Boards need to put technology and innovation at the top of their agendas to ensure they stay relevant, says advisor, director and entrepreneur.
“China is more digitalised than many people think. According to McKinsey Global Institute (August 2017), it is now the world’s largest e-commerce market (40 per cent of value of worldwide transactions – up from one per cent 10 years ago).
One third of the 262 “unicorns” (startups worth more than $1 billion) are Chinese, commanding 43 per cent of global value of these companies.
China is now in the top three nations for data analytics, AI, robotics and automation, autonomous vehicles and virtual reality. With more than 750 million internet users (greater than the US and Europe combined), China’s influence and growth will directly a effect the future of Australian businesses. Directors are now more aware of the impact of technology and there is more “airplay” of the disruption of traditional businesses and industries (like Amazon or Elon Musk’s battery challenge).
That said, there remains a dangerous sense of complacency in some boardrooms with prevailing attitudes like “we’ll be all right in the end”, “we’ll muddle through”, “let’s see what others do” or, worse, “it’ll be somebody else’s problem”.
People defend the status quo or simply bury their heads in the sand — not a great strategy — but the worst outcome is for the board to conduct another feasibility or situational assessment report.
Anecdotally, commitment to the digital agenda is low
The anecdotal view is that the current level of commitment to the digital agenda is low. Most boards still do not have this as a priority. They tend to have a discussion on innovation as an “event”. Typically, board agendas still only cover the standard agenda items — finance, legal, marketing/sales, HR, occupational health and safety. In order for businesses to move the dial, boards in Australia need to have innovation/technology/ disruption as a standard agenda item for discussion at every board meeting. They need to know whether their business is in a highly volatile industry.
They need to ask what timeline they have? How resilient is their business? We need to establish the empirical evidence to back this up.
Leadership by the chair is critical. Where the chair or an in influential or senior director is digitally active, the board mindset changes to recognise the challenges and adopt countermeasures. We should not be fearful — instead, we should start to think about the immediate steps we can take to adapt. We need to loosen up our thinking to address these issues.”
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