Source | www.mckinsey.com | Celia Huber | Alex Sukharevsky | Rodney Zemmel
Few board directors would dispute the importance of digital and how it’s fundamentally reshaping the competitive landscape in almost every sector. But many of those we speak to are uncertain about what their role should be in helping senior management drive the digital transformations that businesses need to execute in order to survive.
In-depth discussions with dozens of board directors has helped shed some light on where boards can add value. What is emerging is a model where the core mandate of the board is unchanged but its scope for intervention on issues such as risk and competition is expanding. We see five things boards members can do to have the greatest impact.
Be clear about the implications of technology
The complexity and speed of change in digital and technology can make it difficult for board directors to focus on technology as a crucial strategic priority that can unlock new revenue and competitive advantage. The goal for the board isn’t to understand the technology but, rather, to understand its implications. Artificial intelligence (AI) is a good example. Because AI can provide a huge leap over standard approaches in terms of delivery speeds, costs, and quality—often by a factor of ten—companies can more quickly and cheaply test new markets, products, and business models. Emirates Team New Zealand’s America’s Cup sailing team, for example, used AI bots to test and refine designs through a process of reinforcement learning, speeding the team’s design process by a factor of ten.