Questions for the board to consider
- Is the board overseeing strategy to continually reimagine the future of the company’s business model and consider ways to seize the upside of disruption? If so, how fresh and varied are management’s and the board’s sources of new ideas?
- How is the board defining the company’s industry and competitors in this era of convergence, and do those definitions include nontraditional peers and global players?
- Is the board leveraging the insights generated by analytics and big data in their oversight of the company’s strategy and objectives?
Digital technologies are changing the competitive landscape by enabling the introduction of new and disruptive business models, presenting new challenges to incumbent companies. Technological change is creating new competitors, blurring sector lines, reordering supply chains and lowering price points. Operating in a complex global environment complicates matters further.
Organizations are typically structured and incentivized to focus on fulfilling the needs of existing stakeholders — potentially blinding them to disruptive opportunities that often do not initially meet those needs. Companies are responding by undergoing a strategic rethink, and boards are enhancing their oversight of corporate strategy.
Digital transformation continues to be a critical strategic imperative. It is essential to driving new growth, streamlining operations, increasing profitability and delivering better customer experiences.
. For example, taking a holistic approach to digital strategy across the internal organization and the extended enterprise can achieve more effective business problem identification and responsiveness to new opportunities.
Experimenting with multiple business models through a deliberate and structured process can surface and qualify innovative ideas more quickly. Instituting practices such as “protected” spaces, sanctioned employee think time, and specific incentives that encourage innovation can help to build a culture where innovation thrives. Developing metrics for innovative projects that may be different from those used in evaluating other investments can help evaluate pilots and scale up the most promising ones. Boards should consider advocate and support new and innovative approaches to strategy.