Board of Commissioners needs data tutoring
In this era of ones and zeros, organizations cannot function without knowledge, vision, and leadership in the fields of data and technology. That applies to the organization’s directors, but also to their superiors: the Board of Commissioners. A Board of Commissioners without tech knowledge or experience with data-driven earning models is out of date and presents a threat to the organization’s continuity.
Anno 2018 you should be able to expect a Board of Commissioners to be able to appoint a team of directors with the competencies needed to do business in the digital era. It would be impossible to fulfill this crucial HR role without understanding the impact of technologies such as machine learning on the business model – not to mention valuing strategy, investments, and risks. (Dutch link) Such an understanding is nonetheless often a blind spot to many boards of commissioners. Every commissioner needs to have sufficient financial knowledge to comprehend the company’s financial reports. So it should also be a logical requirement that he or she has a sufficient understanding of the culture, competencies, earning models, and work methods that characterize a data-driven organization.
The fall of OAD Reizen is an excellent example of what can go wrong when a board of commissioners lacks any form of technological expertise or affinity with data. In his novella ‘Enkele reis Holten’ (Dutch link: One-way to Holten), FD journalist Job Woudt describes how the company repeatedly responds too late to new developments, such as booking travel via the Internet. The Board of Commissioners of OAD consisted of the owner, the former financial director, and commissioners from financial and legal backgrounds. In a sector that has dramatically changed as a result of digitalization (Dutch link), that was an unfortunate combination, to say the least.
Some Dutch organizations provide a good example of how things should be done. Wolters Kluwer, for example, has made an amazing transformation over the past 15 years. The former provider of printed information has become a pioneering digital player, which earns more than 85 percent of its revenue from its digital products. With the appointment of IBM Managing Director Jeannet Horan and Fidelma Russo, computer scientist and Senior Vice President of EMC, Wolters Kluwer has embedded digital business in its Board of Commissioners. And that effort has undoubtedly borne fruit. At Philips, the Board of Commissioners and the entire organization are undergoing a vital transformation. In addition to several commissioners from medical backgrounds, the Board of Commissioners has recently added Neelam Dhawan CEO of HP India and former Managing Director of Microsoft India.
The Dutch business community is currently facing murderous competition, mainly from the United States and China. Organizations would therefore do well to follow the above-mentioned examples. A logical first step would be to appoint at least one commissioner with relevant knowledge and experience in the field of data-driven (Dutch link) business models and transformation processes. Step two would be to look beyond the traditional ‘mature’ commissioners, as Blikverruimers advocates: the fresh perspectives offered by young ‘born digitals’, who have a natural affinity with technology, would give a huge stimulus to any board of directors. Step three would be to organize expertise in this area into a committee within the board of commissioners, as is currently the case for issues such as compensation, appointments, and auditing. This committee of at least two members would advise the other commissioners and prepare the board’s decisions on digital initiatives.
Additionally, commissioners without a direct affinity or experience with the application of data and technology should actively expand their knowledge in these areas. Executive master classes designed especially for administrators would be an ideal solution for this purpose. The same applies to ‘reverse mentoring’, in which an older employee undergoes a digital apprenticeship with a younger colleague. Finally, commissioners should regularly take a close look behind the scenes of their own organization. These visits are crucial in order to better understand what the organization is working on, and how it can adapt to changes in the market. Following these steps can, and should, lift the Board of Commissioners’ technological expertise to a higher level. And that is essential for every organization that doesn’t want to be left behind by the competition and new entries to the market.
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