Cheryl Hayman FAICD
ASX Non-Executive Director | Chair Remuneration & Nomination Committee | Marketing | Digital | Communications | Growth & Transforation | Global | Customer Engagement | Mentor
As 2023 kicks off with a post-COVID glow, we can’t forget that consumers are facing inflationary pressures, a possible global recession and continuing supply chain challenges. As well as an increasingly changing and difficult online and cyber environment.
If we thought the pressure to accelerate digital transformation was letting up, we were wrong.
Boards and senior leaders are facing a full and fast next evolution of discussions alongside the associated programmes of work started during the past two years, but with even more energy, complexity and resources required.
According to one study, “Customer experience and developing new products remain top board priorities, and 46 percent of transformation plans include new products, services, or revenue models.
“Leaders might read the financial trends and focus 2023 on cost-cutting initiatives such as automation programs, modernising infrastructure, or platform consolidations. But transformations must go beyond cost efficiencies and tactical customer experience improvements.
Digital transformation programs should include developing new products, growing digital sales channels, and delivering new artificial intelligence (AI) and machine learning (ML) capabilities, and these are generally multi-year investments.”
These trends suggest a challenging year for technology and Board leaders, balancing the need for speed and safety coupled with growth and efficiency to ensure we are leading transformation while attempting to manage and avoid longer-term business and brand disruption.
Innovation in uncertain times
We must resist the desire to undertake cost-cutting measures without balancing the need for innovation and new initiatives. Uncertain economic and geo-political environments often turn the focus to the former and neglect the latter, attempting to deliver a stronger bottom-line result.
This has historically been a reasonably successful short-term strategy, but today the long-term comes quickly and the investment side of the balance sheet must continue to grow in unison with the desire to manage costs.
As a Remuneration Committee Chair, addressing the goals and metrics that our C-suite leaders can relate to is about framing the solution around decreasing operating costs, enhancing business efficiency and providing for a buoyant and attractive customer experience and deal velocity. It must also enable a safe, secure and attractive employee environment.
Retention of employees and the evolution of DevOps to incorporate ways of working that enable agility and flexibility, while Boards seek to measure outcomes and performance will require a focus on AI and ML.
Transformation investment and a digital focus will be further scrutinised by shareholder desire with particular queries remaining around the environmental and social elements of ESG.
While digital transformation presents unique opportunities for organisations to innovate and grow, it also forces critical thinking and potentially reimagining aspects that are considered core to the business.
A focus on change management
This is why in 2023, as directors, we need to ensure we direct a strong change management culture. This is vital for any organisation’s success and involves planning each key transformative project starting with the identification of the root causes of business issues and building relationships with all stakeholders and employees to get understanding, buy-in and ensure successful outcomes.
At the board table, we must seek the most intuitive, integrated systems. We must know enough to ask the questions and to scrutinise the answers. We must be brave enough to invest. We must be certain enough to ensure tangible deliverables that can be reported.
Never have directors needed to be more agile with a willingness to embrace change. Agility means taking advantage of opportunities when they arise. Directors having available ad-hoc time to be consulted may mean a greater time requirement than has been common practice till now.
The contemporary director should have the capacity and willingness to lean into this agility and be unafraid of new processes and tools, or changing up traditional practices to new ones.
The creation of a digital change management team of high performers is one option for a board to discuss with leadership. This team can help craft and create a vision for the digital transformation process that aligns with business goals and has significant buying as it is created by those who are connected to the inner workings of the organisation. This will allow the business to take a proactive approach to digital transformation initiatives that focus on the people aspect of change.
At the end of the day, our transformation processes should align directly with core business goals. It should empower employees to be better at their job functions, make the customer experience better with more intuitive systems that solve more customer problems and drive more revenue for the organisation.
The imperative of the digital agenda for all boards in 2023, combined with uncertain economic and operating environments, will make this year one of significant evolution for many boards and companies.
The boards to watch will be the ones that navigate these conditions, rather than continue business as usual until the uncertainty passes and the business and its leaders feel more comfortable prioritising digital innovation.
This article first appeared on Digital Nation
- Cheryl Hayman is an independent non-executive director on listed boards Ai Media, Beston Global Foods and HNG Ltd as well as unlisted CAANZ.
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