IT or digital capability on your Board or governing group (Part 3). The how.

By Mark Nicholls, Partner, Information Professionals
Considering what options you have in order to add more IT or digital capability to your board? Great! If you haven’t had a chance, read our earlier article describing what capabilities you might need, and whether they might be a priority for your organisation/s. We also introduce the difference between the general IT skills and specialist skills of interest to Board Directors.  
digital strategy
Here, we define four approaches you can take for adding the capabilities you’ve identified.  None of them are mutually exclusive so you should mix and match them to suit.  

At times, multiple approaches may be necessary, as it may not be possible to have one person or one way that provides the right capabilities now and into the future. Some of these are better suited to building the general skills introduced in our last article, and some are more relevant to the specific or transient topics that can come and go in prominence from time to time.


The first option to consider is hiring Directors with the Digital/ICT capability who can inject their unique perspectives into your Boardroom.  As covered in our first article, this should not be at the cost of the corporate governance skills that all of your Directors should have.  You should focus firstly on the general IT/digital skills listed in our last article. If you feel you have these covered, then you could also consider specialist IT skills that your organisation will be focusing on over the coming years. 
The benefit of hiring is that there is no better learning than on the job learning. So having someone with good IT/digital skills can bring insights and perspectives that can help your entire Board to lift their own capabilities in this area. If you choose well, you may get someone willing to spend some time outside of the boardroom with your other Directors, to accelerate their learning.  This is a good step to building long term capability in your Boardroom.  Remember though, that depending on your Board culture, and the size of your Board, having one person on their own to quickly change the perspective of your Board, may be asking too much. 

The next option is the active development of your existing skills.  There are multiple ways of doing this.  On the job learning is one way through increased dialogue and discussion at the Board table, and increased discussion and information papers or presentations from the executive team.  As already mentioned, having Directors with more IT/digital savviness can help uplift everyone, either through Board discussions or discussions outside the Boardroom.
Additionally, there are significant opportunities for external training and education.  The AICD is one such body with increasing amounts of IT/digital education for Directors. Another option is coaching and mentoring for some Directors. If you have strong skills on your Executive team then building opportunities for high value contact time between specific Directors and Executive can be helpful. 
Skills development should be adopted by all Directors, as part of their continuous learning. And there is no better area to invest time than in IT/digital, given its changing landscape.

 
The third option is to extend the Board’s consideration of important or challenging matters through Board Committees or Advisory Boards.  This will be organisation specific, as one topic could be challenging for one organisation, but easy to deal with for a different organisation. 

This approach gives you flexibility to involve Directors (due to their special knowledge or interest, or to support their growth), Executive (due to their role, special knowledge, or to support their growth) and external advisors or experts.
 
Sometimes Boards may use Committees or Advisory Boards to assess candidates for future Board vacancies.  For those Directors or Chairs concerned about whether bringing in IT/digital skills means sacrificing basic corporate governance skills, then this could be a good testing ground.
Where you have existing Board Committees (eg Risk Management, Remuneration etc), it is prudent to consider how the IT/digital landscape may change their scope and role.  And in doing so, do they have the skills and capabilities to deliberate on this expanded scope.  For example:
  • Does your Risk Management/Audit Committees also cover Security/Privacy? How would this change the operation, make-up, reporting?
  • Does your Nominations/Remuneration Committees also cover IT/digital skill needs and recruitment/retention strategies? Have you got the skills on that committee to understand current and emerging needs in this area?
 
 

The final option to consider is consultancy or advisory input.  This could be used to accelerate the improvement in general IT/digital skills across the Board.  

It could also be used for specific topics that may be of interest from time to time.  It could take the form of research and discussion papers, presentations, hosted discussions, and guest presentations.  




About the Author:

Mark Nicholls, Managing Director, InformProsMark Nicholls is the Managing Director and a Partner with Information Professionals Group (IPG). He formed IPG in 2005, after a career of delivering software development and business transformation programs in the telecommunications, transport and government sectors in Australia and overseas including the United States.  

Mark leads IPG’s Programs, Projects and Change Practice.  He is a highly skilled program manager and adviser, specialised in leading, managing and advising organisations on the delivery of ICT, digital and business transformation.  

An active industry participant, Mark was elected to the QLD Council of the Australian Information Industries Association (AIIA) in 2013, was appointed as Chair in 2014 and to the Board of Directors in 2015.  

Mark is the inaugural Chair of the Qld Digital Economy Industry Collaboration Group, involving a range of industry groups that are supporting their constituents in the adoption of digital business.

