Twitter looks to its board for leadership, as it should
In a bid to reflect a more diverse range of viewpoints, Twitter CEO Jack Dorsey is making big changes to the company’s board of directors.
It’s an approach that recognizes the need for root and branch change at the company, and starts in the right place: why is it that so many companies are still so reluctant to move board directors around, typically only doing so in response to the arrival of new shareholders? The board should be a living thing, made up of people able to adapt to a company’s changing needs. Diverse representation is the best way to find the people with the different skill sets needed to deal with specific problems.
There should be nothing strange about the news that a CEO wants a board he or she feels comfortable with and that adapts to the needs of the company. Too many boards are made up of directors appointed more than a decade ago, and who are now likely to be in their sixties: experience is important, sure, but it doesn’t always go with the diversity and dynamism needed to deal with fast-changing scenarios.
The social networks as a highly volatile environment, one where the adoption decisions of users, trends, and changing perceptions seem impossible to control.
This is an industry where a company like MySpace can suddenly capture an entire generation’s imagination, prompting valuations of more than half a billion dollars. And then, just as quickly, that generation can move on to the next big thing, as happened, and MySpace’s value dropped to around €30 million virtually overnight. This is the same industry that created phenomena such as Friendster or Orkut, which after burning intensely and briefly in a few countries, fade and die rather than going global.
This is why the behavior of figures like Mark Zuckerberg sometimes seems so irrational: they’re prepared to pay any price for a company that looks as though it might have a chance of disrupting the scene; and when they get it right, we stop seeing them as paranoid and instead dub them visionaries able to see the big picture in such a complex world.
Perhaps we now need to ask ourselves if this extreme volatility is no longer the sole preserve of the social networks, but applies pretty much to most industries. The problems with Twitter, which is now part of many people’s lives but is losing traction among its key audience, should sound a warning to other companies. The fact that Twitter has changed its CEO, who in turn is implementing changes to the board, giving some indication of the importance of the latter to the company’s future management.
Does your board contribute to an understanding of your operating environment and prioritizing the issues that need addressing? Or, on the contrary, is it a largely useless organ whose largely honorific members meet only to sign the odd paper?
Are we really getting the most out of our board of directors? Over at Twitter, Jack is back, he knows the company is in deep need of change, and he seems determined to do just that.
(En español, aquí)
