Saturday, August 31, 2019

What’s Inside the BoD’s Tool Box

The board directors who are equipped with a set of powerful tools have the advantage of communicating effectively and deciding wisely.

Due to the “VUCA” characteristics -complexity, uncertainty, ambiguity and velocity of the digital era, the directorship in any organization becomes more critical and challenging. The purpose of the governing body, or board of directors, is to direct the organization in the right direction, practice governance discipline, and monitor its performance. Corporate governance is to make sure that management is doing its job properly. The corporate board needs to shift from reactive to active and proactive mode for adapting to the dynamic business environment with continuous disruptions. To improve the directorship effectiveness, what’re supposed to be inside the board of directors’ toolbox to enforce its governance discipline?

SWOT Analysis:
We live in an era full of uncertainty, velocity, rapid changes and exponential growth of information, the result is a higher risk of conflict and inertia, etc. Decision makers including corporate board directors need effective tools to help them navigate between the rocks of analysis-paralysis, foresight-hindsight, and blind guesswork. the business strengths and weaknesses need an evaluation in order to have a decision-making ground. SWOT (Strength, Weakness, Opportunity, Threat) Analysis is a good tool which provides a starting point to scrutinize strategy and helps to take a wide look around at what's going on outside the organization and how it might affect the organization (an environmental scan), and identify opportunities and threats. It also helps to take a hard look at what's going on inside the organization, including its strengths and weaknesses. By adding the Trends, you're asking the organization to look at what's happening now and what's coming down the pike so that they can be proactive in preparing for it. How effective the tool is depends on the SWOT users, do they ask the right questions, and answer them via multidimensional lenses, and understand them in context by zooming into the future more clearly.

Business Architecture: Business Architecture is more than a "hint of the business process," but an effective communication tool at the higher level. The business architecture could become a great executive communication tool, particularly when the architecture discussion is kept at a higher level and keep all executives at the same page by walking through the discussion about strategy planning, governance, transformation, etc. The board of directors with an architect’s mindset can translate the abstract concept back into the real world example. Thus, it also has the ‘visual’ ability to “see” an idea and express it in visual terms via interactive way. The real value of business architecture is how to keep the priorities in balance and make the sound judgment without losing the big picture. The board of directors who can speak architectural dialect is able to facilitate the digital dialogues between organizational decision makers and thereby assist the organization in continuously designing and redesigning itself in pursuit of new and more viable strategies, enhancing cross-functional business coordination, developing knowledge and expertise, and enforcing business responsibility.

Balanced scorecard: The well designed balanced scorecard with well-selected metrics can harness information-based communication at the board level. A balanced scorecard is very useful to provide a “balanced” view of tradeoff variables for facilitating discussions and ensure decision makers understanding the various trade-offs and making the strategic balance, business dependencies, and constraints between components, individuals, and overall risk exposure. A balanced scorecard helps the board capture the holistic picture, make sure that the strategy execution is on track. It enables feedback & learning, as well as adjusting the strategy accordingly. They can become more confident and accurately judge the coming curves and obstacles on the path, and get into actions in a creative, positive and proactive way, to lead the digital transformation journey smoothly.

At today's business dynamic with digitalization and globalization trend, the top leadership team such as board directors who are equipped with a set of powerful tools have the advantage of communicating effectively, deciding wisely, and pulling enough resources and pushing the business to reach the next level of digital maturity.


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