Directing digital transformation from the boardroom
Often lost in the discussion regarding credit union digital transformation is the critical issue of board leadership. To ensure the ongoing success of the credit union the board of directors needs to think digitally — understanding the possibilities and pervasive impact of contemporary digital technology. To effectively direct executives, board members must be familiar with and able to apply knowledge understood as essential to the C-Suite management of this technology. And to promote ongoing success, board members must expand their oversight role to match the changing needs of their digitally driven organizations.
Board members need to know how to assess and prioritize the digital, mobile and data analysis opportunities available to the institution. They need to apply proprietary, public and third-party data sources to the analysis. They need to understand what it means to build or buy tools to perform the analysis. As well, they need to learn how best to position the credit union to be a learning organization capable of predictive and prescriptive decision-making and action. In other words, credit union leaders need to prepare their boards to lead these institutions into the digital future.
Most of us agree that providing a premium digital experience is essential today and that we must put digital and mobile initiatives at the top of the priority list if we are to remain relevant. But successful digital transformation that promotes relevance requires involvement from the entire organization and only the board of directors can provide the level of vision, focus and support needed to ensure full organizational effort.
The board cannot simply hire C-Suite management and relinquish its responsibility for identifying the digital direction and measuring the organization’s success.
Start with vision
Digital transformation starts with vision; however, as the people at McKinsey have written, “it is not a digital vision, but rather a vision for the organization in the digital age. The distinction is critical.”
The credit union’s board of directors must travel down the trail of digital transformation in an ongoing effort to provide digital leadership to ensure that the organization continues to promote adaptation and innovation. They can start by assessing their readiness for digital leadership.
- Is the board open to discussing technology?
Board members must comprehend the capabilities of technological investments, and openly encourage workplace innovation. While your CTO or CIO may serve as the subject matter experts, your board should be capable of discussing the implications of IT investments, strategies and opportunities.
- Does the board understand technology?
Your board members should understand what resources are needed to create and manage digital services for the long-term that are profitable for the credit union beyond the initial transaction.
- Is there a digital culture at a board level?
A collaborative culture must exist within the C-suite, and between the C-suite and the board. Digital markets are ever-evolving, and agility is required in order to survive. The board must be ready and willing to work with the C-suite to make quick decisions, take risks and innovate.
Then, Transform the Board’s Role
Accepting the need for the credit union board to tackle technology and digital transformation issues as critical elements of organizational success, then assessing the board’s current abilities to do so are important first steps to building a leadership culture that can drive needed change in the organization. But this is not enough. With this knowledge in hand, the credit union should look, as well, to build out an expanded leadership model that promotes the needed “speed, agility, and structure” to effect timely change, and institutionalize the culture that drives continued transformation; for without “speed, agility and structure” the credit union will not act and react fast enough to remain relevant. The digital world simply forces us to move quicker than ever before.
The traditional credit union board purview has focused on providing governance over strategy and its execution, as well as succession planning and the organization’s transitions between C-Suite leaders. Today, however, the board needs to step up and lead digital transformation by expanding its leadership purview, to include: strategy, organizational execution, transformation, and transition.
As always, the board of directors must be responsible for ensuring the credit union is working toward a strategic vision and plan that promotes continued well-being and success. As always, the board must be responsible for ensuring the CEO and her team is successfully executing the plan.
But, today, the board must move beyond a “transition role” focused on ensuring successful C-suite transitions. Today, the board of directors must also tackle the role of leading the credit union’s “transformation” and then create a “transition” role focused on both the C-suite and the board’s evolution – an evolution that must be focused on both innovation in digital technologies and the organizational capabilities to capture them.
Today, digital technology challenges the credit union board of directors to add to its knowledge and then add to its role, to become fluent in “digital” and then to organize the credit union to become agile enough to stay relevant in the market.