The Tech-Savvy Board: Risk, Strategy and the Competitive Edge
Growth is the cornerstone of corporate strategy. It is imperative for Boards of Directors to work collaboratively as a team to bring all strategic growth opportunities to the table. In today’s rapidly changing world, where growth is intimately linked with technology with technology enabled growth the norm versus the exception, the BOD team needs technology expertise among its members.
With this in mind, I sat down with Janice Giannini. She is an outside director and management consultant.
Why is technology literacy so important for directors today?
Technology literacy in this context does not mean that board members are detailed technocrats who can explain the most esoteric concepts. Being technologically literate means it is part of your DNA—you are so comfortable with it that it’s simply another critical element of growth strategy.
Directors today are focused more than ever on their fiduciary responsibility, corporate growth, maintaining an acceptable risk appetite, and financial returns. Historically, technology has been viewed by many only as a risk; with insufficient understanding at many levels of the true power of technology to expand into current and adjacent markets. If you accept the premise that Directors’ priorities are fiduciary accountability, growth, acceptable risk appetite, and returns, then without an understanding of one of the most significant powerhouses that drive growth (technology), the Board and executives are essentially going into the “marketplace ring” with one hand tied behind their backs. Why would you choose to do that?
Why not simply rely on the CIO or an outside consultant?
CIOs balance many roles and activities. They are part of the strategy team as well as the technologist charged with execution excellence. Frequently, their peers on the executive team are no more familiar with technology-enabled growth than the Board. To fully realize the potential, the company must have an integrated plan across all functions and business areas. It is difficult to have this conversation if the CIO is the only one who understands it. In addition, in the absence of some level of understanding, the environment is rife for piecemeal solutions and finger pointing when business break-downs occur. Outside consultants can bring an evaluation of different technologies and potential upside and downside to the table. However, there should be a strategic conversation that connects the technology conversation with the business specifics. Outside consultants brought in on a project basis do not always understand the business in context—nor should they. The Board really needs to understand the consequences, both intended and unintended, of their decisions.
But our job is strategy, not technology!
In the past, common practice was to develop the strategy and then figure out how to implement it via a technology solution if appropriate. Today, the technology is integral to the development of the strategy. It is not one first then the other. They must co-exist—reinforcing each other to attain corporate goals. Recent technology changes have opened up business opportunities that were not even considered a few years ago. Today, it’s about understanding what business you are really in, and doing that requires a technology-literate conversation.
Technology people are not strategic business thinkers, it’s either or
There are many technology people who do not have a firm grasp of running a business and the choices, decisions, and overall risks that need to be managed. That is true. Just as there are many financial, operations, and sales executives who do not have a fully integrated view of running a business. But there are outside Directors and qualified individuals with deep roots in technology whodo understand how to run businesses because they have done so. A director with expertise in technology, profit/loss, product development, after-market support, and manufacturing would be an ideal candidate for many Boards to help bridge this urgent gap.
If you are not uncomfortable, you may not be doing your job
The nature of global competition mandates that executives and directors work outside their comfort zone, especially if they are to grow and meet the current and future challenges. In part, that means shifting the composition of the Board to a more diverse experience base, emphasizing technology literacy over the more traditional predominance of CEOs without a strong technology background.
What will it take to affect this shift?
Too often, corporations wait until the eleventh hour to make the needed shifts. Recognize that your global competitors are already doing this and that if we wait too long, the US will be behind the curve. Embracing a new order is urgent!
Any last bit of wisdom for directors?
Diverse teams come up with stronger solutions than homogenous teams—we’ve all experienced that. There is power in an array of thought, skills, and experience. . Ask any CEO, and they will tell you they strive for that diversity at all levels of their organization. It’s time to embrace that at the Board level as well. If it’s good enough for everybody else, why not the Board?
Tracy E. Houston, M.A. president of Board Resource Services, is a board advisory consultant and executive coach headquartered in the Denver area. She conducts board evaluations and assists boards with a variety of issues that increase effectiveness. She can be reached at email@example.com or http://www.eboardmember.com
www.eboardmember.com ;eBooks: www.amazon.com/author/www.eboardguru.com
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