Directors and Boards Digital Advisory
Digital business lens model enable you to view and design your digital business model with the customer value proposition in mind, considering the changing business landscape (diverse strategic context) and the outcome that your business wants to achieve. The digital era requires board members to better represent and understand the company's digital vision and strategy. Board members are faced with enormous challenges, for example, regulations, executive succession planning, reputation, political environment, governance, tough economic environment, to name a few. The digital disruption is adding to these challenges. Understanding digital technologies and how best to optimize their use across the organization may be a single most difficult task for the board members. Digital technology knowledge and experience at the board table is a must. According to Gottenberg (2017) Digital disruption is an arena most boards have never experienced. The stakes are high and getting higher than ever before, since digital technology is becoming the heart of a company’s overall business strategy and supporting model.
The new digital director
I think the generational gap at the board level has a role to play as well. The newer generation (Gen Y & Z) are more tech savvy compared to the old generation (Gen X etc.). Notwithstanding that board members have lots of market and industry experience in their respective roles. However the digital era may require an additional role, the “new digital director" to the board composition. This is someone who can disrupt the board’s status quo, see the business through digital lens and cultivate the digital vision. Perhaps it would make sense as well for board members to consider, a"board digital adviser”. If the board already have someone fulfilling these roles, then this is great news for the company. The new digital director role can bridge the strategic digital gap (traditional vs. digital) and blend the two cultures, in the process improve customer experience and shareholder expectations. According to Dicciani (2017), having a board member with digital technology expertise will raise the boards collective understanding and appreciation of what digital transformation is all about and why it is necessary to succeed in today’s digital age, particularly if competitors have undergone significant digital transformation to meet and/or create new market demands. In my view for small business enterprises (SME’s) and big corporate, the Chief Information Officer (CIO), Chief Technology Officer (CTO) or Chief Digital Officer (CDO) can be a mediator for the board and the organization. These executive roles can possibly close the digital technology expertise gap. However the challenge will be stretching these executives roles further. CEOs have a tough job in the digital era and should continuously reinforce digital culture across the organization. CEOs need to start thinking of themselves as digital leaders.
A model for digital business
Let’s face it; the new digital entrant’s business models and innovation are disrupting existing markets and creating new ones. For example some business models that are solely based on brick and mortar are slowly becoming irrelevant. Digital technologies make it so much easier for us to shop and transact online. On the other hand some customers still prefer that human interaction. This requires a balancing act to bridge the gap. When assessing company value, the investors are now also interested on the digital vision and strategy of a company. Obviously the financial performance metrics are essential. Does your company have a digital strategy (this is key for new start-ups) or digital transformation strategy for established organizations? The diagram below depicts a model for digital business.
In today’s digital economy, data, algorithms, machine learning or artificial intelligence (AI) and analytics are re-shaping customer experience, enabling businesses to make informed decisions. The digital vision and strategy must be part of the boards agenda. It should be driven from top to bottom, bottom-up and cross-functional. Using this approach all the risks will be identified, understood and mitigated. Briefly the board and top management should collaborate more effectively. In many instances when the term "collaboration" is used, immediately what comes to mind is that teams at the bottom should collaborate. In fact a successful digital business model requires communication and collaboration at all levels of the organisation. The strategic context (changing landscape) needs to be monitored, studied and understood. This will influence the vision and strategy in the right direction. For more details on the changing business landscape, refer to the Navigating-the-changing-landscape blog.
Directors and Management responsibility
The board is responsible to provide checks and balance on management decisions, driving the digital business strategy. Thus the board’s role is essential in ensuring the organization wide management compliance. Equally important, the management role is imperative to building business capabilities that support and execute the business strategy. Successful strategy execution is accomplished through people. Therefore a healthy digital culture must be embedded in the core of the organization. For more analysis and insights on “the model for Digital Business”, please send me your request here: email@example.com
Stay tuned for next topic on digital leadership!