Wednesday, May 9, 2018

A Scrutinizing Board: How to Inspect Digital Quality of the Business

A scrutinizing board has a collective insight to inspect the digital quality of the business.

Organizations large or small are on the journey of digitalization, adapting to changes in faster speed and expand digital in every dimension of the business. The corporate board as one of the most critical leadership pillars and governance champions plays a critical role in leading change, and laser focus on the most critical things to steer the business in the right decision.

Business quality oversight: ‘Quality Management' is the capacity to approach the change of system or process creatively and inspire support to develop and achieve milestones and goals across the organization. Digital Quality Management, like Change Management, is not just one department’s responsibility, top leadership team and board should oversee the overall quality of the organization. It involves quality planning, quality control, quality assurance, and quality improvement. As quality shines through consistency, simplicity, and reliability. Quality Management starts with shaping the quality mindset and defining quality as the discipline. Quality is doing the right thing right, the first time. High-quality enterprises are comprised of high-quality leadership, people, high-quality products/services, and high-quality business capabilities/processes, etc, to effectively lead an organization to good practices. Corporate boards set policies, good policies directly impact on how people do things there, how processes are set, how decisions are made, and how people get incentivized, ultimately impact the overall quality of the business.

Business effectiveness oversight: Effectiveness is about doing the right things and qualifying the business result. Thus, corporate boards should always scrutinize the effectiveness of the business. They also play an important role in setting digital principles to ensure the right things are easy to do and encompass the business in the right direction. One of the pitfalls for achieving high business effectiveness is sometimes getting the “right answer” to the “wrong question.” Therefore, a scrutinizing BoDs should know how to frame the right questions and be open to the variety of point of views. Digital is full of uncertainty, velocity, complexity, and ambiguity, business leaders including boards should focus on effectiveness - the “why” part of business oversight, to ensure business having the vision and well-defined goals to reach it before jumping into “how.” Make sure that good things are easy to do, and bad things are hard to do. Make sure that the business is doing the right things first - pursuing effectiveness, and then, doing them in the right way - to achieve efficiency.

Business performance oversight: Corporate boards oversee the performance of the management team, the performance of the business as well as their own performance. Business performance is not limited to financial performance, but also to the firm's performance in creating value for employees and customers. The best practice performance management frameworks should inform the board, management, staff and key stakeholders in delivering services/solutions effectiveness, efficiency in achieving organizational outcomes and its progression towards achieving sustainability. The performance responsibility of BoDs should be focused on the maximization of capital allocation, organizational performance, and shareholders' value. It is not just about current performance, but also about the future performance, with a mid and long-term perspective. Performance measures are numbers in context, results related to your goals.

Modern corporate boards nowadays have many responsibilities, but also face various distractions. A scrutinizing board has a collective insight to inspect the digital quality of the business. Be inquisitive to ask tough questions, stay focus on setting good policies, overseeing business strategy, monitoring performance, and leading changes seamlessly.


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