Thursday, June 18, 2020

The Corporate BoD's Strategic Oversight

The corporate board of directors should take an outlier's lens to criticize the business strategy by questioning wisely and bringing up fresh perspectives continually.

The modern digital board has many responsibilities, and also gets a lot of distractions. The corporate board’s strategic oversight is crucial to identify and strengthen the weakest link in strategy management, laser focus on the most critical perspectives to steer the business in the right direction, and ensure business success in the long run.

Communication Oversight: Communication is the word that means many things to many people and initiates a broad set of activities. In essence, communications are the tools to solve problems, and languages are the tools to make communications. Communication, whether verbal, non-verbal, or digital, is the coordination mechanism that makes organizations possible and makes a group of people as a cohesive team to achieve well-set goals collaboratively. Organizations are social realities that emerge from the communication patterns of people. The corporate board’s oversight of communication strategy and methodology with clarity directly impacts the business effectiveness and maturity, enhances a robust corporate brand, and develops a solid reputation.

In practice, one of the miscommunication symptoms is a misinterpretation, which is often caused by a lack of contextual understanding, pre-conceptual judgment, random assumptions, prejudices, misinformation, or simply lack of deeper understanding, etc. Communication gaps and bottlenecks further cause decision-ineffectiveness and change inertia. The corporate board’s communication oversight helps to foster a healthy working environment where invaluable feedback and vital communication are based on information, trust, and reality to foster collaboration and drive performance.

Decision Oversight: Both businesses and the world become over-complex, hyper-connected, extremely uncertain and ambiguous than ever, the effectiveness of strategic decision making has to weigh in multiple factors and needs to search for profound business insight. Better data allows leaders at all levels to understand where they stand and what is required as a team to enhance business operations in lieu of the remaining status quo. The corporate board’s decision oversight helps the business management identify and close decision blind spots, pinpoint decision fatigue, and oversee the decision management processes to improve decision maturity.

Information and decision-making are intimately connected and interdependent. There are many variables in complex decision making, there are trade-offs you have to leverage, and there is no magic formula to follow. The corporate board’s decision oversight focuses on setting scientific principles and methods for improving the decision competency of the corporation, verifying the integrity of the system prior to trusting decisions emanating from it, and ensuring the right people having the right information to make the right decisions timely and consistently.

IT Oversight: IT plays an important role in interpreting business issues into a technology solution and build IT-enabled business competency. IT leaders should convey a data-based presentation to the board and top executive teams in looking and appreciating IT strategic value to the businesses. Contemporary corporate boards today are informative and technology savvy. The board’s oversight of IT management and information-driven innovation agenda helps to highlight the strategic perspective of IT and improve its differentiated business value, directly impact business growth and organizational competency for the long run

The art and science of Information Management are to optimize its usage, achieve business value, develop long term business competency and viability. In fact, IT becomes a decisive factor in the business’s long-term prosperity. The corporate board's oversight of information-driven innovation agenda will directly impact business growth and organizational competency in the long run. The digital ecosystem is so information-intensive and technology-driven. It seems that the industry sector is already an outdated concept. The IT-savvy corporate board has a great impact on the business ecosystem woven by information technologies nowadays. When board directors or senior leaders have sufficient knowledge and understanding of IT, they can make a sound judgment about IT investment and know-how to assess IT performance objectively.

Talent Oversight: Digital is the age of people, people are always the most invaluable human asset and capital in any business, but one of the weakest links. The traditional talent management practices are often outdated due to the fast pace of changes and continuous digital disruptions. The businesses must be alert to the digital dynamic environment, and the digital corporate board will help to set the principles, innovate talent management, and embrace digital fitness, advocate the culture of accountability. adapt their workforce planning and development strategies to ensure their digital workforce is highly engaged, innovative, and transformative, to unleash collective potential.

The digitalization has erased the line between business brand and talent brand, as they are two sides of the same coin now. The digital workforce in organizations today is multi-generational, multicultural, and multitasking. They are innovative workers, hard workers, knowledge workers, and intelligent workers. It’s a strategic imperative for top board leaders and talent managers to see talent from different angles, forecast talent demand, and embrace futuristic trends. The goal of talent oversight in the board level is to advocate the digital culture, shape the digital workforce and workplace in the way people can relate to themselves and to their experience of their environment and others around them, their voice can be heard and their contribution can be recognized, and their talent can be maximized.

Investment Oversight: All business investments and meaningful business activities should strive to build tangible business capabilities to achieve ultimate business goals. There are both opportunities and risks for every investment. The business executives have to apply systems thinking to make an objective assessment of their investment portfolio for achieving high ROIs. The BoDs should wear the venture capitalist’s mindset, work closely with business executives, to oversee portfolios of investments, continually evaluate individual and aggregate investments in terms of value, risk, and reward, to ensure the organizations are on the right track to reach their vision.

The corporate board oversees the strategy, sets the priority to stay focused, identifies promising big ideas for investment that will accelerate bold change, and continues to prioritize and adjust the strategy, to leverage growth potential. Visibility into each investment is established to provide ongoing investment health information as well as enable understanding overall portfolio health.

The corporate board of directors should take an outlier's lens to criticize the business strategy by questioning wisely and bringing up fresh perspectives continually. Doing this will definitely pay huge dividends. Their strategic oversight helps the top management identify blind spots, clarify priority, and avoid pitfalls on the way of strategy development and implementation.


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