Sunday, January 20, 2019

Five Trends to Shape Up the Digital Board

The corporate board takes tremendous responsibilities for steering the business ship through uncharted water, and move forward in the right direction.

Businesses large or small across the industrial sectors are on the long journey of the digital transformation. Metaphorically, the company is like a ship, the sea is the ecosystem environment, the old world is the past, and the new digital world is the future. The corporate board takes tremendous responsibilities for steering the business ship through uncharted water, so you don't have any choices but to change your sails to move forward in the right direction. The path for digital transformation can be iterative, evolutionary, revolutionary, or disruptive, can you predict the future trends and catch the upcoming tides, shape up the digital board for leading change confidently?

Spur creative tension: The contemporary BoDs as the top directorial role oversee business strategies, advise top executives about varying business issues, monitor organizational performance, and set cultural tones for changes. In the boardroom, there is a balancing act between collegiality and challenge; performance and compliance; innovation and standardization, etc. No challenge is one problem; overbearing interventions is another. The board understands the fine line between management and governance. Many board directors are top seasoned business executives, besides functional expertise, high-performance boards are composed of all sorts of digital thinkers: critical thinker, creative thinker, systems thinker, holistic thinker, integral thinker, etc. They would complement each other’s thought processes to improve decision effectiveness and lift up leadership maturity. The digital era upon us is about innovation and people-centricity. The spirit of the business comes from the top. Being an innovative board director means you need to break down silo thinking, breakthrough conventional wisdom, and if necessary, challenge the status quo. That is not easy for many top seasoned board directors who have decades of experience and enriched knowledge in certain areas, but it’s imperative for dealing with “VUCA” digital new normal. Uncertainty per se is not a problem, it poses a risk for those who have a fixed mindset and creates opportunities for those with a growth mindset. You can feel creative tension in the boardroom when you sense the openness to embrace the diverse viewpoint, the harmony not via compliance only, but through idea sharing and intellectual collaboration.

Advance cognitive diversity: Cognition is a perception, sensation, and insight. Boards need to have qualified candidates who bring identity and cognitive diversity to a boardroom, to provide a perspective that goes beyond the gaps in board discussion. Anyone who is selected to sit on a corporate board should be fully qualified in varying leadership arena such as strategy development, functional expertise, risk & crisis management, information & technology, entrepreneurship, global empathy, or international experiences, etc, in order to bring fresh insight to mind the cognitive gap. The historic focus on easy-to-measure aspects of diversity (ethnicity, gender, age, etc.) might be too superficial or even wrong-headed because more often, such skin level difference is nothing to do with a cognitive difference -- how people think and approach the problems. Cognition reorganizes parts of one’s belief system and thoughts navigate within one’s present belief system as it is. Thus, perception is personal and insight is precious. A high-performance board should have cognitive differences and diversified worldviews to bridge gaps, make sound judgments, and improve leadership maturity. Further, the board directors are often the leaders of leaders, they should even concern about metacognition - thinking of thinking, for digging into the root causes of problems, and determining which competencies or capabilities should be used in which combinations, and with what level of weight for each, for every different situation, in order to improve governance effectiveness and digital leadership influence.

Dare to be holistic: Holistic thinking has a correlation with systems thinking which is the thought process for seeing interrelationships rather than isolated things, for seeing patterns of change rather than static “snapshots,” for seeing the long-term transformation rather than the short-term transaction. “Being holistic” suggests a genuine sense of exploration and innovation. With the huge pressures from corporate shareholders, it takes both courage and knowledge to be holistic from the boardroom to the corporate floor. The BoD needs to gain a deeper and holistic understanding of the enterprise in order to be a credible actor in the strategic dialogue. In terms of a holistic 'viewpoint,’ one does often need to integrate different stereotyped or 'mechanistic' viewpoints, make the cross-box connections, in order to shape a holistic view. Digital transformation is the journey for solving problems caused by "conflict," "out of balance," “information overloading,” “lack of logic.” Therefore, it is critical to apply a holistic approach which can break through the industrial constraints and limitations and in pursuit of possibilities rather than impossibilities. Digital means flow, hyper-connectivity, and interdependence. Holistic thinking is important to understand, frame, and solve today’s multilayer, interdependent, and over-complex business problems with less side effect and bigger impact.

Candor and control: Digital organizations today are always on and always connected. The hyperconnected nature of the digital business makes everything so transparent, business reputation and brand are based on those interconnected elements from process and technology to leadership and employees, from the boardroom to the front desk. “Thought candor” is offering a different way of thinking about a situation or problem that fills the blind spots and moves the strategic conversation forward at the boardroom. The directorship in any organization must be able to adapt to changes, build abilities to advise, inspire and motivate, leverage candor and diplomacy; opportunity and risk; logic and creativity; confidence and humility; analysis and synthesis; stability and dynamism, etc. Risk oversight is the critical responsibility of the board. Evaluate and control risks and conduct scenario planning when necessary. Controlling at the board level is truly about setting the right policies and making updated rules for leading changes and driving digital transformation.

Maximize change impact: With change as digital new normal, every business leader needs to become the change leader including board directors. There is the distinction between types of organizational change - incremental and transformative, the board should focus on transformative changes by pulling business in the same direction and maximize change impact for ensuring the long term prosperity. The board directors need to be the “mastermind” behind the digital transformation, evaluation, analysis, and strategic or long-term planning should top the list in the digital board’s agenda. Many disruptive opportunities are brought to the business with new thinking on how to monetize them. The business lifecycle could be viewed as resulting in emergent means of reorganizing, refocusing, rebalancing resources, and redirecting people to understand the whole, in terms of its inner processes, its interactions with external systems, its components, the specific interaction among them, etc, to ultimately achieve the seamless digital flow, high performance business results, and high-level digital maturity. A change agent board has the advantage of pulling enough resources and pushing the business model of technology, trustworthiness, prepare and launch change, innovation to maximize change impact.

The digital paradigm means holism, hyperconnectivity, interdependence, and integration. It is the power of BoDs as dynamic leaders to predict and capture the trends, ride change waves, drive business transformation with digital dynamism and amplify digital leadership influence with discipline.


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