This is the first of two posts concerning the NACD-New England symposium held this morning, discussing the role of Boards in managing digital disruption. The first addresses major points for Board consideration recommended by the panel. The second will discuss certain societal and ethical issues not fully explored by the panel.
PANEL: Led by James Cash, ex Harvard BSchool professor and leading board member. CEO of Iron Mountain Bill Meany. Noted Board members Pamela Craig and Ann Fudge.
WHAT IS IT? Digital disruption is use of AI, internet, big data and social media in a business in strategic planning, marketing, operations, customer/client interface; everywhere.
MAJOR THEME: Digital transformation is irresistible and if your company does not pay full attention, you will be left behind. Digital disruption of your business model should be part of your strategic planning. Once planned, step back and let management, led by younger tech-savvy people who are well-compensated for leading digitization of your business, implement. This differs from prior practice where strategy was devised first, and technology entered the effort only at the end when it came to implementation.
SELECTED TAKE-AWAYS: Boards must be brave and empower the new technology even if directors expect that the stock price will take a (interin) hit and that shareholders may not understand. Particularly important to note in that these changes are both expensive and some are bound to fail. One major benefit is that now companies can hear from their customers or consumers and get vital input as to how to craft their deliverables, not a line of communication previously available; Boards should be sure that this benefit is realized. Mixed thinking about which committee owns the task of driving/understanding digital disruption, it depends on the industry and the company: audit? ERM? Cyber Committee? Tech Committee? Address Board education and include tech-savvy board members. Be sure digital disruption permeates all operations (no silos).
CATCH PHRASE: “Disrupt or be disrupted.”