"If the rate of change on the outside exceeds the rate of change on the inside, the end is near."
Jack Welch
(N.B. This post is part of an occasional series I'm doing, drawing from some of the thinking that's going into the book I'm writing – any feedback is appreciated)
In today's world, slow decision-making can generate real problems for companies. As the pace of digital development accelerates and pressure on resources intensifies, one of the key challenges that arises in organisations undergoing digital transformation is the effective prioritisation of digital projects and developments. There is just so much to do, so many different (and potentially competing) priorities that it can be hugely difficult for those at the top to know the right thing to do (especially if their level of knowledge of all things digital is not what it could be).
The issue is often not about the significance attributed to digital projects and development by the company board. Digital development of some kind is a strategic priority of just about every company I've come into contact with. A more likely scenario is that whilst an organisation may already have digital development as a corporate strategic pillar, the difficulty comes in taking account of multiple dependencies or risk factors and in elucidating a priority list that will ensure that the most meaningful and impactful changes are prioritised above those which may have less significance.
Sometimes impact is difficult to demonstrate or even to determine. Sometimes changes that have short-term impact might be unfairly or misguidedly prioritised over those with potentially much larger long-term impact. Sometimes involvement of multiple senior-level stakeholders slows the decision-making down to the point where the impact of development is negated.
Companies might try to mitigate this risk by appointing digitally-savvy people to the board, or having a board member take responsibility for becoming a digital ‘champion’. Both of these options can help. Yet there can be little substitute for a board that is conversant and experienced as well as informed. The broader this capability across the board the better. Every company is operating in a digitally-empowered world which means there is now little excuse for lack of board level competency and proficiency.
Outside of board meetings decision-making structures need to be agile in support of an empowered board. Clear delineation of responsibility helps (Peter Thiel has said: “The best thing I did as a manager at PayPal, was to make every person in the company responsible for doing just one thing. Every employee’s one thing was unique, and everyone knew I would evaluate him only on that one thing”. Whilst the clarity, focus and simplicity that this brings may reap dividends for startups and small businesses, as a company scales applying this approach to small teams rather than individuals is likely to be easier). Clear and sensible escalation procedures also helps. As can empowered front-line staff and heightened team autonomy.
But sometimes more formalised senior decision-making and feedback structures are needed. The creation of a ‘digital board’ can prove to be extremely valuable in facilitating agile governance whilst providing a crucial link to the most crucial decision-making body in the company: the main board. A ‘digital board’ might typically comprise key main board members (the board ‘digital champion’, or Finance Director or perhaps even the Managing Director or CEO) and other principal digital stakeholders, and becomes the main decision-making body for the digital development roadmap, meeting regularly to make key investment and strategy decisions.
This ensures the ongoing commitment, involvement and engagement of key senior staff including the CEO, CFO, and/or the IT and Operations Director, provides a crucial link between digital operations and the main board, whilst still keeping the decision-making process as agile as possible. And when the business is in the midst of transformation, agility is exactly what you need.
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