Thursday, August 19, 2021

Innovative Board Practices to Unlock Potential

The corporate board in a high-level leadership position plays a crucial role in strategy oversight, business advising, and monitoring.

Governance is steering. The higher the complexity of the organization and the dynamic of the environment in which it operates, the higher the requirement for governance disciplines to shape differentiated organizational capability, unlock performance, and generate multifaceted business value.

Capability underpins business strategy, capacity enables business growth, potentiality unlocks future performance. The corporate board’s strategic oversight is critical to identify and strengthen the weakest link in strategy management and ensure the business success for the long run.

Corporate boards help to identify enterprise performance deficiencies and assess business capability maturity: Capabilities directly decide the overall organization’s competency and build a long-term winning position. Thus, the corporate board’s oversight of strategy management includes identifying capability patterns of the company and evaluating the overall maturity of the business capability portfolio. The capability view from the corporate board questions whether and how a business capability perspective adds value to drive transformative changes or implement business strategy, discover their business’s innate strength or weak spots, and estimate the success rate of strategy execution.

The business ecosystem is complex and informative, every organization must chart its own course, and take an integrated approach to build dynamic business planning and actions, as well as developing modular business capabilities which can be recombined into differentiated competency with much shorter building cycles to accelerate business performance. Corporate boards take the praise or blame depending largely on their abilities to influence the business outcomes. Thus, they should work closely with the management to set up business priorities, divest non-core capabilities, free up resources that can be used to and deepen core business capabilities in order to build up the sustainable business advantage for the long run.

Corporate boards examine business capacity planning and management to ensure continuous business growth and improvement:
Due to the “VUCA” new normal, planning and forecasting become challenging, and planning fallacy is a business reality. Capacity planning needs to be part of the corporate initiatives around continuous improvement and integral component of strategy management. A quality capacity planning program will enable the business to switch to a proactive mode and bring you in control when experiencing high velocity and uncertainty. The corporate board's oversight of the strategic planning has a positive correlation with the degree of uncertainty and unpredictability, improve organizational capacity management effectiveness by keeping the process transparent, enforcing accountability at all levels, and focusing on long term strategy management, to ensure the business capacity plans are in line with the corporate direction to achieve the well-defined business goals.

The degree of planning creates liaison and business partnership, figure out what the business needs, share unique business insight as to what capacity can provide, retool management to model powerful collaboration. In business reality, everyday functional executives are battling their corner for resources, funds, and sometimes recognition. High performance corporate boards balance the diverse viewpoints, take a wider look around at what’s going on inside and outside the organization and how it might affect the organization, as well as identify opportunities and threats accordingly. It helps the management gain a big picture of what’s going on so that they can justify the capacity planning properly to make sure that decisions are taken somewhat more impartially to ensure the business as a whole is running in an optimal way.

Corporate boards scrutinize the business potentiality and improve business investment decision effectiveness:
Potentiality includes the overall ability to perform in the future either individually or at the business level. Corporate boards monitor performance and influence business transformation. Performance keeps the business moving, and the potential makes the business grow and mature. A high potential organization can make coherent use of various already known concepts and gradually open up to the best and next practices to grow, innovate, and transform their company. The corporate board’s scrutinization of business potentiality is important as often performance and potentiality need to be managed cohesively, identifying and developing potentiality into a more solid form and transforming it into differentiated business advantage. Sometimes, you even need to leverage different tradeoffs, retreating today’s performance a step back in order to unlock potential and accelerate the future performance.

Unleashing business potential is a strategic effort which is worth the effort of the corporate board. They scrutinize their organizational potential by making inquiries such as: How well does the organization continue to perform and grow in their industry, are they leaders or laggards? What are the strengths and differentiated business competency? How responsive can they act? How likely is it for them to take on new challenges with learning agility, build dynamic business capabilities to explore new market shares, drive transformative changes, and grow into next-level organizational maturity? Etc. With the board’s attention, the potentiality is the worthy investment and hidden dimension to explore the emerging opportunities, design new business models, and investigate hidden paths for accelerating business growth.

Different organizations have different strengths, capacities, and capabilities and they need to take their unique path at their own pace to stretch their strength and build a cohesive set of business competencies. The corporate board in a high-level leadership position plays a crucial role in strategy oversight, business advising, and monitoring. Effective business oversight and governance practices require a strong commitment to being knowledgeable, independent, and forward-thinking for ensuring business running in the right directions and reaching well-set destinations smoothly.


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