Boards are on notice; technology is challenging everything. Technology governance is not just about managing risks; if you think it is, you have already failed. Technology governance is strategic and direction-setting as well as prudent and value-protecting. Whether you are attempting to avoid or instigate disruption, your board needs to increase and enhance its technology governance abilities. Here are some tips to help:
- Get strategic about what you do and how
- Upskill all directors in the way that best suits their needs and preferences
- Add the right expertise to your board at the right time
Every company has a unique competitive situation needs a unique strategy for technology governance. Here are five steps to identify and improve your position:
1. Understand what technologies are developing in your industry. For emerging or seed technologies this can be as simple as tasking a suitably qualified manager to keep an eye on, and alert the board to, developments. For scaling or growing technologies this may require investment to gain an inside view and the ability to move decisively should the technology become established. For technologies that have already emerged as the industry norm the board must either acquire capability fast or build an alternative ecosystem. Hint: building ecosystems is hard, and you should have already started. Use external experts to help you see what you may not yet have noticed.
2. Get the right CEO in place. Talk about the potential actions arising from step one. Ask “Is the CEO excited and energised by these or are they dismissive and dispirited?”. Your CEO doesn’t need to become Elon Musk or Mike Canon-Brookes. But he or she does need to understand how technology can change the way they do business, and be excited to use the company’s strategic strengths and position. They must learn fast and make prudently bold decisions.
3. Break the plan down into its component parts and prioritise appropriately. Make sure that your CEO and executive team can conceptualise and explain how technology impacts your business, what skills they are deploying and developing to harness them, what the costs and timings of the individual plan steps are, and how people will be motivated to change. If your CEO can’t explain and prioritise the plan, they probably can’t deliver it (in which case go back to step ii).
4. Prepare for a backlash. Redesign isn’t easy or fast. Vested interests will emerge to protect the status quo. Shareholders may decry a decrease in short term returns. Staff may sabotage a project that reduces their numbers or power. Customers, suppliers and ecosystem partners such as unions, governments, regulators, and industry peak bodies may try to slow your progress until everyone in the industry can catch up. Don’t let them! Have a plan with clear KPIs so that you can see what is on track for success.
5. Keep the board diverse and cohesive. Some directors will be less comfortable with change than others. Don’t ignore their insights and don’t derail the project with their doubts. Make sure that the board has regular robust discussions about technological change and the status of change projects. Listen to objections and make sure you have sensible responses to every single one. Make sure that all directors will support the plan and its risk/reward balance.
Upskilling the Board
Good directors are great learners. That is how they get good and stay good. Ask the board how they prefer to gain skills and insights. Every board should establish a shared appetite for the pace and process of learning. Here are some ideas:
1. Lunch and learn: invite a relevant expert to a board lunch. Have them make a short (15 minutes) presentation and then answer questions during a long conversation. Do this well ahead of any strategic decision so directors have time to make additional independent inquiry.
2. Site visits: take the board to a location where relevant technology is in use. Encourage the board to talk with the staff who are using it. Visit supply chain partners if appropriate.
3. Industry conferences: There are plenty of great conferences where valuable IP is shared on stage or in discussion afterwards. Make sure that directors attend a variety of these events. Then, either during the meeting or in informal discussions, talk about what they learned.
4. Formal courses: Look for relevant short courses on topics of interest to the board, or provide an education allowance that individual directors can spend on more extensive (and expensive) courses. Expect directors to demand education in AI, data science, augmented and virtual reality, internet of things, and more.
5. Governance by wandering about: What? Yes! Take the board out of the boardroom and let them spend time with staff delivering technology change projects. You will be amazed at how it positively impacts staff and board members.
Good boards are future focused. They know what skills will be required to deliver effective governance of the strategic plan. They are pragmatic about their ability to develop these skills and accept that board composition must change.
Manage your tenure and term limits to ensure that your board remains renewed and refreshed.
Keep an up to date skills matrix and a clear understanding of technology expertise requirements. Draw up a ‘hit list’ of directors in demand and have conversations with the highest ranked candidates to ensure they consider you in their portfolio planning. Use intermediaries; you won’t know everyone you need.
Don’t follow the crowd and recruit the newest ‘in vogue’ director; be clear on the expertise you seek and the places where it is being deployed. Find out where the relevant technologies are coming from and source your next director there.
Will these steps guarantee success in the race to win? No. Will they give you an advantage and improve your chances? Yes.
Julie Garland-McLellan is a boardroom specialist and has served on a range of boards within not-for-profit, government, commercial sectors, and with publicly listed companies.
Julie is regularly consulted by the Australian media on board matters and is much sought after as a keynote speaker. Her newsletter, The Director’s Dilemma, is read in 32 countries around the world.
Julie has a degree in Civil Engineering, an executive MBA, a Graduate Diploma in Applied Finance and Investment, a Diploma of Company Directorship, and an Advanced Diploma in Company Directorship.