Tuesday, November 19, 2019

Three-Step to Shape a Strategic Corporate Board

The corporate board represents the ownership and they really cannot do a good job if they don't have the knowledge to challenge and set the broad strategic goals and take logical steps in developing a strategic board. 

Digital transformation is all about improving the business flow by dismantling bureaucracy and catalyzing change. Today, the BoDs as the directorial role needs to play an important role in both envisioning and supporting a long-term business vision of organizational development.

Corporate board directors are required to exercise influence over volatility, manage uncertainty, simplify complexity, and resolve ambiguity. Here is the three-step scenario to shape a strategic corporate board.

Setting rules for digital transformation: Leadership or directorship is all about setting directions and inspiring changes; when necessary, break down the old rules, and establish digital principles and landscapes. Digital rules are not some outdated cliches or overly rigid policies to stifle change or innovation. They are statements of belief that reflect the values, culture, and real-world concerns of the organization. It means that the business can enact, revise, and discontinue their business rules as they see fit.

Digital rules encourage mindfulness, authenticity, creativity, inclusiveness, and discourage static thinking, silo, and bureaucracy, The BoDs can help to set guidelines and rules to empower employees at all levels within an organization to unlock their creativity, understand and develop their creative capacity to solve problems, accelerate collective human progress, and explore opportunities in new and innovative ways.

Sharing opportunity oversight: Due to the “VUCA” (Velocity, Uncertainty, Complexity, Ambiguity) characteristics of the digital new normal, organizations have to leverage refined information - the business insight to improve its responsiveness in adaptation to changes. Therefore, today’s digital board needs to become information savvy and IT-friendly. Forward-looking boards have to look into an unknown future and attempt to define the business landscape with its opportunities and risks by seeing beyond what all others could see, sharing opportunity oversight, or work closely with the management team to chart new business revenue or growth through the creation of a new product or market.

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 should they go with a comprehensive analysis in order to make fair judgments and better decisions. Not only do today’s BoDs need to have sufficient knowledge to understand the business ecosystem, but also they should have the business vision to predict the emergent trend of business, technology or industry, so they can guide the executive team toward the right direction and capture business opportunities in a timely manner.

Clear vision and planning help business managers navigate through velocity, uncertainty or ambiguity in a dynamic business environment and internalize changes effectively. The corporate board directors need to have the futuristic view of running a digital business and provide guidance about what core to preserve and what future to stimulate the business progress toward.

Clarifying known unknown: Digital organizations are complex systems, with nonlinear patterns or emergent behaviors. The digital ecosystem is nonlinear and complex, you can't separate things properly or you cannot predict the actual effect of interactions straightforwardly. There are unknown interactions and very high inner dynamics in complexity.

Overcoming complications and managing complexity become one of the biggest challenges in running a high performance digital business today. Senior business leaders including board directors today should realize that there are known unknowns and unknown unknowns, they have to admit that everyone has blind spots, which cannot be ignored, otherwise, they perhaps steer their organization in the wrong direction.

Ignorance of unknown (both known unknown and unknown) is the huge pitfall for decision-making or problem-solving. To overcome fear and build confidence into teams, there should be a credible, rational and benevolent commitment from top down of the organization. It’s critical to collect information and feedback, doing enough homework for planning with necessary adjustment on the way to fit the emerging situation. Perhaps there is no way you can control unknown unknown, but you need to do your best to control known unknown. The corporate board's role is to pull management out of the trees to see the forest; to clarify known unknown, to see the shape of the landscape to come and how it will capture the best picture; to ensure there is a strong context for establishing the tactical choices when the surprises that will invariably show up.

The corporate board represents the ownership and they really cannot do a good job if they don't have the knowledge to challenge and set the broad strategic goals and take logical steps in developing a strategic board. It’s important for the BoDs to learn how to think the systemic wholeness, set the tone of digital transformation in their organizations, and become the mastermind behind the digital transformation.


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