Uber and AirBnB are leading the charge when it comes to a new order of businesses that have totally disrupted the way business is done. Many in the business world never even saw it coming. Today, top executives around the world agree that making digital transformation part of business processes is critical to their organisations. The disrupters have proven that digital technology is vital for business growth and sustainability. There is indeed a correlation between technology and higher revenues, profitability, and market capitalization.
MIT Sloan Management Review and Capgemini Consulting conducted a survey in 2013 involving executives and managers in various industries. The survey found that most managers (78% of the respondents) agree that technology is capable of transforming businesses in huge ways. However, they also feel that it’s quite difficult to effect the change without much support from their boards. 63% of the respondents felt that implementation of new technology in their organisations was too slow.
Harvey Nash Alumni, a world renowned recruiting firm recently conducted a study on how businesses are evolving in a digital, diverse world. According to the study only 14% of the survey participants had boards with a fully comprehensive digital strategy.
Another detailed analysis done by Russell Reynolds Associates involving boards of Fortune 100 and equivalents in Europe, found that the boards that had implemented various digital initiatives and had members with professional digital knowledge gained impressive performance numbers compared to those whose board members have very little digital knowledge. The digital savvy organisations realised and average of 9% higher revenue, 12% higher market valuation and 26% more profitability. These numbers are a clear indication that every board should be thinking seriously about implementing technology in their organisations. It’s the board’s role to ensure that their organisations are part of the disrupters. So what did Uber and airBnB do in order to disrupt the business world that your board can learn from?
These two businesses saw an opportunity to offer an already existing service in a more innovative way. While their ideas aren’t necessarily new, they just saw a better way to do what others were already doing. Innovation reinforces business growth and transformation. Your board needs to always look out for innovative ways to improve business. Members need to be more proactive and farsighted when it comes to innovation. Technology has opened up a bottomless pit of innovative ideas that can help steer your organisation towards growth. Your board thus, needs better knowledge about the technology, its potential impact on the business and its value chain. Your board should make technology and innovation part of its top agenda. Make it a priority during board meetings as well as during annual strategy meetings. This way it becomes part of your strategy and a priority hence making implementation easier and faster.
Prepare for the Constant Shift in Business Landscape Across Every Industry
Experts argue that businesses in direct competition with Uber and airBnB, should have seen the change coming. That it was the responsibility of top executives to anticipate the technological innovations that led to the two disrupters. While foreseeing change is not always easy, the forceful nature of today’s digital disruptions calls for boards to be prepared for the constant shift in business landscape. Boards must make it their responsibility to be the main catalysts for digital transformation efforts in their businesses. This means that they should fully understand all the digital strengths and challenges. Your board should therefore, make good use of pattern analysis and business analytics that relay insights on every aspect of the business model. This gives a better picture of what is working, what is not working and where innovation is required.
Install Next Generation Directors
An ageing workforce in Australia and the world in general is quite common. However, if anything, these two disrupters have shown that young people with diverse backgrounds are very much capable of building multi-billion dollar companies. Young people are now the next generation of directors. These people have diverse tech talents, adapt well to different organisational cultures and yearn for leadership responsibilities. In fact, a study of 16,000 millennials from 43 countries conducted by INSEAD Emerging Markets Institute found that that 41% of the millennials find that being in managerial or leadership positions is incredibly important to their career growth. They thus, crave and work towards such positions.
These next generation directors may not have any board experience and may probably not be the pool that you consider first, but it’s important to note their desire for growth, diverse skills and attitude towards innovation. Their tech knowledge gives them the ability to influence change within the board and guide other members on understanding technology. Technology disruption may have already hit the world of business, but if your board is proactive then you still have a significant chance to take advantage of digital technology to create innovative ideas that will propel your organisation to great achievements.
Director Institute Next Generation Directors is a private enterprise that is focused on developing and connecting the next generation of board directors with Australian and International organisations and boards.
Director Institute Next Generation Directors our members have access to one-on-one advice, mentoring, peer-to-peer education and business networking opportunities as well as exclusive board opportunities available no-where else in the market. Our easy to navigate resource centre provides members with regularly updated articles, how-to guides, opinion pieces, videos and webinars as well as thought-leadership from some of the world’s most respected authorities on board, leadership and management practices. To learn more about the Benefits of Membership please visit our website.