I was recently challenged by a long standing board member about the 'tough, provocative' language I was using to describe the urgent need for boards to get up to speed with things digital. Why is the need to be competent an uncomfortable truth?
Well you're probably privately squirming a little if you're part of the approximately 80% of boards world-wide that do not have technology-savvy board members. And if you're from an accounting or legal background you're probably even less comfortable with my assertion that directors from all technical disciplines - finance, legal, marketing and HR - need to have awareness, preferably knowledge and skill in their area of board governance, as it relates to technology. An increasing number of industry and academic reports suggest that bottom-line results improve when senior leaders, including boards, become tech-savvy.
I tried to explain to my colleague, that in a digital economy where technology permeates pretty much every aspect of modern business the director’s changing role is largely driven off the disrupting, business model changing opportunities and risks associated with technology.
Why the urgent, provocative tone?
I’m even more convinced that the evidence is irrefutable. Boards must understand their role in digital leadership. The numbers speak for themselves. Here's just one example.
An excellent report from MITSloan and Capgemini provides the numbers.
Let’s face it, if it ticks at the top, it ticks at the bottom.
Digital leaders shape and share a vision of a new future relevant to the era. They create the governance systems, processes and business relationships - internal and external - to help steer the organization through technology-based change, unavoidable in this digital era.
When organisations of any type, size or industry get two aspects of their technology oversight right at executive and board level and competently lead and govern the strategic use of information and technology i.e., digital intensity, and lead the organisation’s change capability i.e., transformation intensity – they out-perform the competition.
Digital intensity is the technology-enabled initiatives and investments that will change how the company operates including how they engage with customers and other key stakeholders; how business technology can improve internal operations, and opportunities and innovation that might lead to new business models.
Transformation intensity is the organization’s leadership capability to drive digital transformation across the organization.
Get these two leadership dimensions right, and revenue, profit and market value performance can significantly out-strip the competition.
The bottom line? If you’re in a leadership role be that board or senior executive, you must be leading technology. Don’t let technology lead you.
The CIO: a possible source of update and up-skill for boards?
I recently spoke about the CIO's role in relation to boards at the CIO Summit in Auckland, New Zealand. Here's a short videoclip with some thoughts.
CIO Magazine article
The latest edition of CIO Mag (NZ/Australia) features my research and offers opinions from practitioners about the role of the CIO and boards. Click here