Business Strategy vs. ICT Strategy vs. Digital Strategy.

Business Strategies have been around for a long time.  ICT Strategies less so.  But the new kid on the block is the Digital Strategy.  What is it, and how does it differ from the first two.
The Oxford Dictionary has two primary meanings associated with Strategy.  The first is below.  The second has a military context.  This is understandable as many management concepts still in use today originated from the military.
Definition of Strategy: a plan of action designed to achieve a long-term or overall aim.  Definition
It makes sense that a Business Strategy is therefore a plan of action designed to achieve a long-term or overall aim for a business, or an organisation.  Their names may vary from Business Strategy to Corporate Strategy, Organisational Strategy or something else.  However, most of us know what these look like even if their name may vary.  It is usually developed, or at least lead by the Chief Executive, and it may have extensive input from the Board.
An ICT Strategy can take a number of forms.  In many organisations it is a response to the needs of the Business Strategy.  That is, it defines the ICT plan of action designed to achieve the ICT related aims of the business.  It is usually developed by the Chief Information Officer (CIO) or an equivalent role.  The Chief Executive is often consulted and involved to varying degrees depending on the organisation and on the Chief Executive.  The Board could also be involved, although in my experience it is rare for most Boards in Australia to play an active role in the preparation of an ICT Strategy.
In my view, this approach to the development of strategy has been a big weakness for many organisations.  It is based on a flawed assumption.  And that assumption is that ICT can only form an output from Business Strategy.  By definition, that means that ICT is not a useful input into Business Strategy.  This is flawed thinking, and has been for many years.  ICT has the potential to impact on Business Strategy.  And this effect is becoming more pronounced with each passing year.  For instance ICT innovations are allowing new entrants to enter existing markets, the creation of brand new markets and the creation of new business models and industry structures.  ICT is changing our expectations (as clients and potential clients) for how we interact with organisations.  If you have any doubt, you would know that you and most of your friends use ICT daily to buy, consume or research various products and services.  If you still have doubts, read Marc Andreessen’s article, Why Software Is Eating The World.  I have put some direct quotes from this article below.
Despite this flawed assumption, Business and ICT Strategies have largely been developed in this way for many years.  In more recent times, and perhaps for only the past five years, the Digital Strategy has come along.  It primarily came out of marketing departments who realised that there were more digital marketing and advertising options that they were having to consider.  But beyond that, they also realised that customers wanted to interact with their companies in multiple ways, including digital and online ways.  In some cases they also saw their own market share being eroded by these new entrants that were capitalising on Digital approaches to doing business, and these Digital approaches were being very successful.
Hence we have seen the rise of the Digital Strategy.  While its development may be lead by the Marketing Department, it is increasingly becoming of major interest to Chief Executives and Boards.  There have been enough company failures caused through being blindsided by Digitally enabled alternatives that it is worth them taking a keen interest.  This also means that the Digital Strategy is taking on a broader view, not just a marketing view but a broader strategic view of the organisation, and considering things such as industry structures, competitor behaviour, organisational capabilities, organisational structures, and many aspects of an organisation’s business strategy.
This evolution of the Digital Strategy is now becoming what the ICT Strategy could have been, and perhaps in some rare cases, has always been.  The Digital Strategy is now becoming an input into the broader strategic view of the organisation, helping to inform the Board and Executive team, and providing an input into the entire organisation’s strategy.
A word of warning: Be careful assuming that the above descriptions apply in every organisation though.  In some cases ICT and Business Strategy formation does happen in concert with each other, but this is rare.  And in some cases a Digital Strategy remains a marketing only view although this is becoming less common as a broader view evolves of what a Digital Strategy should be.
Can all three strategies sit side by side?  The easy answer is yes.  But over time, it is natural that they could merge.  For instance, would Amazon or Google or Netflix or Apple or Skype have a Digital Strategy and a Business Strategy.  I cant say for sure, but I don’t believe that they would think of strategy in two separate domains in this way.  In most organisations, it will be useful to have a Digital Strategy.  It will introduce new ideas and concepts and challenge the existing organisation and hopefully have a positive impact on the overall strategy for the business.

Overall, the emergence of the Digital Strategy having a whole of organisation view, and even taking an industry and marketplace view, is a good thing.  It helps organisations to see the opportunity and risk that is in front of them.  The view of many commentators is that eventually every company will have to become a technology company or they will no longer be around.  If that is true then the sooner you start this evolution the better off you will be.  And if a Digital Strategy helps get you started then that is great news.

