Monday, July 19, 2021

Prescriptive Board

The best prediction is an optimal foundation to make a logical prescriptive formula, if there’s any, to improve organizational manageability and maturity.

Information exponentiality and continuous disruptions are the new normal. Many of today’s business problems are complex, and the future is the most difficult problem of our era. Corporate boards at the most senior levels need to become a predictive problem-definer and a prescriptive problem solver at the strategic level, rather than being descriptive or reactive only. 

They should have a good understanding of the organization's strategic direction and its strategic alternatives by looking into an unknown future and attempting to define the landscape with its risks and opportunities. They need to guide the senior management team through effective questioning, coaching, advising, to help influence and shape the business of the future deliberately.

“Real-time” board leadership is not always on, but about practicing information savvy decision-making and enhancing “on-time, on-schedule, on-value” leadership influence: Improving decision quality is about reducing the uncertainties of the most variable elements; and estimates of future consequences of choosing various alternatives. Better data allows leaders at all levels to understand where they stand and what is required as a team to enhance leadership maturity in lieu of the remaining status quo. The corporate board’s decision oversight based on quality information in the real time helps them identify and close decision blind spots, pinpoint decision fatigue, and oversee the decision management processes to improve decision maturity.

It is nevertheless true that change itself has become unpredictable and evolutionary, business leaders today can’t predict every turn or curve on the journey. Information is a key enabler to help you achieve strategic business objectives. Analytics in real-time coupled with a powerful rules engine poses a challenge to the market with the prize being people-centricity. Each member of the C team was asked to present his/her prospected use of analytics and the data sources. The board then mapped the input over the strategies and decided on the initiatives to pursue. They become proactive, predictive, and prescriptive via practicing on-time, on-schedule, and on-value leadership disciplines.

The board directors should become interactive and prescriptive change agents that represent the organization, stockholders, and senior management to steer business in a progressive direction: Corporate change can be a simple modification of strategy, a business process improvement or a more radical digital transformation. Change leadership at the board level is important because change management is an interdependent ecosystem that includes many business factors such as, the company goals, policies, internal control requirements, etc. Corporate boards set policies/guidelines and culture tones to advocate change and drive desired behaviors, instead of putting restrictions on what people should do. Their change prescriptive- rules on how to evolve system dynamics, some kind of philosophy, may be implicit or explicit or somewhere in between.

In most cases, organizations are not in a good position to leap directly to a mature team structure and supporting policies and culture. The philosophical foundation will identify key aspects of human nature that must be served - things being talked around. "Good prescriptive" change management would be well grounded and ideally, with really best principles and practices. The underlying philosophy includes choices on management themes, such as hierarchy versus flat-organization, change-management style. "Prescriptive" change advice from the boardroom includes incremental recommendations to the management team as they build experience and deliver results consistently.

Corporate board directors leaders can practice "prescriptive” risk oversight as well as interdictive leadership discipline as preventing the problem is more superior to fixing issues:
We live in an era, full of uncertainty, velocity, complexity, and ambiguity. Though people believe that by default most humans are rational, many studies show that humans are "Predictably Irrational." The result is higher risks of conflict and inertia. Risks are simply potential problems. It is supposed to be one of the main principles for problem management. The major source of limitation in any risk management is because of the (knowledge) risk of the unknown. Assuming that in any risk management program, all the known and potential risks would have been covered and managed. Self-checks in the boardroom for any biases can improve their decision effectiveness. The cool-headed directors should ask insightful questions to spot risk management blind spots because the greatest risk will be a real business/reputation issue that is not being properly identified and managed.

A “prescriptive” board with risk intelligence can make the organization more resilient, not by controlling risk, but by setting guidelines and enforcing risk management disciplines. Perhaps no corporate board is capable of defining all of the current needs, foreseeing all of the future events, drawing artistic realization about the best future, but by mapping and measuring complex interactions in real-time can gain early warning (anticipatory awareness) of possible/plausible negative impact. Senior leadership is neither equal to seniority nor the big title; at the board level, it implies the high level of intellectual and emotional maturity. From board level to front-line, how to enhance risk intelligence culture will enable business growth by predicting the future and capturing opportunities and ensure bottom-line surviving by practicing interdictive leadership cohesively.

The digital BoDs’ challenge is how you move the ‘needle’ forward, and really accelerate your organization’s digital transformation. Great governance is in relation to vision, mission, principles, standards etc. The prediction of the future is based on the analysis of the past. The best prediction is an optimal foundation to make a logical prescriptive formula, if there’s any, to improve organizational manageability and maturity.


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