- Company board members with developed digital skills are twice as likely to significantly grow revenue compared to less savvy colleagues.
- Despite digital’s potential to transform bottom lines, digital’s place in the boardroom often remains fragmented and ill-defined.
- Rather than relying on a single digital ambassador, companies should look to baking a digital-first mindset into the organisation’s DNA.
The company board has always steered an organisation’s direction, made strategic decisions and drawn on experience and expertise to offer guidance and advice. The online revolution, however, has created new ways of doing business – which means that building profitable customer relationships is next to impossible without leadership that can understand and leverage the power of technology and new paradigms.
A clear case for digital leadership
In October 2015, PwC’s Digital IQ Survey highlighted the powerful financial imperative for investing in executives that bring digital expertise to the table.
The report discovered that companies whose executive teams were engaged in digital issues and those that established a clear digital strategy were twice as likely to achieve rapid revenue growth than those that lagged. And digital investment is intended to pay dividends, with 45% of leaders saying revenue boost is their top priority, while 25% aim to use digital primarily to build a better customer experience.
As yet, businesses have not uniformly allocated the C-suite title that champions their digital efforts. The greatest proportion (40%) say their digital efforts are led by the CIO, followed by 14% that say it is the CDO. Duties of the role may also be fragmented across those and other roles.
The question is, how does digital leadership play out in the wider context of the executive team? How can businesses form the right balance of leadership experience, technological know-how and digital nous to build an effective board?
Here to stay
Although businesses are wising up to the realities of digital disruption, there’s also been a dangerous tendency to treat digital expertise as a quick fix.
Often, recruiting digital experts to the board – without considering whether they have management or leadership experience, or a background in strategy or a skill set that’s compatible with a board’s traditional makeup – is down to the mistaken assumption that digital knowledge itself will be the catalyst for good business decisions.
Shipping in digital expertise is increasingly a band-aid solution that fails to realise that technology is simply an enabler of digital disruption – it isn’t disruption itself. The person that leads this transformation must have the ability to carry it through from the perspective of people change… and that takes strong leadership skills.
Being ‘digital’ is also about being able to operate in new paradigms, which is why there should be representation on the board from people that understand innovative, agile ways of working.
Digital board member or a digital board?
The most successful company boards are those who take a digital-first approach to working and hire directors whose skills are complementary to that – while staying true to a board’s core DNA.
Rather than implement a ‘digital strategy’, the key is to have a business strategy that’s fit to operate in the modern world. Likewise, when it comes to assembling a board, it’s not about adding a ‘digital person’ into the existing mix and treating it like a job done. It’s about composing or growing a pool of skills that are fit to navigate the digital context we now operate in.
A great board, like a great business, is only as strong as the sum of its parts.
Article has been edited in length, full article available at PricewaterhouseCoopers here.