Drawing on more than 1500 informants across 90 countries, the authors observe that fewer than half the surveyed participants think they or other senior executives in their organisations have the right mindset and skills to lead in the digital era. Given the older age profile of many boards, it is likely that an even smaller proportion of current board members have the desired attributes identified by the research. The six attributes identified by the research are needed just as much by board members as by senior executives.
1. Be a catalyst, not a planner
The speed and complexity of technological change requires digital transformations to be more iterative than other forms of corporate change. Significant competitors are no longer the usual suspects while customer and stakeholder expectations continue to evolve. Relying on past experience or expertise when making decisions is likely to be problematic, so boards need to be catalysts for change rather than planners of it.
They need to create the conditions for their organisation to achieve its ambitions and guide their company through a process of continual learning and adaptation to changing circumstances. Directors will need to be comfortable with ambiguous and incomplete information. Decision-making at both board and executive level will be more like posing a series of working hypotheses to be tested. Openness to emergent strategy will replace the more traditional linear and deterministic strategic thinking.
2. Trust and let go
Creating the right corporate culture is essential. Top-down decision-making dependent on hierarchy and rules must be replaced by collective action and co-creation within an increasingly diverse workforce (the authors highlight the importance of nurturing younger ‘digital natives’). That means inviting employees to share in decision-making and ensuring they feel safe enough to take risks and act on behalf of organisational interests.
It means even greater emphasis on the need for boards and senior management to communicate corporate purpose and values, and to empower others to execute. Leaders must also earn trust from and offer trust to increasingly diverse stakeholders outside the organisation. Boards must be particularly aware of corporate culture and even be the primary drivers of change in it.
3. Be an explorer
Curiosity is a vital attribute. What questions must boards ask—and ensure are answered—to position their organisations for future success?
Directors must also figure out when to be open-minded and broad and when to be focused and dig deep. They must learn to sense ‘weak signals’ about what is happening in the external operating environment and inside their organisations.
Non-executive directors are uniquely placed to bring the outside in, but they must also be familiar enough with emerging technologies to ask the right questions about opportunities and risks and to set boundaries to guide the deployment, for example, of digital tools and data. This is likely to require special effort to develop each board’s technological literacy.
4. Be courageous
Directors need a different attitude to risk. One of the greatest risks in this environment is missing opportunities. Directors need the fortitude to make tough decisions when big bets are required. Boards must get comfortable with experimentation and inevitable missteps. In this regard, they need to have a well-developed awareness of the pressures they place on their executives and the working environment they create for them. It is not just about ensuring that their executives create an environment of psychological safety for employees; boards must create a safe environment for their executives as well.
5. Be present
Research suggests that the best leaders stay present and emotionally engaged, communicating openly and authentically. During times of upheaval, it is particularly important that leaders are empathetic, compassionate and vulnerable (acknowledging the need to be more comfortable with emotion-laden interactions).
They also need to be adept storytellers, able to align diverse stakeholders around a shared narrative that will help the organisation pursuing its purpose. A particular challenge is delivering a message that resonates with diverse stakeholders. This trend points to directors needing to be less remote from the life of the entities they govern than has traditionally been the norm in many organisations.
6. Live values with conviction
Corporate purpose and an organisation’s values become as the authors put it, “…the compass for navigating the many complex ethical dilemmas that arise with technology and data”. Both employees and customers, especially of younger generations, expect leaders to take a stand on controversial ESG matters. This means corporate leaders must show how corporate purpose and values shape their decisions and the principles and guardrails they rely on when weighing up trade-offs. This is another reason boards increasingly need to take an active role in defining corporate values and providing assurance of their consistent application.
What is noticeable about these six attributes is that they extend well beyond knowledge, skills, and experience in digital transformation. They point to attributes likely to be widely valued on any board, regardless of how capable it is of responding to its organisation’s technological challenges.
With an increasing emphasis on selecting board candidates based on their ‘soft skills’, this article is a notable contribution to our understanding of what those might be.
