Digital Transformation: Four Ways a Board Can Ensure Success
Ameeta Soni, a growth advisor with over 20 years of strategy and board experience, shares how boards can support a company’s digital transformation.
Today, there are no more excuses to avoid a digital transformation. On the contrary, COVID and competition have highlighted its importance to a company’s growth, regardless of its size. It allows a company to use digitally enhanced products and processes to better connect with its customers and other stakeholders, drive operational efficiencies, and build the business backbone.
Getting it done and getting it RIGHT shouldn’t be mutually exclusive concepts. Yet, according to BCG, a staggering 70% of digital transformations fail. So how can Boards improve the odds of success?
Board directors are not involved operationally but ask questions, challenge expected outcomes, spot deficiencies, and motivate the team. Based on my personal experience with board service and digital initiatives,
I see four ways that boards can best help a company’s digital transformation:
- Ensure the company’s digital transformation and business strategies align. Transformation is always about strategic change. As stewards of corporate strategy, board members work closely with the management team to ensure a company’s success. They bring business expertise, judgment, healthy skepticism, and a strong interest in long-term value. Board members not only ensure the core value proposition and competitive differentiators in current and new markets but also assess how the digital transformation will sustain long-term success and create value. In addition, they recognize the company’s capabilities and constraints and tie the digital transformation to specific goals and results.
- Get agreement with the management team regarding the associated risk. Boards ask tough questions and surface the benefits and risks. For example, digital transformation has risks associated with complexity, pace, and impact on the existing business. Board members don’t need to be technologists. However, it is helpful for them to have experience with technology investments and implementations or make an extra effort to understand the issues. In addition, they need to resource technology for future success, balancing the advantages and risks while ensuring a resilience plan in case of hiccups. I have experienced firsthand the implementation of a digital initiative, where despite everyone’s best efforts, things went wrong. However, the board’s engagement ensured that there were no surprises.
- Get the right CEO and organizational skills. The CEO is essential to the success of digital initiatives but can also cause failure. As such, Boards need to make sure they have the right CEO, one that can meet today’s financial projections, promote collaboration, drive the company’s focus on efficiency, and promote data and analytics for insights. Digital transformation relates to business operations; technology is merely an enabler. It takes more than just technical skills in the organization for its success. Business transformation skills are critical, as is the alignment between IT and business functions.
- Get Employee Buy-in. Digital initiatives are the ultimate change management project. Boards can set the tone by engaging employees about the process and getting their feedback. Employees are more supportive of new initiatives if they are engaged, but they also need to know that the future of the company, and their jobs, might hinge on success. If the new efficiencies from the digital transformation may lead to layoffs, providing opportunities for employees to train, reskill, and transition as appropriate can go a long way in improving morale and ensuring success.
Digital transformation certainly isn’t easy, hence the high failure rate. However, Boards can tilt the balance in a company’s favor by ensuring clarity of purpose, recognizing the company’s capabilities and ability to drive change, and appreciating and managing the risks.
Ameeta Soni has been a senior leader for many tech companies, serving as Founder, CEO, CMO, investor, board director, and advisor, and raising over $100M in venture capital. As principal at management consultancy Altek Consulting, Ameeta delivers dramatic growth by developing and executing winning strategies. In addition, Ameeta serves on Maroon Venture Partners Fund’s investment committee and holds board roles with portfolio companies HomeBinder, Ompractice, and TOP the organic project. She was previously a board director of PlumChoice (now part of SquareTrade/Allstate) and several non-profits. Ameeta earned her MBA from the University of Chicago, her M.S. from the University of Massachusetts, Amherst, and her B.S. from St. Stephen’s College.