The following is a selection from Corporate Board Member’s annual Boardroom Summit, which brought directors from America’s leading companies together to share tips, insights and strategies on the most pressing issues of the day.
Harnessing technology comes naturally to born-digital companies founded on their capabilities, while established companies often struggle to get in on the digital revolution. But traditional businesses can up their game by learning from their tech-centric peers, says Fred Crawford, senior vice chair of AlixPartners, citing research his company did analyzing this dichotomy. Crawford and fellow panelists Cory Eaves, operating partner for General Atlantic; Reggie Van Lee, chief transformation officer for the Carlyle Group, and Angela Zutavern, managing director of AI for AlixPartners, outline lessons for leveraging technology to turbocharge growth.
1. Don’t Be Afraid to Experiment.
Cory Eaves: “Digital native companies often have a culture around test and learn. They experiment, gather data, get customer preferences and iterate quickly. That’s something I would encourage more traditional companies to try. If you’re launching a new technology product or a new service over the Internet, you can experiment. Customers are used to that and sort of expect it.”
Reggie Van Lee: “In traditional companies, you do not fail. It means you lose your job. So, the notion of fast failing, trying stuff that doesn’t work is not the culture. Whereas born-digital cultures are very experimental, and that’s fine. That mentality that you must succeed, you cannot fail, is something that really impedes traditional companies.”
2. Get the Right People.
Van Lee: “First, digital transformation is a full-time job. You can’t take a smart person and add this onto his or her responsibilities. Even in a small company, but certainly in a large company, you need a full-time athlete focused on it. Second, it is not IT, especially for large companies. You need someone who has customer-facing insight to really drive it because that’s what makes it successful. Third, this talent is seldom home-grown. So, oftentimes you have to go outside to get that resource, and sometimes even out of industry.”
3. Be Problem-Centric.
Angela Zutavern: “The best thing that boards can do is look for where the biggest opportunities are, either on the revenue or customer side or with cost savings and efficiency. Start with the business problem and then figure out what technologies would best apply to that. For example, with AI, we’re seeing a lot of traction in applications where companies need to forecast customer demand or the supply chain. Old methods rely on using several years of historical data, which is no longer relevant for many companies, whereas AI methods actually allow you to make more accurate predictions based on a small amount of data that’s more recent and updated more often.”
Van Lee: “You need to be as laser-focused as you can about how a technology such as AI will add value in what you’re doing as opposed to a ‘boil the ocean’ sort of approach.”
4. Seek Out the Shortcuts
Eaves: “People might be surprised at how quickly some of these AI use cases and technologies are becoming commoditized. Companies don’t necessarily need to invent AI and machine learning applications [from scratch]. Once they’re clear on the business problem that they’re trying to solve, there are increasingly off-the-shelf solutions that companies can deploy.”
5. Make it a Company-Wide Priority.
Van Lee: “You need a change management approach. Find advocates, pick strong use cases, build on success, communicate it widely, begin to get more people on board because of the people that succeeded. I find that when people don’t do that combination or all of those things, in many cases, there is a problem.”
6. Vet Your Board Composition.
Eaves: “This is not a comfort zone for some board members, so they gravitate toward focusing on risk management. I think the more valuable board members for our companies are the ones who can think about digital on the top line. They can help think about digital to reach new customers, to enter new markets, to help grow the revenue line of the business. As investors, we look for board members who, of course, can pay attention to the risk side but can also help use technology to grow the businesses.”