In a world of rapid changes, great boards are heterogeneous, inquisitive, intelligent, and innovative.
In fact, the corporate board’s oversight of following critical issues will directly impact business growth and organizational competency for the long run.
Quality of strategy: Corporate boards oversee business strategy. All strategies are intents - it’s about creating tomorrow's organization out of today. Due to the increasing pace of changes, many strategic plans lose viability during their expected window of opportunity. A good strategy is informative and cascading; needs to keep evolving, become actionable with dynamic planning. A capability-based strategy has a much higher success rate. Thus, the corporate board’s strategic oversight is critical to identify and strengthen the weakest link and determine practicality; working with the management to clarify what you are able to accomplish and what it will take to expand the differentiated capabilities. Their strategy review 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 the organizational growth potential.
Companies across the vertical sectors are at the different stages of the business life cycle, some are nimble enough to rise above the learning cycle and keep developing and delivering impressive solutions to gain marketing advantage; but many run down a diminishing returns pathway, becoming irrelevant gradually. The board’s strategy oversight helps businesses focus on their sustainable long term vision by asking: Is your strategy granular about where to compete and how to take a step-wise approach to implement? What is the cost point to be competitive? Which capabilities already exist and which must be developed or changed? What's the performance/cost ratio of your strategic investment portfolio? What’s the historical lessons learned and what are the best practices in the industries? What’s your core competency to stand out as a strong brand or niche player? Etc. The quality of the strategy is based on the quality of strategy makers and overseers. A good strategy enables the organization to diagnose their critical problems, set good choices, and take wise actions to achieve high performance results.
Management credibility: Management is about the coordination of the activities of a business in order to achieve defined objectives. The business world has shifted from industrial age to information age, now toward the digital era with abundant information. Thus, business management also needs to shift from linear, reductionistic top-down command and control style toward a holistic, agiler, and credible management discipline with a more transparent, persuasive coaching style. Management is both art and science. The scientific part of management helps to set guidelines, structure, and methods to achieve business effectiveness and efficiency, to produce solutions in a problem domain repeatedly. Management has become an art out of necessity to deal with many soft issues such as communication, culture, address the current business relationship between the employee and improve the organizational brand to attract and retain talented people. Corporate boards as the most significant governance body set good policies to encourage desired changes, optimized management processes to improve business reputation, management credibility and maturity.
Business will be more successful when they realize that one of their greatest strengths will be their abilities to deal with “VUCA” business new normal, and assign resources/talent/time scientifically to maximize business performance. Visibility into each business investment/initiative is established to provide ongoing quality information as well as enable understanding overall portfolio health. The BoDs should work closely with business executives, 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 under promise, over-delivery, and reach their vision on-time and on-value.
Innovativeness: It takes a few business initiatives to do innovation; but being innovative is a state of mind- which means, in a corporate setting, you need to nurture a culture of creativity, encourage staff to always be skeptical of conventional wisdom, and break down the “we always do things like that” mentality. Corporate boards as one of the top leadership pillars should set the tone for practicing open-minded leadership, make commitment to support innovation initiatives, set the right risk-taking appetite, create the space for cross-boundary dialogue and debate, create the necessity and motivation for innovation to blossom. In practice, they assess some crucial success factors of innovation such as, the corporate innovation principle/creative atmosphere, the speed of decision-making, resource allocation effectiveness/efficiency; the altitude of innovation impact and the aptitude to manage innovation; innovation process maturity, etc.
Being able to engage in successful innovations is very hard work and does include a good strategy. Hence, the board’s innovation strategy scrutinization helps to identify innovation management bottlenecks, de-bureaucratize processes, derisk innovation implementation, establish clear proofs-of-concept before making the investment to launch and scale, tie innovations and the innovative culture to the organization's strategy and scale innovation effect systematically. innovation management performance. Innovation is just too important to delegate to the management without boards’ oversight. The BoD as innovation monitors and mentors are a devoted team aligning corporate strategy with shareholder expectations and ensures that innovations will be supported by management and by all stakeholders.
In a world of rapid changes, great boards are heterogeneous, inquisitive, intelligent, and innovative. They make a better influence on improving strategic decision effectiveness over volatility, managing uncertainty, simplifying complexity, and resolving ambiguity in guiding the organization toward the right direction and bring profound insight in transforming the business up to the next level of business maturity. Leadership is an influence to lead change progressively and a capacity to influence others through vision birthed by a conviction of a sense of purpose. The Board of Directors as top leadership roles should have multi-intelligent wisdom, to envision and lead the organization towards its future confidently.
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