5 Pearls of Wisdom on becoming a Digital Transformation BOARD

I have spent the last few years of my professional life between being the CEO of Laureate Peru – in Higher Education – and the Boardroom. I find that the classroom and the Boardroom have a lot in common. Both have been operating for centuries without any major changes. The teacher and the CEO do most of the talking, the students and the Board members are expected to passively listen and ask questions. The classroom and the Board meetings are scheduled at specific dates and times throughout the year. Interaction between meetings is limited. The curricula (classroom) and the agenda (Boardroom) are set by a third party and are fixed, for the most part, for all participants (students and Board members).

And in both cases, there is huge resistance to change, in contrast with the inevitable transformation of all things due to the Digital Disruption.

With my Education hat on, I’ve been warning the academic community and policy makers about the dangers of not being able to “think outside of the box” about our educational models and policies. About the need to understand the trends driving us towards personalized education, learning anytime – anywhere, on-line collaborative learning, etc. I trust that we will get there. Changes in Education just take their own sweet time.

To the Board I say: “don’t think outside of the box. Think like there is no box”. Time is running out for businesses that are unable to start a journey towards Digital Transformation.

“A journey towards acquiring a set of capabilities and changing a range of processes, functions, models, with the purpose of leveraging the opportunities of the digital technologies and their impact across society in a strategic and prioritized way”

Digital transformation: online guide to digital business transformation:

These are the 5 “pearls of wisdom” that I have for the Boards and Board members that are ready to start on this journey.

  1. Select a CEO with the right DNA

If you don’t have the right CEO, nothing will happen. Having said that, I will advise against hiring a young digital native, because it’s still critical for your CEO to have the leadership competencies that are developed only through experience. In the CEO profile, just add and look for the one trait that can make the difference: Learning Agility.

“People who are learning agile: Seek out experiences to learn from; enjoy complex problems and challenges associated with new experiences because they have an interest in making sense of them; perform better because they incorporate new skills into their repertoire. A person who is learning agile has more lessons, more tools, and more solutions to draw on when faced with new business challenges.” (Hallenbeck, Swisher, and Orr, July 2011)

Learning Agility is a complex set of skills that allows us to learn something in one situation and apply it in a completely different situation. It is about gathering patterns from one context and then using those patterns in a completely new context.

In short, Learning Agility is the ability to learn, adapt, and apply ourselves in constantly morphing conditions.

The 5 Dimensions of Learning Agile Leaders, Kevin Cashman:

On top of the usual CEO competencies, what you need is a CEO that is humble enough to know that he/she doesn’t know everything that is going on, curious enough to explore and build on the possibilities, and bold enough to undertake the required changes in the face of incomplete information and uncertainty.

I’ve been in a situation where the Board dragged their feet when faced with the hard decision of letting go of the CEO. The fact that he had the right attitude and commitment, that there was no specific crisis going on, and that looking for a replacement was not going to be easy, made it hard. But time proved that the change was not only necessary but key to the success of the business.

  1. Take the plunge and immerse yourself in Digital Technology

Most Boards are welcoming young digital natives that can add a different perspective and sense of urgency for digital transformation. That’s good, but not good enough. If the older Board members don’t speak the language, the journey will be one strewn with obstacles and setbacks. Without total alignment and a clear understanding of the scope, the commitment of resources, and the risks involved, the digital transformation is doomed.

“84% of companies fail at Digital Transformation”

The average age of Board members is around 60. They are not necessarily comfortable with digital technologies. But if they want to be part of the journey, Board members need to be open to learning about these new digital technologies and their potential impact on society. They need to understand, really understand, the meaning of Cognitive AI, IoT, the Cloud, Ubiquity, Mobility, Social Networks, Big Data Analytics, Virtual and Augmented Reality, etc.

Board members need to get their hands on every piece of technology available to them, and make them a part of their lives. They need to use their smartphones or tablets -or buy one. They need to shop online, talk to SIRI to make restaurant reservations, manage traffic with WAZE, read books on a Kindle, watch a movie while waiting for a dentist’s appointment, learn “how to” (fill in the blank) on YouTube, and so on. They need to build on those experiences to gain an understanding on the way technology is changing our lives.

I’m a Baby Boomer, so this applies to me. My advice is to turn the struggle with digital technologies into a challenge, and then have fun with it.

And for a Chair of a traditional Board, the first order of business should be to create a WhatsApp group for the members and the CEO.

  1. Help build the pieces of the new puzzle

Digital Transformation is not an IT Project. It’s not a project at all. It doesn’t have a beginning and an end. It does imply implementing projects, but not just the one. In my opinion, Digital Transformation is more like building a new organizational puzzle by putting pieces (smaller projects) into place. You may not know exactly how the puzzle will look like in the end, but it will become clearer as new pieces replace the old ones. The accelerated pace of technology will make it a never-ending journey, as new puzzles will soon emerge.

