Tuesday, November 27, 2018

Three Digital Barriers Limit the Board’s Strategic Oversight Effectiveness

Don’t be overwhelmed by the sea of information and pervasive digitalization, and don't get limited by the "VUCA" digital new normal. 

Organizations across the sectors are steadily moving into the digital era with characteristics of hyperconnectivity and fierce competitions. There’s knowing unknown, there’s unknowing unknown. The corporate board as senior leadership team has to overcome many obstacles and numerous pitfalls in order to lead effectively. Here are three digital barriers might limit the board’s strategic oversight effectiveness.

Uncertainty: Uncertainty is the digital new normal, the corporate board as one of the top leadership pillars plays a crucial role in helping the organization to deal with uncertainty and mitigate risks strategically and systematically. To improve their strategic oversight effectiveness, the board as the senior leadership team supplies the framing context in understanding uncertainty, visualize and identify it, work closely with the management team to translate of “how to deal with uncertainty” into “how to change uncertainty to certainty and reduce the degree of uncertainty,” as well as what this means in terms of ability to manage risks and enforce governance discipline. It needs to have a culture of innovative leadership that turns the status quo upside down as corporate planning in large organizations may concern more about not disturbing the bureaucracy and keep inertial to change and uncertainty. The belief is in a vision and the board as the top leadership team that inspires change; encourages optimism, and shows confidence and techniques to navigate through uncertainty and steer the organization in the right direction.

Volatility: Digital volatility means change with increasing speed technologically, economically, politically, and environmentally. In the age of digitalization, any business can be at risk for survival at any minute due to the continuous disruptions and rapid changes. With explosive information, the shortened business life cycle, limited resources, and fierce competitions, the business strategy today is no longer a static document sitting on an executive’s desk for years, but a cascading strategy-execution continuum. To improve the board effectiveness, the board’s strategic oversight and performance monitoring should include how to keep track of the digital pulse of the organization. Monitoring the change pulse of the business is to assess the business’s maturity traits such as adaptability, flexibility, resilience, responsiveness, agility, effectiveness, or speed, etc. The change pulse of the organization is synchronous with the pace of digital transformation. The bigger the 'change' (such as digitalization), the more important to keep it on track and take these into account early rather than late. Going digital takes multifaceted management disciplines and structural approach to drilling down the critical success factors that underpin each of the higher level performance dimension. Monitoring digital pulse is the complementary strategic oversight, with the goal to help the company make a smooth shift from doing digital to going digital and being digital.

Information: The abundance of information brings both opportunities and risks for running a digital business. There is good information and bad information, lack of data-based business insight will cause decision ineffectiveness at the board level. Running a real-time digital organization starts by providing real-time information management solutions to conquer the dynamic digital management challenge from the boardroom to the frontline. With “VUCA” digital new normal, to survive the fierce competition and thrive with the long-term business advantage involve more planning, adjustment, and speed. Even the board directors as senior leaders, need to continue learning to keep their knowledge update and their viewpoint fresh. To improve their strategic oversight effectiveness, knowledge is no doubt important, but more than that is complete awareness of what is happening in the context. Once you figure that out, you are able to classify the business elements and know their linkage, leverage the right information, connect divergent factors in the business ecosystem for making strategic oversight effectively.

Don’t be overwhelmed by the sea of information and pervasive digitalization, and don't get limited by the "VUCA" digital new normal. To survive the fierce competition and thrive with the long-term business advantage, high-performing boards can sense emergent opportunities and predict potential risks, oversee the business strategy effectively, monitor the company performance closely; advise business management wisely and setting policies good enough to encourage innovation and lead digitalization effortlessly


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