Wednesday, March 21, 2018

The Policies, Performances, and Pitfalls in Digital Boardroom

Digital boards are like the steering wheel of their company, leading the business forward steadfastly.

The corporate board as the advising role is responsible to steer the organization in the right direction and provide an “outside-in” view of the business via multidimensional lenses. Digital doesn’t mean just tear down all the old things in the previous era. In reality, digital means to strike the right balance between the new way and the “old way,” and strike the delicate balance. Digital organizations are complex systems that are dynamic, self-evolving, self-adaptable, and self-perpetuating. Thus, the directorship in any organization must be able to adapt to changes and build abilities to advise, inspire, and motivate. The Board of Directors is the top leadership team that can make a great influence on shaping digital mindsets, setting the right policies, advocating changes, and steering the business to digital new normal.

Policies: The board of directors plays a critical role in setting policies and principles for changes and digital transformation. Great boards develop a fair set of digital principles, accelerate business performance, and improve organizational maturity. The guiding principles, in fact, become more crucial to be defined as core decision criteria and behavior guidelines to practice multifaceted management discipline. The principles as a compass will guide all levels of the organization to operate more like the human body operates with the cells and organs, the organization is able to make decisions in a very organic relationship with its environment, to run in the same direction to meet the same objectives in a rapid manner and achieve common business goals. Digital encourages autonomy and innovation. Digital principles provide a more robust foundation that makes it possible to straightforwardly derive solution-level governance and ensure the effectiveness of business management practices.

Though both performance and conformance are important at the board level, to run a future-driven business, boards need to make a laser-focused performance-driven agenda. Because the board’s role, in large part, is to make good decisions that enhance the value creation for the organization. At the majority of the time, the board agenda should be focused on the progress toward the goals, targets, schedules., etc. of the value maximization plan. 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. More specifically BoDs should be focused on the maximization of capital allocation, company performance, and shareholder value. ''Learning'' and ''Performance'' are key fundamental themes of better organizational governance.

Pitfalls: The corporate board as a senior leadership team has to overcome many barriers and numerous pitfalls in order to lead effectively. There’s knowing unknown, there’s unknowing unknown. High-performing boards can sense emergent opportunities, and predict potential risks, to steer the business ship to the uncharted water or the blurred digital territories. Because the leadership blindspots can cloud vision, cause decision ineffectiveness, and diminish leadership competency. In a phenomenon known as group polarization (the group of people more often “think the same,”), deliberation can intensify people’s attitudes, leading to more extreme decisions. The group thinking at the board level will create strategic blind spots and enlarge cognitive gaps. As senior leaders, it is the importance of dealing with the blind spots by learning how to be quick to listen, slow to speak, and slow to anger. BoDs have to prioritize and put significant efforts into governance and risk management. The board's ‘Deep common sense” leads toward ”Effective Judgment," which has been defined as applies common sense, measured reasoning, knowledge, and experience to come to a conclusion.

Sharpening “directorship” for getting digital ready is imperative for setting the top leadership tone to run a high mature digital organization. Digital transformation is a long journey, and the path for digital transformation can be iterative, evolutionary, revolutionary, or disruptive. Digital boards are like the steering wheel of their company, leading the business forward steadfastly.


Post a Comment