Sabine: The role of the board in the age of digital transformation. Technology adoption has driven massive change for all organisations. Today’s boards must steer their organisations through digital transformation and support their management team, who are facing great opportunities and massive threats. Welcome to the Better Boards Podcast series. In this episode, I am delighted to talk with Lisa Harrington about the role of the board in the age of digital transformation. I’m Dr. Sabine Dembkowski, founder and managing partner of Better Boards. We make the boards of the most ambitious organisations more effective. Our mission at Better Boards is to contribute to creating better boards. We do this by providing clients with an evidence-based approach for board evaluations and board development programs. To fulfil our mission, we give a voice to all who care about creating better boards. Lisa, thank you so much for contributing to the Better Boards Podcast series.
Lisa: Great to be here. Thanks, Sabine.
Sabine: So, let’s jump straight in. What does digital transformation actually mean?
Lisa: Well, it’s a kind of outdated phrase, I think. In fact, I think people feel it’s a technology app, or it’s a digital device, but really transformation means changing your whole business model to be fit for the future. That’s usually powered by data analytics, by faster product development, and by a shift in culture as well. So, it’s a big transformation, and it’s something for the long term.
Sabine: A lot of talks about the pace of change initiated through COVID. What’s your view on it?
Lisa: I was working with a company just as COVID [inaudible] learning, from face-to-face classroom-based to digital, and I think I saw an acceleration of maybe three years and three months. Things that people said no to previously suddenly was acceptable, the culture shifted, everybody really wanted to make digital successful. So, I think it’s been absolutely phenomenal, Sabine. And I think just seeing how customers have got used to doing things digitally, it will be unusual to see anything go backwards.
Sabine: What role should a board really play in this whole process?
Lisa: I mean, the very first thing for me is leadership. It’s really in the same category as ESG. I do acknowledge they’re very different topics and different responsibilities. Digital transformation is led by the boar, and it’s for everybody. That would be my absolute starting point, leading, and how important assessing your digital model is for the future.
Sabine: So, when you lead, you need to understand what you lead.
Lisa: Yes.
Sabine: And when we do these board evaluations, I very often find, when I look at the composition of the boards, the composition is not necessarily aligned full at the moment with the strategy organisations formulate. There are gaps, and very often the gap is exactly what our topic that we are talking about, in the field of digital knowhow.
Lisa: Yeah. You’re spot on. I totally agree with you. I would say almost every board might have a digital gap. I’m on the board of the Post Office in the UK, very much to sit in that digital seat. And all credit to the post office, who would be a more traditional – maybe legacy would be another word that we would use – organisation, but I was appointed a year and a half ago very much with digital in mind. And I think you have got to find somebody who has digital experience and knowhow, and even if it means taking a less obvious generation, so somebody in their thirties or forties that maybe doesn’t have general management experience, but can bring a different perspective on digital.
Sabine: I mean, it’s a problem a lot of boards face. What’s your tip? Where can they find this talent?
Lisa: I personally love going to a lot of the angel investment meetings that there are. Certainly in London there are angel sessions all the time. You get to meet some really interesting what I would call [inaudible] digital and entrepreneurs, digital organisations. The Facebooks, and Amazons, and Netflix, that world. And often they’re very happy to expose themselves to a more traditional organisation, because they’re gonna learn as well, and it works both ways. So I’d start somewhere like there.
Sabine: That’s a good tip.
Lisa: Yeah. I think what I’ve always found is that it’s a little bit like reverse mentoring. If you give somebody the time, they’ll often give you the time back. My last business, again, [inaudible] and business, and actually the founder, who was in his thirties, I learned as much from him, I think, as hopefully he learned from me. Because we had completely different skills and perspective on business.
Sabine: So, with all this in mind, what’s the best way to start this digital transformation at bard level? Where should boards start? You mentioned ESG. There’s an awful lot on the plate of any board member at the moment. What’s the best way to start this digital transformation?
