Monday, December 10, 2018

The Digital Boardroom Dilemmas

The digital board needs to be able to create the cohesive vision, a holistic view, and transform from compliance-centric to performance-driven; short-term oriented to long-term focus.

Corporate board as one of the most important top leadership teams plays a significant role in overseeing strategies, leading changes and driving digital transformation. The real boardroom dilemma is that driving the business forward is extremely difficult. That means looking into an unknown future and attempting to define the landscape with risks and opportunities. The digital directors today need to understand things and circumstance in a holistic way, ask themselves and others with deep questions, to ensure they can deal with leadership dilemmas and handle digital new normal wisely.

When shall you push a gas pedal, when should put your foot on the brake pad? Due to the “VUCA” (Velocity, Uncertainty, Complexity, Ambiguity) characteristics of the digital new normal, digital organization has to leverage refined information - the business insight to improve its responsiveness in adaptation to changes. Today’s digital board needs to become information savvy and IT-friendly. Forward-looking board has to look into an unknown future and attempt to define the business landscape with its risks and opportunities. The BoDs must begin thinking about ways with strategic planning to broaden their ecosystem viewpoint by capturing emerging trends, making information-based decisions, monitoring digital performance, and setting tones for digital transformation. To navigate the corporate ship in the right direction at today’s business dynamic, board directors should know when to push the gas pedal for accelerating changes; when should they put their feet on the brake pad for adjusting the speed. There is the reason for having the brake pad, not for stopping the ship, but for ensuring it is running steadfastly. Many think that companies don’t fail, boards do. To run a high-performance and high-innovative organization, risk avoidance is not sufficient, the corporate board today needs to be risk aware and risk intelligent. They need to ask tough questions, for instance: Who was responsible for feeding 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 to the board? How to identify blind spots or cognitive gaps in improving decision effectiveness. It’s the board’s collective leadership competency for setting the right tones for changes and harmonize digital transformation.

Which digital principles must be enforced? And which rules are worth breaking? Digital transformation has to be expanded in every dimension and information needs to permeate into underlying organizational structures and functions. Leadership or directorship is about setting directions and inspiring changes; when necessary, break down the old rules, and establish digital principles and landscapes. There are quite many organizations out there that have a plethora of policies and many of them are nothing more than that, just a policy. There are good rules and bad rules, visible rules and hidden rules, local rules or global rules. Rules are often domain specific and time relevant, so perhaps there’s no rule which can “rule” the world all the time. And rules need to be updated continually because often the outdated rules become the roadblocks to stifle innovation and business or societal progress. The new “rules” get updated to reflect the new age, adapt to the new speed, and fit for the new perspectives. The board of directors plays a critical role in setting policies and principles for changes and digital transformation, accelerate business performance, and improving organizational maturity. The dilemma of the board needs to figure out which rule is outdated, need to be eliminated; which rule needs to be enforced, and how to make good policies? Digital leaders need to observe, perceive, and pay attention to the myriad of internal and external, visible and invisible, hard and soft forces that define and influence the way we do business these days. The great digital directors are rule-breakers, as well as the rule- makers.

When shall you go with intuition, and when shall you do analytics? The board assess strategies and monitor performance. BoDs spend significant time making strategic decisions. The high performing board shows the ability and openness to "question itself and its decisions/discussions." Many board directors are top seasoned leaders with decades of experience, some of them are also visionaries. They should know when to take the gut-feeling, and when shall they go with a comprehensive analysis in order to make fair judgments and better decisions. Both intuition and analytics have the role to play in making wise decisions, There are many considerations in leveraging "thinking fast and slow." Sometimes there is no time for analysis. Sometimes key data is not available. Sometimes the intuition plays so well before you are able to explain the logic; and the other times, you just have to break down the big problems to solve them piece by piece via carefully reasoning. As the top leadership role and crucial corporate guardian, the board needs to make the smart leverage, ask deep questions, collect reliable information, articulate logic, filter out bias, and perceive the consequences. They need to embrace the well-defined principles, fine-tuned processes and well-adopted practices in making wise decisions all the way.

The level of the board accomplishment may vary but the essential competencies will remain the same, BoDs need to be insightful, influential, strategic, and highly effective for dealing with these decision dilemmas wisely as well as overcoming leadership obstacles and pitfalls proactively. The digital board needs to be able to create the cohesive vision, a holistic view, and transform from compliance-centric to performance-driven; short-term oriented to long-term focus.


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