Digital boards are not a consideration for most companies. For many, a digital leader, sometimes attached to the company board, represents the full extent of a business’s digital advisory investment.
However, times are changing, and businesses must change with them to remain competitive. In the last two decades, we’ve seen game-changing advances in technology, a process that was only accelerated by the pandemic and is maintaining momentum. Undeterred by inflation, Gartner expects 2022 global IT spending to grow by 3% from last year, bringing the total forecasted annual spend to an enormous $4.5 trillion (£3.8 trillion).
The key take-away here is that, as we progress further into the 21st century, digital strategy and investment is becoming an increasingly central part of the business world. Leadership cannot banish IT departments to back rooms any more, to perform updates, troubleshoot, execute back-ups, and keep to themselves the rest of the time.
We firmly belong to an era where developing digital strategy must be treated as an integral element of business planning. Digital leaders now need to be at the directors’ table.
Introducing Digital Boards
Introducing a digital board is an effective approach to ensure that digital projects receive adequate business consideration. A digital board can either be made up of internal digital leaders exclusively, or the board could also hold external members. Digital consultants or specialists who have been brought in for specific projects or digital transformations are two examples of potential external board members.
The overarching goal of all digital boards is to devise and execute a business’s digital strategy in conjunction with the wider business’s goals, budgets and plans. The functional role of digital boards can flex to suit each organisation but we like to break the board’s operational process down into four pillars: constant evaluation of digital product development and USPs, product strategy and digital roadmap assessment, evaluation of digital market trends, digital product competitiveness and target screening, and the introduction of an expert-driven innovation incubator.
Alongside this, the digital competencies of the organisation are constantly being developed, and digital teams are being built up step by step by the digital board to ensure long-term success.
In practice, strategy can vary but the overall purpose of a digital board is to ensure that digital projects are going according to plan, achieving digital KPIs and that they are the right steps for the organisation. Importantly, each digital board should have one or two leaders that are able to sit on the wider corporate directors board or, at minimum, consult with the company board.
Why Digital Boards Are Needed
By having a seat at the table with the corporate directors, digital board leaders are able to introduce key digital expertise to boards that often sorely lack the adequate relevant knowledge to execute business plans with solid integrated digital tactics.
With the digital world innovating and scaling at such a fast pace, senior leaders rarely have the time or capacity to adequately educate themselves on digital innovation and trends. Perhaps more concerning than this, many senior business leaders don’t even know that they lack any necessary digital expertise.
In a 2022 Salesforce survey of more than 23,000 workers across 19 countries, 54% of senior leadership respondents considered themselves to have the digital skills necessary today. However, less than half of the managers and individual employee respondents agreed.
There is a clear digital skills and knowledge gap, exacerbated by the fact that many senior leadership figures don’t know what they don’t know. A digital board would free senior leaders from straining to keep on top of every tech trend, whilst ensuring that they are still executing a digitally savvy business strategy.
Adding Value in a Market Downturn
As we face a market downturn, companies with digital boards have experts on-hand to consult to guide those vital decisions on how they invest their budget into tech. Ideally, a digital board will be able to offer a balanced perspective and weigh the company’s current offering and financial status with their expert understanding of the value of ongoing or planned digital projects, relative to the business’s current economic situation.
Crucially, digital boards are also able to advise how technology can be leveraged to get ahead in a market downturn. This year, PWC’s Pulse survey found that 60% of executives believe digital transformation to be a key growth driver and targeted digital transformation can deliver a real competitive advantage. For instance, automating processes can permanently reduce the cost of doing business, and augmenting or automating activities with technology like AI could similarly reduce labour costs.
While competitors may pause their digital investments until they feel more economically secure, taking the decision to build upon your digital offering internally and externally can help you to retain staff amid a skills crisis and draw in new customers. Assuming that there is a budget available, ensuring that your board is keeping on top of your digital projects can be a great way to get ahead during a time of economic uncertainty. A digital board will help in leading a company board through this process.
Though digital boards are not yet considered a priority at most organisations, every company stands to benefit from one. The world has become inescapably digital, and those unable to change with the times will be left behind. Digital advisory boards offer a simple way for businesses to keep up with a changing world, and position themselves for success in a digital future.
By Dr. Stefan Sambol, Co-Founder and Partner, OMMAX.