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Four Steps for Boards to Set a Digital Business Innovation Strategy

Boards can embrace digital technologies for long-term success

At a global scale, entire industry sectors are being disrupted through digital technologies. The advances in digital technologies are transforming how company boards set new strategies, beyond the business-as-usual horizon. Critical questions for board members to ask and consider include: What are the different business models that will enable us to deliver our products and services more efficiently?; How can we harness digital technologies to create new products and services?; and How can we leverage digital technologies to service new markets?

Previously a business strategy could focus on refining and leveraging a company’s existing peak market position. However, if they want to remain competitive, companies must now look to strategic growth planning, incorporating digital technologies, to find their new peak position in the market. 

As board members, we play an integral role in developing, monitoring and supporting company’s strategies. Here are four ways boards can rethink and set a digital business innovation strategy and implementation for long-term success.

1. Ensure that the Digital Business Innovation Strategy is aligned to Purpose 

A key function of the board is to define the company’s strategic direction and to monitor the company’s performance against that strategic vision [1]. However, company strategies often outline tactical and operational strategies, rather than an overarching company growth strategy underpinned by digital technologies.

An effective company strategy is about planning to drive positive change. To do this, a digital business innovation strategy needs to answer three key questions: ‘where are you now?’, ‘where do you want to grow into the future?’ and ‘what steps need to be taken today to succeed tomorrow?’.

Depending on the sector, digital innovation strategies can include new business models, services, products, markets, or a combination. However, no singular growth strategy will be effective unless it aligns with the company vision and purpose.

Growth strategies should be developed as part of a larger, long-term vision. Not one-off, fragmented growth projects and initiatives that are conducted in silos within an organisation.

Before implementing a digital business innovation strategy, the board needs to review the overarching business mission and vision. Digital business innovation strategies should be underpinned by a strategic growth mindset that filters through every level of the business, from the board and executive management through to project and operational teams; and it starts with the company’s purpose including its mission and vision, team and culture.

2Revisit Your Vision

Growth strategies should be developed as part of a bigger, long-term vision. As company directors, we must remain open to placing more focus on where the business is going and what we’re working towards, rather than simply what we do.

While a company’s mission, the ‘what we do’, generally remains fixed, the vision, the ‘how we do it’, can evolve. This flexibility and openness to changing the ‘how’ is what enables the successful implementation of any growth strategy.

Your company’s vision should bring clarity to the mission, inspiring growth while also being realistic, actionable and deliverable. 

Company vision and mission statements are often vague and have little relevance to the day-to-day business operations. Without a specific, relevant and liveable vision, stakeholders at all levels can be confused about where the business is heading, what it’s trying to achieve, and where they fit in the picture [2].

Get the vision right however, and a great vision statement can help facilitate growth from all levels of the business, helping to establish a growth mindset that encourages innovation and curiosity. 

Consider these vision statements from some of the world’s largest digital technology companies:

·       Create a world where anyone can belong anywhere (Air BNB)

·       Organise the world’s information and make it universally accessible and useful (Google)

·       Unleash the potential in every team (Atlassian)

·       Empower every person and every organisation on the planet to achieve more (Microsoft)

·       Accelerate the world’s transition to sustainable energy (Tesla)

These vision statements are meaningful and work because they inherently imply growth; they’re not fixed and static. We understand what they’re aiming to do, and they leave room for change, innovation, and improvement in the delivery of that vision.

Microsoft and Zoom have leveraged COVID-19 to transform how we work and collaborate. In order to deliver their visions of ‘empowering every person and every organisation on the planet to achieve more’, and  ‘video communications empowering people to accomplish more’, both organisations were able to ask the right questions and ultimately expand their offerings. At a time when the world most needed these tools, Microsoft and Zoom empowered people to achieve more with online experiences that lead to a mind-shift in the purpose and conduct of meetings and allowed users to belong to different work, social groups and communities. 

Assess your vision and then regularly ask “how can we deliver our vision in new, creative, innovative and unexpected ways?”

3. Be a Storyteller

Having a clear vision is only the starting point when it comes to communicating our business strategies. Creating larger, systematic growth strategies that drive real change within a company must come from the top. It must invite all stakeholders participate on the journey and ensure every employee is clear on how their role fits within the bigger picture. 

