You can very much speak of ”Last Minute” when it comes to getting boards on the digital journey. Most boards have taken the first steps, but only few have gone full-hearted on board.
Imagine a dog sledge on the way down a slope. It gives great speed to the sledge. However, the dogs need to be faster than the sledge – if they are not, it’s not a pretty sight! This is also the case with disruption. The board of directors and the senior management must be the ones who challenge the company and ask the right questions that bring the company forward.
But in many companies today, that is not the case. An analysis prepared by the headhunter company Odgers Berndtson shows that 62% of CEO’s do not meet digital competencies in their board. And according to an international survey made by PWC, the boards will gradually spend less time on IT strategy in the coming years.
It is worrying when you consider the challenges of disruption, which any business will meet. All boards should incorporate digitization and disruption into the strategic agenda, and the sooner the better. The journey has long begun.
The central task of the board is to understand the global world surrounding the company, which include the threats and the opportunities that may occur. The benefit should be three things, namely to ensure:
Value creation through the business model
A clear, robust and executable strategy
Good, professional and long-term management
These are the goals for the board’s work. And when we look closer at them, it becomes clear why disruption is a topic that can really challenge boards: Do they have people who can understand the global world around the company? Are they the ones who can see the threats of the massive changes and thus ask the sharp questions that can lead to disruption response and strategy? The answer is rarely yes, and therefore the board may be one of the places where the journey into disruption and the world of realizations are the most urgent ones.
Most boards have taken the first step and have started showing interest in the theme. But what should you as a board do in order to actively start the digital journey, so that it will not only be a bullet in a presentation, but a concrete action? The board can start by asking themselves and the management the following five questions:
Where can disruption come from in our market and in which form?
How robust is the current business model?
How robust is the system? Meaning our organization, supplier system, customer relations – in relation to disruption.
What is our response strategy? Do we want to be “first mover” or “fast follower”?
How fit is our organization for this? Where will we meet resistance and what skills are necessary?
In addition, the board members can check how easily (or cumbersome) it is to be a customer. Because that is always the way in for new players.
Management should place its business models under scrutiny. Thus it is not about IT, but about business. It is about accelerated innovation, which will quickly help investigate and test new business models so that you can respond quickly to disruption – or even be disruptive – and thus lift their customers into the future.
Some call it cannibalization, others call it future-proofing.
Understanding your customers better than they understand themselves is the key to success. Insight into the customer’s digital behaviour is increasingly becoming a game changer when it comes to giving customers the unique and personal buying experience.