Lisa: For me, I don’t think it’s optional. I can’t think of any business that won’t or isn’t already impacted by a shift in business models from a competition perspective. Whether it’s marketing, or understanding customers through data, there’s no one that will be untouched. We’ve talked a bit about trying to get the right skills on the board. I think the boards need to educate themselves. And I think a little bit like most people are educating themselves, ESG gets some great guests in, invites businesses, go and see their businesses if that’s possible in COVID. I think those things will give boards confidence.
Sabine: What is in your view the hardest part for boards, particularly of legacy companies, of this digital transformation process?
Lisa: There are two. The first one is what I call culture. So, it’s just really rallying, everybody believing that they need to change, and believing that they can change, because you’re gonna have to reeducate and retrain your staff. And I think that’s really difficult, particularly when there’s a lack of talent. The second one is cannibalisation. Often, for legacy businesses, it means possible destroying or eroding a successful model that they have, albeit in decline, and replacing it. And that’s where the board comes in again, because they’ve got to look mid-term, long-term at het business model, not just short-term.
Sabine: Can you give an example? You have a wealth of experience, particularly in these digital transformation processes. Can you maybe give a couple of positive examples of what organisations have done to overcome these challenges?
Lisa: Sure. If I think about the tech education business that I worked in, we were 100% face-to-face in how we delivered our learning. What we did there was some very rapid customer design work. We looked at how we might offer blended learning options instead. We made ourselves very aware of what the business model would be, how long it would take to pay back trying to build a platform. We actually bought a company to really reinvent ourselves, and rebuild our offering around us. So, we shifted from people coming into a classroom and meeting a teacher face-to-face, being in the classroom, but also reinforcing learning virtually, having virtual labs. That was a big shift for us. Our teachers were actually quite resistant to delivering learning online. And we laugh at that now because it’s so normal post-COVID, but actually the biggest resistance was cultural, because people didn’t believe that students would be open to learning online, which of course, they are. So, we really understood that people want both. They didn’t want one or the other. And they were willing to actually pay. Our business model would work if we could really reinforce and make that customer experience very consistent and rewarding for the teachers as well, because they now like the optionality. We can work around the world, we can expand into markets we weren’t in, because we have more flexibility to work in not-9-to-5 ways. It started and it was quite daunting, to be honest.
Sabine: That’s a brilliant example.
Lisa: But other ones as well. The Post Office, again, a very traditional business, the life of the community. And we pride ourselves on being in every community. But we realise we’ve also got to offer products at home, and book a package or something, then they’ll actually have to come in and give us that package, because there’s no other way to get around it. So again, we’ve just really got to think of beautiful customer-led journeys, and maybe start and finish in different places.
Sabine: You mentioned culture. I’m intrigued by it. I know from my past life as a consultant how hard it is to change the culture of an organisation, and how long it can take. At the same time, we do not have the luxury of time at present. So, any tips on what makes a difference? How can you spark that culture into really changing?
Lisa: Where I’ve seen most successes, I do think hiring- that’s my first observation. I think the second thing is getting some fast successes, some quick wins, that people believe that things can change, and there is a different way to do business successfully. Trying things, being innovative, being creative, and just creating that energy for people. I think that is all part of the digital culture and the digital mindset.
Sabine: What are the top three things that our listeners should take away from this podcast?
Lisa: I think I really only have one thing. It’s absolutely not the job of the CEO or CTO. And if you’re starting a digital transformation, just get in there, get the skills at your table, make sure that you’re educating yourselves as a board, and make sure you’re absolutely that voice of mid-term business model for your executives. And start. The elephant is a huge elephant, but you’ve got to start to eat it somewhere. Have that confidence, and give your exec team the confidence to reinvent themselves, or the competitors will eat your lunch.
Sabine: Fantastic Lisa, on that cheerful note. Thank you so much for contributing to the Better Boards Podcast series.
Lisa: Great to speak to you, thank you.
Sabine: How can we help you and your board? We at better boards are always delighted to hear from you. You can best reach us at info@better-boards.com.
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