No, I am not talking about making the boardroom digital or its members, even if that constitutes an interesting topic in itself, one for another day perhaps. Here I wish to address the role of digital in the boardroom in terms of digital having a seat at the table.
First, let’s deal with the need.
In the same way that it is recommend to have a digital strategy, see other paper on this very topic, it is advised to make room for digital in the boardroom. This is not because it is the key topic in and off itself. It is due to the current developments and how digital can turn a business upside-down not to mention open up new opportunities. Therefore due to the impact digital can have on a business, it warrants a place in the boardroom.
However, as interesting as it may be, having digital in the boardroom is not the key question.
The real question and in fact challenge, is how to get digital into the boardroom.
A directors responsibility is clear. There are protocols to be followed and documentation to be done. A great deal of time and energy is often placed on the financial standing and results of the business. Approvals, budgets and technicalities, none of which are to be trivialised, as board members have a clear responsibility to shareholders and the public at large.
So much so, many businesses struggle to get the voice of the customer into the boardroom. The very people that are paying the bills. There was a valiant effort in the early 1990’s to achieve this through tools such as Balance Scorecard. So how can digital fair?
Digital is poorly understood by most people and even more so by board members due to their focus and the difficulty is that it is evolving and changing all the time. Unless you are engaged with digital it can be very difficult to grasp it and to get the full picture and those that try find it is a constant moving target. Many board directors provide little more than platitudes towards digital and other directors ignore digital altogether. As a general rule we all know businesses find it very hard to evolve, perhaps this is the order of things and most are destined to be disrupted.
Unless digital finds it way into the boardroom this may well be the outcome for many. For those looking to embrace change as part of their business as opposed to being affected by it, the following are some ways to get started:
- Empower a board member to champion some digital efforts within the business. This will help the learning curve of the board member as well as demonstrate that the business is serious about digital.
- Hire a board member who is responsible to have the voice of digital in the boardroom.
- Have regular strategy sessions where digital is a key consideration. The ideal is to cover all aspects of the business but if that is too much, you can pick key parts such as the product, the market, sales, social change, all with reference to digital and the impact on the business. This helps provide perspective for the business and board members.
- Hire in guest speakers and/or consultants to present and discuss digital.
Which is best?
Like most things, the best solution depends on the business. I have direct personal experience in all 4 of the above. I find it depends mainly on the current knowledge of the business and its culture. The more open minded a business culture, the more likely they are to benefit from using all 4 tactics, at the same time. These are real learning organisations but few really manage this.
Most businesses will go through phases. Generally starting by inviting speakers to get an idea for what it is all about, a sort of inspiration phase. Then moving on to project based, of the strategy variety, with some businesses then implementing the results while others inevitably file it away with their strategy documents for safe keeping rather than implementing. Generally speaking besides the usual platitudes on how important digital is to the business, few make it a core part of the boardroom.
My two cents
I have personally, and still am, involved in one way or another on all of the above four options for a variety of businesses across Europe. I find the greatest barrier to be lack of knowledge and understanding. On the surface digital is straight forward but the reality is that it is difficult to implement and in particular for a business to make it their own. This latter point is crucial for success.
There are few businesses that will hire in a board member to take that responsibility. While I know the board I am on is not unique, and the fact that it is a FinTech may stack the odds in its favour, but still it is not ordinary. It may be ironic that companies that know more about digital, hire those that know about digital. Leaving those boards that know little to, well, learn less. A self perpetuating cycle that runs either positively or negatively, depending on how the business decides to act. Saying that there is no guarantee of success by having digital in the boardroom, hired in or otherwise.
These questions are ones we are come across while working with digital strategy and implementation and find boards struggling with this topic on an almost daily basis. The better we understand how to help boards and the better board members understand digital, the more likely they are to succeed.
So to answer the main challenge posed at the start of this piece, it comes back to the old reliable, Education.
The additional challenge in the case of digital is the lack of understanding which in turn creates a barrier to even start on the journey. Breaking this down is where we all need to spend more time for the betterment of all. This has nothing to do with being charitable but everything to do with helping all our clients understand how digital is impacting them and how to leverage it rather than being leveraged by it.
There is so much already being spent on digital, both time and money, that it is or should be seen as a core competency on a board to understand it. Outsourcing this to third parties or agencies or claiming ignorance is not a solution. Theory in the classroom is one option but we find that working on a specific company’s situation makes it a lot clearer for those concerned. The added benefit is that the business also has a specific plan of action to implement while at the same time being educated.
Digital Scorecard identifies how well a business uses digital along their Customer Journey and where improvements can be made. To discover more about using digital along your Customer Journey as well as an opportunity to get involved click here.