Boards are looking beyond their own sector to build insight and understanding

by | Mar 22 2022

On more enlightened, broader thinking boards there is an increased interest amongst directors to look beyond their specific industry and embrace a cross-sector perspective.

Leaders are increasingly asking “How do companies in related, even if non-competitive, spaces address innovation and disruption?” and “What should we know about what’s going on in adjacent spaces that will inform us about our own business?”

This new interest in what we can learn from each other is becoming the clarion call for boards. It is also reshaping the composition of many, as companies seek expertise in areas that initially seem only tangentially related to the business at hand.

If you are a diverse thinking board director who comes from a customer focussed, marketing and communications career, as I do, this is our natural way of approaching a challenge and about finding new paths, forging innovative product opportunities and changing the game, particularly if you’re wanting to build a “lighthouse identity”.

What’s that? Creating a Lighthouse Identity is about projecting a clear, purposeful and intense view of the world to customers, until they take notice, even if they are not looking for you. This same logic can apply to attracting shareholders, investors and capital.

It is also crucial as the business seeks to develop the strategies required to deliver commercial advantage for global and local brands as well as organisations.

With a laser-sharp focus on the commercial realities facing today’s business leaders and marketers across all media from traditional to digital, board directors need to think differently and seek to support brands and businesses to build and execute programs that deliver clear customer satisfaction, flowing into financial outcomes.

To this end, a sharper intent on diversifying and supplementing the traditional boardroom skills and backgrounds with executives and directors who come armed with skills that stem from less commonly appointed backgrounds will enable outside the box thinking and more successful, future-focussed orientation for the business.

In the recent Deloitte and 30% Club report titled “Bold moves in the Boardroom” there is strong and necessary focus on boards driving a new operating environment concluding that this also requires greater diversity of thinking to better respond to risks and maximise opportunities.

In this report, “many of the directors interviewed suggested that in addition to searching for former CEOs and CFOs in these deeper pools of talent, boards should include a broader group of directors. These directors will enable boards to access a more diverse set of technical capabilities, such as investor and government relations, regulation, marketing, sustainability, organisational development and digital, as well as manifesting the requisite underlying core skills and traits”.

For example the discussion around needing a digital director. What does this actually mean?

Directors with profiles from the growth and customer side of an organisation also bring an operational lens to discussions about digital, particularly in relation to capital investments, cultural change and the relevancy of existing technology systems to M&A.

While boards may have traditionally been more hands-off on such operational issues, today they are seen as critical to the success of digital transformation. It doesn’t necessarily mean you have to have been a CTO or worked in a wholly digital business.

So, why does that drive every current brief? What it should mean is that you understand the strategic use of digital, the tools and experiences customers may desire and the processes through which it can be implemented to transform or evolve your business. It’s knowing what to ask.

At the board we are not ‘doing the digital’, we are guiding, probing, suggesting and querying. It requires a passion for, and knowledge of, digital which is another form of marketing to today’s customers. It is not technical and digital corporate environment skills only. Every business today has embraced digital in some fashion so the description alone is becoming a little narrow and misses the breadth behind the skills and the number of people who can deliver this, from a business leader or director perspective.

In the “Digital expertise in the boardroom – Delivering the right impact” report by Spencer Stuart it states “When we talk about digital, we’re not just talking about websites, mobile sites or data, what we’re actually talking about are the tools and mindset and culture that digital brings, and that’s the transformation piece,” observed Rebecca Miskin, digital strategy director for Hearst Magazines UK and a non-executive director of Centaur Media.

Beyond the relevant digital expertise, a director bringing broad-based business acumen and preferably hands-on commercial experience at a profitable company is likely to be much more effective in the boardroom. A pure technologist, product or strategy expert or chief digital officer may be helpful in pushing the company to leverage social networks or to move quickly into digital content, for example, but may lack the business experience to really translate these initiatives into the broader strategy of the business.

Where to next?

Combining those insights and looking to the future, directors in consistently flagged the need for deeper knowledge of the environment, sustainability and climate change domain including as it relates to social license to operate, workforce management and organisational culture issues. They also highlighted the value of directors with digital fluency and digital transformation experience, as well those who hail from a contrasting industry and therefore bring analogous thinking and insights. For others, the focus was on the benefit derived from directors who tap into cutting edge knowledge flows emanating from their global networks, as well as their experience working in diverse global markets.

All of these findings play into the premise that we need to be thinking differently and to bring people and challenges and questions forward that enable directors to ultimately ensure their organisation builds a lasting lighthouse identity for customers and subsequently all other stakeholders, resulting in suitable financial and social outcomes.