Business Strategy
Digital Strategy
ICT Strategy
Developed by the Board and Chief Executive
Always
Increasingly
Rarely
Strategy Development is Lead By
CEO and Board
Was Marketing, Increasingly CEO & Board
CIO
Implications for every aspect of an organisations
Always
Increasingly
Rarely
Considers Client and Market Needs
Always
Always
Rarely
Considers Industry and Competitor Behaviour
Always
Increasingly
Rarely
Considers new technology opportunities
Rarely
Increasingly
Always

Article Written By: Mark Nicholls.

Managing Director, Information Professionals. 
Mark is one of Australia’s most trusted IT Change Management advisors. He also has other entrepreneurial business interests that he operates through MaidenVoyages.

 If you liked this blog check out our other material at Informpros.com.au

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Excerpts from “Why Software Is Eating The World” (WSJ OP )
  • More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense.
  • The world’s largest bookseller, Amazon, is a software company
  • Largest video service by number of subscribers is a software company: Netflix
  • The most dominant music companies are software companies: Apple’s iTunes, Spotify and Pandora
  • The fastest growing entertainment companies are videogame makers—again, software.
  • And the fastest growing major videogame company is Zynga (maker of games including FarmVille), which delivers its games entirely online.
  • The best new movie production company in many decades, Pixar, was a software company. Disney—Disney!—had to buy Pixar, a software company, to remain relevant in animated movies.
  • Photography, of course, was eaten by software long ago. It’s virtually impossible to buy a mobile phone that doesn’t include a software-powered camera, and photos are uploaded automatically to the Internet for permanent archiving and global sharing. Companies like Shutterfly, Snapfish and Flickr have stepped into Kodak’s place.
  • Today’s largest direct marketing platform is a software company—Google.
  • Today’s fastest growing telecom company is Skype, a software company
  • LinkedIn is today’s fastest growing recruiting company. 
  • If you still need convincing or want to read more, read the entire article.

What ever happened to e- ?

What ever happened to e- ? You remember don’t you?

The time when everything that had some technology element to it was referred to as e-something…. e-enabled, e-business, e-reader, e-marketing.
How time moves on. We rarely see this now. Not only the technology develops, but I suggest the terminology moves even faster. Along with the popularity of the iPhone was the i-everything but that is now not fashionable either.

I was at an Australian Institute of Company Directors event this evening. It was on Digital Strategy, the impact that technology was having on business, on competitors, on industry structure, on internal risk management and a multitude of other critical business impacts. But No, it was not about these, or at least not all of them. It covered some of this ground but not all. It covered, what used to be called e-marketing or perhaps what we could call Digital (Marketing) Strategy.

This is an important area. Social media, marketing, employee engagement, customer intelligence are all critical. But there is more to the impact of technology than this.

My fellow colleagues at the event asked two questions in particular that I enjoyed that were reflective of this bigger picture. One question was about Board capability and competence in relation to marketing, technology and the like. Another question related to competitor behaviour and business model design, and I shall add to that with own interpretation of suggesting a link to industry structure. These considerations are all crucial to forming a complete view of the digital/technology/information age related change impacts on all organisations, and indeed on the community at large.

These change impacts are happening in waves. One of the latest waves is on marketing. Not that marketing hasn’t been impacted before. It has. But now it is gaining pace and importance, and in some quarters, the Chief Marketing Officer is claimed to be a bigger technology purchaser than the Chief Information Officer.

And so now we have the Digital Strategy. The “marketers who do technology” are now getting so powerful they too can reinvent their own terms. After all the “technologists who do marketing” have been doing this for a long time.

There is a broader picture here though. There was a time in history when finance was not a skill or capability pervasive to all business people. Today you would not get far without it. This evolution is happening with technology. Eventually technology related skills and perspectives, and being able to apply these into every role and every part of the organisation will be standard practice. This remains some decades away.

But stay tuned, the changes are continuous and there are many many steps ahead, despite what we have already seen. And whatever happens, there is bound to be a new name we can call it too.

Written by: 

MANAGING DIRECTOR INFORMATION PROFESSIONALS – MARK NICHOLLS

Mark is the founder of Information Professionals and Managing Director. He is one of the most trusted IT management advisors in Australia, and has managed, advised or reviewed some of the most complex IT and Change Management projects in Australia. A full outline of Mark and his Bio is available here.