By Carol Coughlin CEO & Founder: BottomLine Growth Strategies
When it comes to change in the business environment, there’s no question we’re in unprecedented times. As a result, many industries are currently experiencing some type of disruption. A few examples:
- Amazon and Whole Foods may or may not be a match made in heaven, but we do know the stock market liked the deal on both sides of the equation. Digital marketers are discussing the disruption of the supermarket industry thanks to the combo of powerful tech and a heart-centered focus on the customer—both factors in enhancing the shopping experience.
- The banking industry is in the throes of disruption, too. Fintech companies are providing instant loans and fast mortgage approvals, and far fewer people are visiting their local branches thanks to the ability to bank online 24/7.
- Even long-held best practices such as investing in actively managed mutual funds are under scrutiny as robofunds disrupt the financial planning industry by offering individuals data-backed reasons to question whether they really need to be paying those high fees for human advice.
Of course, these represent just the tip of the disruption iceberg. Companies in all industries are quickly realizing that to survive and thrive in today’s business environment—and even better, to be the disruptive force that changes the game—requires more strategic thinking and willingness to challenge conventional wisdom than ever before.
The question is: Whose job is it to imagine the future and craft a plan for responding to it—or creating it?
I contend that while top managers should certainly be heavily involved in the development of strategic direction, it also needs to be a core priority of the board of directors. However, given the role boards have traditionally played, achieving this is going to require disruption of its own.
Rethinking the Board’s Role in Creating the Future
In many cases, the board of directors has been a supervisory body, setting controls and ensuring corporate compliance. Even though boards have participated in setting company goals and strategy, the type of thinking required to envision a yet-to-be-imagined future—and especially a future that may include a pivot—has typically been left in the hands of management.
The reason? Quite simply, it’s always been done that way and many companies consider strategy to be solely a management and not a board function.
But given current marketplace conditions, a board of directors that does not prioritize visioning the future is, in truth, engaging in a potentially company-damaging practice because:
- What if … management is so focused on running the business that they don’t have time to vision the future?
- What if … management can’t adopt the outside perspective that’s needed to remain objective, scrap convention, and truly rethink?
- What if … the supervisory and protective nature of the board so solidly cements the perception that “safety” equals “status quo” that the emergence of unconventional ideas is wholly stifled?
Yet, when you pair the current business environment, the realities of management’s day-to-day and the fact that it’s the board’s job to protect the company with the insight that what’s actually needed most right now is thinking ahead, one thing becomes crystal clear: A board that hasn’t prioritized time to be future-focused is playing with fire.
Disrupting the Traditional: The Road to Becoming a Future-Focused Board of Directors
Getting the Board on Board. The first step to becoming a future-focused board is making the case to the board in order to generate the consensus needed to ensure action. This might occur naturally if the board as a whole is discussing topics such as business trends or measures to increase board effectiveness and collectively comes to the conclusion that they need to shift priorities to best serve the company. But if this is not happening, an outside board advisor, top executive, board chair, or another individual board membe can help convince the board of the imperative of becoming future-focused.
Prioritizing a Future-Focus. Once the board of directors understands the very real need to prioritize future-focused thinking and commits to pursuing it, it must also commit to creating time for it. There are a number of ways to do this, including putting strategy-related items at the beginning of the board agenda; shifting more work to committees which then report to the board (as appropriate); and having separate sessions outside of the typical board meeting, even at a different location.
Clearly, being a future-focused board is not a one and done job. Regardless of whether future-visioning work is part of every meeting or conducted separately, it’s an ongoing activity and time should be scheduled for it throughout the year.
The Board of Directors as Change Agents: Taking the Final Leap
Through the process of scenario planning, asking tough questions and having difficult conversations, board members grow their curiosity, learn to listen more deeply, loosen their grip on the status quo, and become increasingly open to innovation. The board is then able to use these same skills when presenting new ideas to management and employees—ultimately becoming an invaluable asset in facilitating change.
The board can also play a key role in helping management set and track innovation metrics and keeping the company externally engaged, which is key for capitalizing on trends, developing future-focused partnerships, and generally gaining and keeping a competitive advantage.
Additionally, boards in which members have varied backgrounds, professional experiences, and perspectives tend to be far more effective agents of change. After all, disruption stems from thinking differently and diverse boards, by their very nature, bring diverse thinking to the table.
In short, at a time when marketplace disruption is no longer the outlier but the constant, the more ability and courage directors have in challenging each other and management, the stronger the company they represent will be.