Why corporates need to disrupt the boardroom
Digital transformation is about much more than technology. Digital business demands a new approach, organizations have to reinvent themselves to remain viable and meet their rapidly changing customer’s expectations. Some corporates realize this and disrupt their organizations in order te become successful in the digital space. However, most of the boardrooms consists of baby boomers coming towards the end of their careers. These executive are not digital savvy and now need to set digital strategy for their organization. It’s a recipe for failure and corporates need to disrupt these boardrooms before it’s too late.
Digital demands a new approach
Digital business demands a new approach, a different mindset in how you plan, organize and deliver change into your business. While 74% of business executives surveyed by Forrester say their company has a digital strategy, most of them have based that strategy on flawed assumptions. The boardroom is blocking innovation, according to Martin Gill of Forrester during The Next Web Europe conference last April. “39% Of CEO’s set digital strategy, while only 21% of executives think this strategy is clear”, says Martin. But what’s more, they are going about delivering it in the wrong way. Too few companies have woken up to the new reality they now operate in.
Most of the boardrooms today look like retired gentlemen’s clubs
Executives of fast growing startups understand the digital space as no other. Netflix for example has the goal to become HBO faster than HBO can become Netflix, according to Ted Sarandos, Netflix’ CCO. And they are well under way of doing exactly that. Taxi app Uber doesn’t let anyone stop them in their attempt to disrupt the transportation industry, you now see that legacy organizations are following Uber’s lead with their own app initiatives. Whatsapp disrupted the lucrative SMS business models of telco’s all over the world. And there are more examples of success.
These are all lean startup organizations, how are the corporates doing you wonder? Recently the Dutch ING Bank announced it will transform its traditional hierarchical organization into a lean and extremely flexible organization. They model their new structure to the successful Silicon Valley examples like Google, Netflix and Spotify. “ING will invest 200 million Euro in digital”, CEO Nick Jue says. The new strategy of ING is an example for many though, most of the corporates are having a hard time to innovate and disrupt their organization.
Mind the gap
Nilofer Merchant, author of “the new how” talks about the empty void in an organization between the high-level strategy conjured up in the stratosphere and the realization of that vision down on the ground. In the book she also says that organization’s hierarchy is the number one reason organizations are killing innovation. The gap between the strategic boardroom and the execution on the ground is too large.
Disrupt the boardroom
In order to succeed with digital transformation we need a different kind of executives. Younger, digital natives who understand the needs of their online customers. Board members are typically hired by CEOs whose top criteria is that new board members get along with current board members, this way change will never come. The average board member in Europe is 58 years old! The good news is that these baby boomers are now retiring and making place for a new generation. The composition of the boardroom is likely to change meaningfully over the coming years because of this.
I challenge CEOs to learn from digital natives and make the necessary change together!
If you’re an executive I challenge you to learn from digital natives and include them in the change process of digital transformation. Learn from your target audience, your future customer and future workforce. And shape your organization to their needs.
How about you?
What’s your vision on digital transformation and how is your organization handling change? Let’s have a chat and discuss what the digital future will bring your organization. Looking forward to reading your thoughts in the comments or connect with me on social media.