore new opportunities or deploy new ideas. The board’s oversight of innovation management helps to criticize innovation strategy which is an integral component of the business strategy, identify innovation management bottlenecks, de-bureaucratize process, derisk innovation implementation, and scale innovation effect systematically. Management innovation means to accelerate innovation at the multitude of organizational levels. The BoDs exemplify innovation leadership, create the space for dialogue and debate about digital innovation, develop a common understanding of it, and create the necessity and motivate for innovation blossom.

Breaking the bottlenecks for improving organizational responsiveness and changeability is a strategic imperative. It starts from the boardroom, and take the top-down approach for keeping the digital flow. Through breaking the bottlenecks in communication, performance, and innovation, digital-savvy boards have the advantage of pulling enough resources and pushing the business model of technology, trustworthiness, prepare, and launch change or innovation to accelerate performance and get digital ready.


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