It is clear that digital transformation increases the scope of boards’ mandate opening up new capabilities for competition and risks. While many board members understand the importance of technology to keep the current business models viable and competitive while creating new income streams, they also struggle to determine how best they can add value to their organizations. Many know the importance of digital transformation but don’t know how well they can capture it to add value.
According to Russell Haworth, digital thought leader Board advisor and CEO, the complexity of technology can make board members feel like they are always playing catch up but rising to the challenge is necessary in today’s digital world. Although digital literacy is a major problem in many boards, asking the following questions can ensure that even the most non-digital members are focused on digital transformation.
Does The Board Know The Implications Of Digital Transformation Well?
Improving the board’s digital understanding is not about turning the members into proficient technologists but making them understand the implications of technology on the business and its revenue. For instance, when artificial intelligence is thoughtfully implemented in an organization, it can leap over standard delivery times, cost, and quality.
Incorporating technological trends in bits of applicability and maturity such as process automation, virtualization, and distributed IT infrastructure means that the board has to navigate potential impacts on the company.
One solution to navigate tech illiteracy is to put boards through intensive training from top technologists to shift mindsets on digital transformation. Also, boards can take a more strategic view when hiring by reviewing how their target hire’s experience in digital transformation matches the firm’s digital strategy.
Is Digital Transformation Creating Value?
One of the primary roles of boards is to manage a company’s leadership on scaling and value creation. In most companies, the digital aspirations are not swift, but the covid 19 pandemic is proof that businesses can take giant leaps in digital transformation when pressed.
Also, boards should push the management to understand the sources of competitive advantage and how digital transformation leverages these sources of revenue. And lastly, long-term focus is vital because digital transformation may cost a lot while promising returns that won’t come until much later.
Does The Board Know How Digital Transformation Is Working For The Company?
Digital transformation can be complex, mainly because it tells you very little whether it is working initially. Therefore, boards should begin with a shared understanding of the digital transformation strategy and that the company understands every part of its core business model to determine where the value is. The most important thing is for boards to focus on the transformation and let the digital aspect take care of itself.
Does The Board Have A Good View Of Talent?
The need to recruit more executives familiar with digital transformation is unavoidable. The top executive hires in a company should have good background knowledge of technology for the digital transformation roadmap.
The Bottom Line
The pressures of digital transformation continue to increase, so boards have a critical role in guiding their organizations. Addressing these questions can help boards achieve digital changes in their companies.