Boards have a vital role to play in digital transformation. Early role descriptions for digital directors were focused on reacting to immediate disruption, where companies sought executives with experience running digital pure-play organizations, who would bring tech savvy and a millennial mindset. However, over the past 5 years, four categories of leaders have emerged in the board room: 1) digital thinkers, who conceptually understands the digital environment, but are not digital natives, 2) digital disruptors, who have experience with pure-play companies, but generally have less management breadth, 3) digital leaders, who have less hands-on digital experience but have managed disruption as a general manager, and 4) digital transformers, who have led or participated in a transformation of a traditional Business. Increasingly, people are being selected from the fourth category. Rather than placing an emphasis on disruptive forces, boards are increasingly seeking directors who bring operational capabilities and who can guide the re-engineering of the entire organization.
When the term digital transformation was first bandied about by consultants and Business publications, its implications were more about keeping up and catching up than true transformation. Additionally, at first it was only applied to large, traditional organizations struggling, or experimenting, in an increasingly digital economy. But true digital transformation requires so much more. As evidenced by the recent Amazon acquisition of Whole Foods, we’re living in a new world.
Early transformation efforts were focused on initiatives: e-commerce, sensors/internet of things, applications, client and customer experience, and so on. Increasingly, our clients are coming to us as they realize that in order for these disparate initiatives to thrive, they need to undergo an end-to-end transformation, the success of which demands dramatic operational, structural, and cultural shifts.
We started tracking the role of digital in the boardroom in 2012. Our formal research echoes the sentiment we hear from our clients in every engagement:Â The board of directors has a vital role to play in digital transformation. Though 63% of executives say that the partnership of the board is critical to the success of transformation efforts, only 27% report that the board serves as an advocate for current strategies.
Early role descriptions for the addition of digital directors were focused on reacting to immediate disruption. These companies sought executives with experience running digital pure-play organizations, who would bring tech savvy and a Millennial mindset. Over the past five years, we’ve seen the role mature into four categories of leaders:
Although there continues to be a need for digital disruptors at the board level (think Stacy Brown-Philpot, CEO of TaskRabbit and director at HP and Nordstrom), increasingly we’re seeing and encouraging the appointment of leaders from the fourth category.
