What happens when your team drives the DeLorean Back to the Future and the board isn’t along for the ride?
The office might boast the latest technology with a staff that is ready and able to grow and change. But if the board is stifled by narrow perspectives and retro thinking, do those other pluses matter?
Digital transformation without digital leadership is like a trip on a hamster wheel—be ready to use a lot of muscle to arrive at nowhere.
.orgCommunity’s recent Innovation Summit was an opportunity to hear executives from across the association world discuss our industry’s future. One of the questions that surfaced was, “How does governance need to change to align with the digital marketplace?”
Several years ago, Kevin Ordonez, .orgSource President and Managing Director, Business Strategy, and I wrote, two books on how to position for success in a disruptive environment. We interviewed both association CEOs and entrepreneurs in the association arena about their strategies for the future. That question was part of every conversation.
There was unanimous agreement that the current association governance structure is not aligned with a volatile and fast-paced business environment. Today, it’s more apparent than ever that a stalled decision-making process and the inability to pivot are invitations to disruption.
Some obstacles to success are easily changed; those are typically problems that don’t involve people. Turning a reactive board into a forward-thinking group of visionaries doesn’t happen overnight. But by taking these steps today, you can begin building effective leadership for a challenging business environment.
Start With Culture
Every board creates its own culture. Both the positives and negatives filter down to new members. Those behaviors are powerful influences on how the group performs. Don’t allow patterns and habits to be haphazard. People learn fastest by modeling others. Set norms for conduct as a group, and make sure that new board members observe effective interactions.
Board development should be an integral part of service. From orientation forward, every meeting should be a learning opportunity. Once it was enough for directors to be at the top of their professional and organizational games. Digital leaders need to move beyond those boundaries. They must be up to date on current business practices and technology across the market.
Open the door to exploration and ideas by Inviting expert speakers to present to your group. Make time on the agenda for robust discussions. And step out of the board room to acquire first-hand experience. Extracurricular activities are not diversions, they are essential for placing the board’s work in a global context and encouraging broad thinking.
It goes without saying, that the board president needs to lead these efforts. Begin establishing a relationship of trust and support with that executive before he or she even arrives at the top spot.
Get Used to Scanning
Digital leaders make assessment an organizational constant. They monitor both their own progress and the operational environment. Individual and group self-evaluations help directors to understand the expectations and measure their performance.
This is a best practice that every board should welcome. CEOs should feel comfortable introducing constructive criticism, even to the reluctant. It is a tool for learning where additional support, guidance, or education are needed.
Use evaluation for both internal and external growth. Along with tracking individual and group progress, effective directors regularly monitor their achievements against strategic benchmarks and scan the macro environment. Dashboards, analytics, and other digital tools can play an important role in this process.
Knowing where you are is important, but an acute understanding of where you need to go is a hallmark of digital thinking. Regularly assess talent and technology needs and prepare for that future. Comparing your organization to groups both inside and outside your industry is a good way to understand your place on a growth continuum.
Build a Brain Trust
A board can be an exciting springboard for innovative ideas or a place where they come to die. It all depends on how you build it.
David Schutt, CEO at SAE Group, transformed that board from “a 1950s representative model” to a small, nimble team of executives selected for their expertise rather than their geographic location. As leaders in the field of developing standards for autonomous vehicles and other new technology, the board needed to represent experts across the industry.
Competency-based boards, that bring together trendsetters in their professions, can be more intellectually challenging to work with. Schutt finds this to be both stimulating and productive for himself and the organization. “I’d rather debate with 12 bright people and lose than work with a board that simply defers to my judgment,” he says.
H. Stephen Lieber former CEO at HIMSS is another advocate for a skill-based structure. When he embarked on a major expansion, HIMSS consolidated several other health care technology organizations under its umbrella. Each of those business units was independent and governed by a separate competency-based board with the expertise to oversee a specialized portfolio of products and services. Lieber explains, “We developed a set of criteria to underpin our governance structure, and subject matter expertise was one of the fundamental skills we required.
“Everything reflected the philosophy of an entrepreneurial organization. Each business unit’s management and boards were held accountable to a distinct set of metrics, whether mission- or margin-driven. The music was the same, but the harmony was different from one business unit to another.”
Creating a board matrix is an effective strategy to ensure that you have the right talent. Outline the demographics, skillsets, and characteristics that will make your board a well-rounded think-tank, then recruit for those qualities.
Of all the steps you can take to strengthen your board, helping the group to understand the role in which they are most effective is the highest priority. The digital world moves too fast to squander precious time on tactics or areas where others have more appropriate expertise.
Board members must be comfortable with vigorous debate, disruptive thinking, and inspiring ideas. Then, they need to step aside and allow the staff to do what they do best.
Gary Shapiro, President, and CEO of the Consumer Technology Association, puts it like this. “The association model is almost fully broken. That’s because it’s composed of thinking that’s very, very old school. The typical board structure is focused on ego, micro-managing, and day-to-day tasks instead of setting clear, objective standards, thinking strategically, and empowering the CEO. Our board does not operate like a typical association board. We treat the board as incredibly important trusted advisors. I seek input when needed. We operate like a start-up company board. We welcome and thrive on change.”
Governance is a work in progress. Changing behavior is built on trust and occurs over time. Each success inspires greater leaps forward. The CEO’s job is to be the first digital leader and to create a consistent vision of the successful future where you want others to join you.
Read profiles of David Schutt, Stephen Lieber, and Gary Shapiro in our book, Association 4.0: Positioning for Success in an Era of Disruption.