‘Digital transformation’ has been an ongoing theme in business over recent years.
In financial services, for instance, as we explored in a recent blog, digital transformation is a concept which has now become central to a successful business strategy.
It has led to faster, more cost-effective operations; enables firms to meet regulatory deadlines, improved employee and customer experience; and helps them to remain competitive.
From a consumer point of view, digital transformation means that businesses can deliver mobile access and the innovative solutions customers expect.
What is the board’s role in this? How should your board help to drive and deliver your firm’s digital transformation strategy? Here, we explore the steps you should take.
What is digital transformation?
It’s a term that first became popular a few years ago. As an article in Harvard Business Review says, ‘at first it was only applied to large, traditional organizations’ and tended to refer to specific initiatives or projects.
Over time, many firms have realised that isolated initiatives are not enough to survive and thrive in a digital world. Instead, wholesale re-engineering is needed. Transformation doesn’t mean bolting on innovation, or investing in standalone projects. It means an end-to-end rethinking of the way organisations work.
This is echoed by an article on the Quality Deployment website, which claims that ‘True digital transformation will involve the entire organization, and will leave no stone left unturned’.
What role should the board play?
The board, of course, is central to determining corporate strategy and championing projects and investments that deliver it.
If digital transformation is, indeed, a business-wide strategy rather than a technology-led project, it stands to reason that it should be led from the very top of the organisation.
How can you and your fellow directors get behind digital innovation?
- Understand technology and its benefits
As a board, you need to be open to the positive impact of technology. You need to appreciate the benefits of a digital approach and proactively encourage adoption of new technologies throughout the workplace.
Your board needs to be fluent in technology in order to champion it, and have an understanding of the time, resources and investment needed for successful transformation.
- Embrace technology yourselves
Leading by example can be the best way both to understand the issues inherent in a new approach, and to show your support for it.
Unfortunately, though, there’s often a technology gap in the boardroom. This can be in terms of members’ willingness to adopt technology for their own processes, as well as their role as ambassadors for firm-wide innovation.
With ‘the right technology’ cited among the 10 things you need for a successful board, there’s really no excuse for NOT taking a lead here.
- Put in place a culture that supports innovation
What does this mean? It means a culture where everyone works together towards a digital future. It means true buy-in from directors. Your board members need to make quick decisions and be open to a certain amount of risk-taking to capitalise on the opportunities new technology offers.
It means leading from the front, showing the benefits of innovation by adopting digital board solutions, like portal-based technologies for the creation of board packs. Demonstrating the benefits of board technology evidences your directors’ role as technology champions.
Act as digital advocates
The article identifies four categories of directors in digital-forward organisations:
- Digital thinker. A director with little direct interaction with digital but who conceptually understands the environment.
- Digital disruptor. Someone who has been deeply embedded in digital, often with less general management breadth.
- Digital leader. A director with substantial experience running a traditional business that leverages digital in a significant way (retail or media, for example).
- Digital transformer. Someone who has led or participated in a transformation of a traditional business. Typically less senior than a digital leader but more technologically astute.
It reports that although the ‘disruptor’ role is still needed, there is an increase in the appointment of leaders who fall into the ‘transformer’ category.
Within reason, anyone can disrupt – but only a select few have the ability to embed a digital approach into the business and transform it into a long-term cultural change. Ensuring you have the right mix of personalities and perspectives on your board will help you to cultivate a group with the ability to drive forward digital transformation.
Digital is changing the shape of boards
The HBR identified another interesting change.
The push for innovation is encouraging a shift in the make-up of boards, increasing diversity. The article quotes research showing that women account for 58% of the digital nonexecutive directors (NEDs) recently added to boards. Different skills and traits are required in the digital world.
With a recent report suggesting that UK boards were failing to address their lack of diversity, this may be a welcome side-effect of an increasingly digitally-focused approach.
Making the entire board responsible for digital
The HBR article says that ‘digital directors cannot be the only voice on the subject of transformation’. With technology now embedded in most business processes, it’s no longer enough to have dedicated ‘digital’ directors – everyone has to be responsible for digital success.
As the article says, ‘Digital innovation needs to permeate and recast every aspect of the business and the board. Companies that do so will thrive in the new world, and those that do not, sooner or later, will fail’.
The board needs to lead from the front
Adopting a digital approach in the boardroom is a key step in moving your organisation into an era of digital transformation. One way to achieve this is by moving to board portal technology, embracing digital to help you to deliver more professional, user-friendly and more easily-produced board packs.
And if you want to find out more about board portals, and how they could deliver a step forward in your business’s digital transformation journey, you can download our Board Portal FAQs. The FAQs are free, and you can find a copy in our resource library.
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