While I am not proposing that Boards need a deep understanding of digital, there does need to be a rebalancing. In an era when the world’s most valuable and profitable companies are “digital first”, Australia cannot compete while 91% of our Board directors languish in a 20th Century mindset. IBM’s Global Managing Partner for Social Consulting, Andrew Grill explains this as lacking “digital literacy”. In a recent BlueNotes article he suggested:
… the issue of digital literacy remains, in my opinion, a much more important issue than it was back in 2001.
In 2015 it has the ability to affect the stock prices of publicly listed companies in the short to medium term if left unchecked …
I see firsthand how companies are struggling to ensure the C-Suite can quickly grasp the impact of digital disruption being felt across all industries. Digital disruption is not just around the corner, in many industries it is already here.
Australia has a history of downplaying the importance of digital transformation and innovation. But the clock is ticking and the threat of digital disruption is real.
32% of revenue is at risk over the next five years due to #digitaldisruption
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At a recent MIT symposium, it was estimated that 32% of revenue is at risk over the next five years due to digital disruption. Furthermore:
One panelist went so far as to suggest that companies won’t exist in 10 years if they focus only on “traditional products.” The way forward, he suggested, is to offer products and related services enabled by digital technologies.
Digital Natives, Reverse Mentoring and Digital NEDs
Having been Chair of youth not-for-profit organisation, Vibewire, for about seven years, I have seen first-hand, the massive changes in the way that young people, think, act and work – especially in relation to digital and social media. Close collaboration with digital natives – those who were born after 1980 and have always had access to the internet – can be eye opening. But also informing and enriching. It can transform the way that you work – if you are open to it.
This is where “reverse mentoring” comes in. More senior executives and Board members can be paired up with younger employees where cross-skilling and mentoring can take place. This can be a two-way experience – where each person’s experience and skill is honoured – and new experiences and skills developed.
But how do these skills reach the Board? Andrew Grill suggests engaging digitally savvy non-executive directors. Qantas has adopted this approach, appointing ad agency boss, Todd Sampson to their Board earlier in 2015. The question, of course is, how do you spot a digital NED? Here are some pointers (hat tip to Andrew):
- Identify someone who understands the urgency and speed of change that is taking place
- Look for those who understand the complex workings of the enterprise and can translate this to digital
- Seek experimenters and those with a degree of hands-on experience.
