Part 2: A few easy steps
“Boards that are digitally savvy outperform (their non-savvy counterparts),” shared Aliza Knox in a recent online general membership meeting of the Management Association of the Philippines (MAP). Knox is Non Executive Director, Grant Thornton International Ltd.
Numbers don’t lie.
Knox cites from a 2017 MIT Sloan Center for Information Systems Research, analysis of companies with 6 or more directors with annual revenues of over US$1B. It’s a 34% difference for both ROA and 3-year Market Cap Growth. A healthy 17% difference in Profit Margin, but a whopping 38% difference in Revenue Growth over 3 years.
Very simple starter steps can steer Boards towards a state of being digital savvy.
Again, it’s a change in mindset. Boards need to understand what about being digital should be the focus.
1. Topics discussed in Board meetings are a tell-all. Digital savvy Board need to discuss immediate, and extended issues that include:
1.1 Cybersecurity (how to keep client accounts and privacy safe and secure);
1.2. Disruptions and Innovators (understanding the digital environment, knowing who the players are, and what are the elements in the scene that can change the business); 1.3. Transformation (what is the company’s online presence, is it friendly, easily accessible); and
1.4. Tech spending (knowing what to spend on, and what’s on the immediate pipeline).
2. Board Members, the personalities that compose the Board must be remarkably diverse. Consider age and gender, where youth and experience can mix well with established and experience. Digital is technology, so a Technology, Sustainability expert, or Data analyst would be wise considerations.
Another would be to invite an Indie whose background or external POVs might prove insightful.
It is also good consideration to constantly study the composition and diversity and effect beneficial change as necessary.
3. Tech Fluency is emphasized as staying connected. Learn from the company technologist, stay abreast of your digital posts, from the people in the company. Read a lot, and pay attention to trends. PayMaya, TikTok are not the latest Disney characters. And, AI and IoT are not hip-hop stars.
Where PayMaya disrupted normal payment transactions and banking functions by simplifying online payments, and giving power to those without credit, TikTok 'shookt' the internet via a throng of bored youth during the early lockdown—and eventually cause POTUS to sever ties from its Chinese makers.
A digitally paying public is hand-held by secure, reliable and accessible online payment methods. Thus, a sparkling and robust eCommerce community is another trend digital savvy Boards must be able to take advantage of.
Changing business models go beyond eComm and online payments. Freebies (freemiums), loyalty rewards, streaming and on-demand, are only a handful of the current disruptions that are making a killing.
Knox makes a strong case for Boards to make the crucial leap, saying, “I hope I was able to communicate that there’s a real financial value in having a digitally savvy Board. There are a lot of concrete actions to take to both digitize Board tools, and digitize the Board’s thinking to make management teams future ready.”