Tuesday, June 18, 2019

The Board Director's Digital Profiles X

The board needs to be engaged, and at the most senior levels to help influence and shape the business of the future.

In today’s “VUCA” digital new normal, it is not an easy task to direct the business especially the large business ship to the uncharted water and blurred business territories. Digital leadership is a unique combination of leadership mindsets and behaviors that develop and achieve high quality and meaningful results over a sustained period of time. The modern digital board has many responsibilities, also gets a lot of distractions. It needs to laser focus on the most critical perspectives to steer the business in the right direction.

Synthesist: In the industrial age, businesses are considerably static, with the slower speed of changes, therefore, analytics is a predominant management style to answers the ‘what’ and ‘how’ questions based on business hindsight. The analysis is about breaking down of a complex system into pieces that are small enough to be understood and describes “what is.” With rapid changes and continuous disruptions, the synthesizing view tends to see the full business picture with future timeframe and look at the complex problem as a whole, not just the sum of pieces, tackle the business problem by taking a long term approach. It is about leveraging systems thinking in problem framing and solving, involve not only putting the bits together but blending them in such a way that the emergent whole is somehow more than the sum of its parts. Synthesizing leadership is more future-oriented, intends to perceive “what could be”. A business needs to make money, just as a human needs to respirate, but that is not their purpose. A different living-context may require a different set of values to be adhered to. The synthesizing leadership at the board level would help to oversee the business strategy thoroughly and scrutinize business value from a multidimensional lens.

Global digital agenda setter: Just like the natural ecosystem has provided the impetus to her evolutionary agenda of human mind and consciousness. The digital transformation is now spreading rapidly to enable organizations of all shapes and sizes to reinvent themselves. The corporate board makes a significant transition from a rubber stamp compliance-focused role to the global digital transformation agenda setter. The board directors leverage critical thinking and strategic thinking to gain a better understanding of the digital business ecosystem and help to oversee change and digital transformation. It starts with agenda agreements before moving forward but takes patience and understanding of potential obstacles, differences, and language that translate common meaning. The emergence of potential opportunities and risks for exploring digital is likely to follow a nonlinear pattern with exponential speed. There are a number of common challenges in digital transformation programs, such as getting the right strategies, execution, a good leader to lead the transformational vision, and a broader view of consumer demand, etc. The board directors should provide excellent feedback which gives the top management constructive feedback to improve and clarified opinions to contemplate. They have the advantage of pulling enough resources and pushing the business model of technology, trustworthiness, prepare and launch changes seamlessly.

Risk evaluator: The economic turmoil makes all businesses large or small to rethink their risk management strategy and practices. Organizations have been seeking to improve their ability to define and communicate a clear, consistent, enterprise-wide message about healthy risk appetite, the right risk attitude, and a variety of possible situations and risk management scenarios. There is a growing number of organizations shifted their risk management orientation from bottom-up to top-down, with more senior management and board involvement, to take charge of the risk evaluation and governance. One of the best ways to protect against unknown risks is to think about vulnerabilities rather than trying to predict risk event, and don’t forget to cultivate risk-aware culture. Boards need to master risk intelligence by identifying both business risks and opportunities and focusing on governance effectiveness and risk intelligence. The board can set good guideline to manage risks holistically or in a more integrated fashion for the long run; as financial performance is highly correlated with the level of integration and coordination across risk, control and compliance functions. Value creation opportunities may include but not limited to achieving superior returns from the wise risk investments, as well as accepting and owning the right risks to achieve competitive advantage.

The board needs to be engaged, and at the most senior levels to help influence and shape the business of the future. Digital board directors not only need to be forward-thinking, but they also have to be further looking, think longer term, guide the executive team in the right direction. The effective governance disciplines should complement business management practice in order to navigate transformation confidently and drive change effortlessly.


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