Overcoming the Big-T challenge
By Sunil Puri, Head of Asia-Pacific Research, Center for Creative Leadership
The last ten weeks have witnessed more than 10 years’ worth of technology transformation! Perhaps one of the few positive spinoffs of the current pandemic and ensuing lockdown is that employees, even those with ‘chronic’ technophobia, have embraced technology with open arms.
The onus is now on organisations to ensure that the momentum around technology transformation does not wane out. Over the next few months, boards may be overwhelmed with complex tech related investment proposals.
Boards will be expected to have a point of view on not only a large-scale technology revamp, but also organisational strategies around complex themes such as AI, blockchain, cryptocurrency, big data, automation and robotics, and the Internet-of-things. They will also be expected to evaluate multi-million dollars technology investment proposals put up by the management.
Boards in Asia were already grappling with the Big-T (technology) challenge. According to Center for Creative Leadership’s “BOLD 3.0: Future Fluent Board Leadership in Asia” research study, four in five boards in Singapore are not satisfied with their level of technology savviness. Almost none have ‘technology proofing’ as one of the top five activities they engage in.
The Big-T double-edged sword
Technology is bringing about a paradigm change in the way business is done, defining who competitors are, and shaping how consumers use products. Organisations are investing serious dollars in technology to attain competitive advantage or just to stay in the game.
Most organisations spend a mid- to higher-end single digit percentage of their annual revenue on technology and related investments, with banks leading the way. Technology can create vulnerability, and there is no doubt technology can create huge opportunities.
As a result, companies are increasingly investing in technologies, such as digital transformation initiatives. This all makes it critical for boards to smarten up on their understanding of technology and digitalisation.
While technology is rapidly becoming more complex, the pace at which boards in Asia are coming to terms with technology changes and embracing digitalisation is not very encouraging. Most board directors agree that they need to be more aware of technology changes.
However, they also warn that the pace of technology advancement is unprecedented, and therefore so is the incremental complexity board leaders need to deal with.
As they bite the bitter-sweet technology ‘pill,’ Asian boards must reflect on the following key questions: How vulnerable is the organisation to technology shifts? Can the organisation get competitive advantage using existing or new technology?
Is technology currently an enabler or a hurdle at the workplace? Are tech and related investments providing the promised ROI? And, does the organisation have the right technology talent?
Five tactics boards must deploy
Despite the technology threat (and opportunities), most boards in Asia still have a traditional composition, with finance, legal, and domain experts forming the core. BOLD 3.0 research highlights that only progressive boards are taking steps to upgrade their technology capability. These range from simply scanning the Internet, to tech trainings or getting tech advisors on boards.
Here are the top five tactics that boards must deploy:
Increase tech awareness: This requires a deliberate mindset shift, according to in-seat board directors. They must research the latest tech advances, engage with technology-oriented thought leaders, attend conferences, talk to tech vendors, and not undermine the value of reading about the latest developments.
Get a technologist on board: Progressive boards are looking outside the ‘usual suspect’ board community of ex-CEOs, lawyers and chartered accountants. According to BOLD 3.0 study, one in five organisations in Singapore prefer to recruit tech-savvy directors on boards as a future readiness strategy.
Work with a battery of tech advisors: Organisations that are starting out on the tech awareness journey or need very specialised technology skills such as high-tech automation and robotics may consider retaining one or more advisors, or special consultants, on a limited-period contract. This group of advisors forms a default reach out team for any questions around technology.
Push technology training: While this is one of the harder options, getting the ‘right’ profile of directors and pushing them to ‘learn’ technology can pay rich dividends. “We need board directors to train in technology, rather than a tech person trained to sit on the board, because there are not too many in that variety,” explained a board director.
Institute a tech committee: Organisations ahead of the curve, especially the ones with a strong potential tech disruption likelihood, often set up tech governance committees. A hi-tech company recently constituted a dedicated board-level technology governance committee through which anything related to technology must pass, comprising board members, outside consultants, and tech- savvy leaders from group companies.
There’s no doubt that technology is racing ahead and shaping our businesses and the way we work. Technology will be even more relevant in the ‘new post-COVID normal’ as organisations will lean on digital like never before. Are your boards keeping up?