Digital Transformation is Holistic. It translates into profound and structural changes in the business architecture (functions and processes), and the business model of the whole organization. It requires a change of paradigm on the way we do business. It changes the balance of power as it demands co-creation and strong collaboration with your customers.

The Board needs to be in alignment with the new vision and support the CEO in the process of putting the right pieces of the puzzle, in the right place, at the right time.

The Board needs to continuously gage the risks involved in the digital transformation journey, accept the setbacks and failures as organizational learning experiences, and keep a focus on the long term.

They are many Digital Transformation Consultants, and the Board may be tempted to rest on their expertise to deliver a transformed business. It’s a good idea to have Digital Transformation Consultant(s) as guides, just don’t let them drive and don’t stay on the sidewalk, hop on the bus.

For a Digital Transformation to succeed, the Board needs to be on-board.

  1. It’s about people and culture

“The journey is about acquiring a set of new organizational capabilities”. So, it’s about what your people can do, based on a new set of values and beliefs, a different culture. Don’t underestimate the need for change management as your people are asked to be forward thinkers, customer centric in every decision they make, agile and innovative, and to anticipate and welcome change as the new standard.

“The journey is about changing a range of processes, functions, models.” You must be ready to connect or furthermore destroy the organizational functions (silos) to move towards an unstructured, hyper connected network of individuals and teams that keep changing as needs arise.

This is the hardest challenge for the Board, because it needs to release its focus on what has been its main role for decades, that is, organizational control. In my experience as a Board member, the main topics have been compliance, operational and financial performance and audit reports. The main concern has been to ensure the stability and predictability of the short-term and long-term strategies and objectives. Most of the discussion has been on internal issues and responses to external threats that the business is currently facing or will face momentarily. And on how to enforce a code of conduct & ethics that will prevent a reputational crisis or regulatory non-compliance sanctions.

This is a mindset opposite to the one required for the digital transformation journey.

The biggest challenge for the Board is to change its mindset without losing control. The Board needs to turn its focus outwards to these main topics: customer behavior & expectations, market & industry disruption models, emerging technologies & societal shifts. Their main concerns need to be ensuring that leadership has the right DNA, prioritizing and supporting the changes in functions (silos), processes and models (the new puzzle) and helping and empowering employees to build the road to travel on the journey.

The Board needs to change its role from organization control to organizational agility.

This is easier said than done. The Board will ultimately be held accountable for any major deviation from the plan, for falling short on results, and for any breaches in internal controls and compliance. The slow pace of governments in adapting public policies and regulations to the accelerated pace of change brought on by digital disruption adds to the challenge.

This is where technology can help…

  1. Become a Board that is driven by Smart Data and Intelligent Information

The Digital Transformation Board needs the organization to develop the capability to turn data into intelligent information with speed, quality and security. This capability changes the nature of business decisions, enabling the Business and the Board to make real-time decisions with a higher level of accuracy and effectiveness.

It’s not about managing information for better reporting. It’s about making information an asset at the core of how you do business. Big Data Analytics and Artificial Intelligence are technology enablers, and should not be regarded as a replacement of human responses. These technologies allow us –as humans- to migrate from linear to exponential thinking.

There is a new trend in Education called the Flipped Classroom.

“the group learning space (classroom) moves to the individual learning space (home) and the group space (classroom) is transformed into a dynamic, interactive learning environment where the teacher guides the students as they apply concepts and engage creatively in the subject matter”

The Flipped Learning Network (FLN). (2014) The Four Pillars of F-L-I-P.

I propose a FLIPPED BOARDROOM where all the reporting and information space (Boardroom) moves to the individual space (home/office) and the group space (Boardroom) is transformed into a dynamic, interactive, collaborative discussion environment where the Chair and the CEO guide the Boardroom members as they examine intelligent information to derive business insights, and engage creatively in the opportunities and challenges at hand.

Resistance should be expected as this new model demands a significant increase in time dedicated by Board members outside meetings to go through the information provided in an ongoing way (real time). It demands that Board members do their “homework” if they are to contribute in group discussions with their peers at Board meetings. And, for them to understand the strategy behind the digital transformation journey of the business, it demands stepping out of the comfort zone into a mindset of curiosity and learning about digital technologies and their impact across society.

On the other hand, the Flipped Boardroom will result in a more engaging, stimulating and enriched experience for the Board members, as they become co-creators of a new vision and business model.

“No industry is immune to digital disruption”

Boards play a key role on making sure that their business become the industry disruptor instead of the industry disrupted.

And for that they need to become a Digital Transformation Board.

Mariana Rodriguez Risco

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