Monday, April 15, 2019

The Corporate Board’s Diagnostic View of Digital Transformation

 There seems to be so much uncertainty in a digital working environment today, riding ahead of the change curve takes vision, strategy, courage, methodology, principles, and practices.

Running a digital business is a change-innovation-problem-solving continuum. Going digital is all about the rapid changes with blurred functional, business, or industrial territories, and expanded organizational horizons. Stability is not equal to stagnation. The corporate board plays a significant role in the oversight of strategy management and digital transformation. Having the diagnostic view at the board level helps the management understand where and how you can and should improve to get the biggest effect and scale up the transformation effort across the digital ecosystem effortlessly.

Diagnose the business performance bottleneck: Digital leaders including board directors today have to check up frequently about the progress of strategy management and business performance. It takes a systematic perspective of understanding business inside-out and outside-in; diagnose key issues and analyze the root cause of business failures or management deficiencies, such as too much paperwork, and too little focus on the concrete deliverable, risk management or real progress tracking, etc. Digital transformation is the large scale changes, but so often the tools or the capabilities that work reasonably well for business improvement have little success in the business transformational effort, and in fact, can be a waste of a valuable resource and a source of frustration. In many organizations, resources management becomes a bottleneck for digital transformation success. Thus, how resource allocation is determined should be understood by all important parties. Thus, a diagnostic view at the board level helps the business management zoom into the significant details for fixing the problems really matter, taking advantage of resources effectively, optimizing cost, and making continuous improvement.

Diagnose the root cause of business stagnation: Digital stability is not equal to stagnation though. Digital enablement is always about planning, funding, designing, building, operating, securing, optimizing and balancing. The board’s diagnose view about business performance and speed helps the management to dig into the root causes of whether the business is slow down due to the silo or bureaucratic management discipline; whether products or services can be delivered on time, on cost and most importantly, on value; whether the management sets the right priority to ensure business effectiveness and performance. The board provides the invaluable pieces of advice to management on how to enforce and follow the “balance” principle which means you need to keep the business running forward with certainty even you have to “rock the boat” accordingly. Strike the right balance between chaos and order; stability and change; “run, grow and transform” accordingly. Running a stable business doesn’t mean to stand still or stagnate; It’s about planning and taking the logical steps for achieving well-defined goals to move forward with predictability. Running a stable digital organization in the digital era is like navigating a ship on the sea, you have to make a timely adjustment for adapting to the changing climate, in order to lead in the right direction.

Diagnose the level of “digital fitness” of the organization: Enterprise digital fitness starts with the purpose, shaped by the strategy and built through practices. The digital fitness is based on strategy competency and execution effectiveness, information fluidity, people satisfaction and wise people investment. For lagging organizations, the ecosystems often have evolved without much attention or planning. Thus, to accelerate change, it’s important to take a deep diagnostic view at the board level, help management understand the current state of the business and identify the strength and weakness of the company so that they can proactively plan, evolve, improve and innovate. At the higher level of organizational maturity, the digital organizations are like the self-adaptive system which is able to re-configure their own structure and change their own behavior during strategy execution with its adaptation to environmental changes and move forward effortlessly.

Accountability and oversight are all part of the game changes that boards must address. There seems to be so much uncertainty in a digital working environment today, riding ahead of the change curve takes vision, strategy, courage, methodology, principles, and practices. The board’s diagnose view based on multiple factors bring wisdom, ‘deep common sense,’ leadership proficiency, strategic viewpoint to improve decision effectiveness and governance maturity.


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