To be able to implement a successful digital business innovation strategy, we need to be able to effectively communicate our organisational vision as it relates to every stakeholder and every employee. More than that, we need to be great storytellers.

The art of storytelling is as old as civilisation itself and there’s a good reason why it’s still integral to the way we communicate today. Our brains are wired for stories because they help us to experience information rather than just consume it. A great story helps people to process the information you’re sharing and more importantly it helps them to remember that information.

We are often guilty of taking it for granted that the wider organisation fully understands our vision. There is often a disconnect between what happens in the board room and how those decisions, plans and strategies relate to the individual employee. As board directors, we should be able to tell an engaging and relevant story about our organisation, where we’re going and our plans to get there. Ideally, we could tell this story to a shareholder, and they would understand what we’re talking about. Simple doesn’t mean easy, it means memorable and repeatable. And one in which shareholders can tell the same story as advocates for our companies.

By having a clearly articulated, memorable and repeatable vision, the line of sight within an organisation is greatly improved. Individuals see their role as part of a bigger picture, and they understand how their contributions are integral to the success of an organisation’s growth strategy.

If we are to lead, influence and inspire change as board members, we must challenge ourselves to remember that behind every data point, KPI, statistic and report are the humans leading and working in the business. If we can communicate our vision in a way the connects with people [3], that makes complex ideas relevant, that engages their curiosity and gives them a greater purpose behind their role in the strategy, we stand a far greater chance of support and buy-in.

4. Establish a Meaningful Monitoring Strategy for Long-term Success

While measuring success seems obvious, growth strategies are often big, lofty visions without clear actionable steps, achievable milestones or a tangible idea of what success looks like. It’s all well and good to have a well-defined growth strategy incorporating digital technologies, but how do you measure and monitor success? Start with the basic notion that you can’t improve what you don’t measure. Therefore, a digital business innovation strategy must have specific, well-defined and measurable outcomes. 

Strategic performance measures should be developed together by the board and executives so that everyone agrees on what needs to be monitored, how KPIs will be measured, and what success looks like long-term [4]. By working with the executive team to develop a monitoring strategy, it will help ensure that everyone has buy-in on the digital business innovation strategy and is invested in and committed from the outset. However, if the board focuses only on individual data points and operational details, instead of long-term trends and continuous improvement over time, we’re at risk of stifling innovation and creativity within an organisation.

Developing a straightforward, execution implementation plan that breaks down responsibilities, resources, and metrics from the beginning will aid in establishing clear KPIs. There should also be clear markers of go/no-go points concerning specific initiatives in your digital business innovation strategy. Ask the questions:

·       What are we willing to invest? 

·       What does success look like at point a), b)…? 

·       At what point do we terminate a project?

·       How do we know when the project is actually completed, and transitioned into new digital business models, services or products?

It’s also important for us to remember that as board members we are responsible for the success of an organisation over time. We can’t get stuck in the day-to-day details of implementing or managing a digital business innovation strategy. That’s not our roles. It is the responsibility of the executive team. Growth strategies through digital innovation are a long game, so our role as board members is to remain focused on where we are trying to go, while remaining across the details of how our organisation gets there.

References

[1] PWC UK Business Advisory Services: Strategy, Planning and Monitoring [https://www.pwc.is/en/assets/document/strategy_p_.pdf]

[2] M. Pinder: How to create an innovation strategy that translates to the operational team level, December 2019 [https://www.boardofinnovation.com/blog/how-to-create-an-innovation-strategy-that-translates-to-the-operational-team-level/]

[3] D. Borba: Design thinking: A manual for innovation, June 2016 [https://demianborba.medium.com/design-thinking-a-manual-for-innovation-e0576b34eff6]

[4] S. Barr: How Boards Should and Can Use Measurement for Governance, October 2019 [https://www.staceybarr.com/measure-up/how-boards-should-and-can-use-measurement-for-governance/]

Acknowledgement 

I would like to thank Prof Dian TjondronegoroIan Mason and Dr Brenton Hamdorf for their input and valued feedback. 

Gary Morgan is an experienced board director, chief executive, consultant and advisor. He is a fellow of the Governance Institute of Australia, adjunct industry fellow at Griffith University Department of Business Strategy and Innovation, and innovator in residence at the University of New England SMART Region Incubator. Gary has co-authored papers and reports that have been published in leading entrepreneurship and medical journals and presented at international conferences.