Why is the board essential to digital transformation success?

Globe‘Digital transformation’ has been a theme of business for the past few years.

Today’s consumers pretty much expect a digital experience. 

If you want to stay relevant and competitive, you need to put mobile access and innovative solutions at the top of your priority list.

Here we look at why the board is crucial to the success of your transformation efforts – and what you can do to deliver your objectives.

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 it tended to refer to specific initiatives or projects.

Over time, many firms have come to realise that it’s not isolated initiatives that are needed to survive and thrive in a digital world, but wholesale re-engineering. 

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’.

The role of the board in digital success

This reinforces the view that digital is pervasive and all-encompassing – and as such needs to be led from the very top of the organisation. 

For a successful approach, your board need to understand technology and the benefits it can deliver to the business. There is often a technology gap in the boardroom – both in terms of members’ willingness to adopt technology for their own processes, and their role as ambassadors for firm-wide innovation. 

A recent article in ComputerWeekly on the benefits of embracing innovation suggests three questions you can ask to assess how ready your board is for transformation:

Is the board open to discussing technology?

Your directors need to be open-minded when it comes to technology. They need to appreciate the benefits of a digital approach and proactively encourage adoption of new technologies throughout the workplace.

Do your directors understand technology?

Your board needs to be fluent in technology in order to champion it. Members need to understand the time, resources and investment needed for successful innovation.

Is there a digital culture at a board level?

What does this mean? It means a culture of collaboration, where everyone is working together towards a digital future. It means true buy-in from directors. They need to make quick decisions and be open to a certain amount of risk-taking to capitalise on the fast-paced high-tech environment.

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.

Are your directors digital advocates?

Being able to count on the board as promoters of digital is far from a given. The Harvard Business Review reports that only 27% of executives believe their directors act as advocates for the firm’s digital strategies.

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. Disruption is one thing, but the ability to embed a digital approach into the business and transform it into a long-term cultural change is a different skill.

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.

With a female perspective identified as the secret weapon behind some of the best boards, this could help you in more than just innovating. Making sure you have the right mix of perspectives among your directors is vital for rounded decision-making.

The whole board has a responsibility 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. Driving transformation is something the whole board is accountable for. Directors who marry business sense and customer understanding with technological acumen are essential.

As the Harvard Business Review 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 learn from the front

Showing a willingness to take a digital approach in the boardroom is a sure-fire way of evidencing your commitment to transformation. A board portal is a user-friendly way to employ online innovation for your own benefit, saving money and time, and delivering more professional, more easily-accessed board papers.

You can read more about the benefits of board portals – and the ease of taking a portal-based approach – in our whitepaper, Board portals – what’s in it for directors? It’s free to download here.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.

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