Point of View

Mar 10, 2021

4 min read

The Board’s Role in Navigating Digital Transformations - Joe W. Kelly

Photo by Markus Spiske on Unsplash

With the advent of a wide array of digital technologies driving massive opportunities for value for organizations, many Boards are struggling with how to provide oversight to those efforts. These technologies (artificial intelligence, cognitive and machine learning, blockchain, etc.) provide huge potential in a variety of areas in enabling new business value, improving customer experience, and driving efficiency and safety. In addition, the arrival of these tools is also enabling new competitors to enter traditional markets and push out those who are not investing appropriately.

Many organizations and leadership teams struggle with how to drive these transformational efforts. In some cases, companies are just addressing one area while others are doing long-term strategic efforts to use digital as an enabler to revamp their entire business. All do require some key areas of focus to ensure alignment and progress to capture business value. Three of the key areas are Setting the Strategy, Structuring for Accountability, and Driving the Cultural Change needed to capture and sustain the transformational benefits.

Setting the Strategy

In this phase, management and leadership focus on setting a strategy to drive towards goals that create new business value or models, enhance customer experience, and enhance process effectiveness. Key elements of this effort include:

  • Awareness: In many cases senior leaders will not have enough knowledge of the capabilities; raising the level of understanding will be key.

Board role: Understand how management has focused on business and customer value in digital initiatives.

Structuring for Accountability

In my experience, many organizations struggle with how to measure success and ensure that the investments they are making are paying actual dividends. I have seen this devolve into “1,000 random acts of digital” in the words of one of my clients, when broad challenges go out to figure out how to use digital. Organizations that are successful will focus on a number of critical areas:

  • Structure: Determine the need for a digital function, new organization structures and approach — centers of excellence, federated or unified models.

Board role: Understand how progress and value will be tracked and reviewed on a regular basis.

Driving Cultural Change

From what I have seen, most organizations do struggle with how to embark on this journey, particularly those organizations from more traditional industries and sectors. This new world is one where things evolve quickly, and new approaches and talents are needed to help the company drive value and capture the opportunities. The following are some of the aspects to pay attention to:

  • Talent Supply: To achieve success in digital transformation, talent with new skills is frequently needed. Organizations will either need to invest in training and development or acquire new talent through hiring or acquisitions. This talent will often require different ways of thinking and rewarding to keep them engaged and productive.

Consistency: One of the big challenges for organizations is staying the course of the journey to transformation. Too frequently when times become challenging, organizations will scrap these efforts to save money during times when these efforts are what can set the stage for long term success and business value.

Board role: Review Management’s plans for approaches and policies that drive the behavior change needed to capture and sustain the dividends from digital transformation.