A panel of experts at the recent ad:tech conference agreed that the dearth of “digital natives” in the driving seat of business is seriously hampering Australia’s digital innovation.
It’s not just CEOs’ lack of digital experience that is holding us back – there is an alarming absence of relevant digital experience on the boards of the leading listed companies right across the Asia-Pacific region.
There is little doubt that leadership is a key deciding factor in surviving and thriving in the 'digital tsunami'. Companies need to urgently assess their top ranks - and they should be uncompromising in their response.
Quantitative Research conducted by APD last year showed an alarming lack of relevant digital experience on the boards where you would expect it most.
Fewer than 10% of the non-executive directors of the Top 20 listed companies in Australia, New Zealand, Hong Kong and Singapore have deep digital experience. That figure drops to around 5% if you exclude telcos and tech companies from the list, as they are typically laden with digital natives.
Standing still is not an option. The relentless pace of technological change is now so great that even the original disruptors are now being disrupted – creating a minefield for any business.
Yet most boards are still stacked with people with legal, accounting, finance and other traditional skillsets.
Boards need to ask themselves: what do we need to do to ensure that this company doesn’t suffer the plight of Kodak, or get disrupted like Fairfax or Cabcharge? The potential erosion in shareholder wealth can be swift and merciless. Companies should ask themselves: what should we know that we don’t know? How do we find out what we are missing? How do we learn more?
Boards need to address their balance of skills urgently. Here are some five tips for addressing the challenge:
- Find a digital mentor or some digital natives who understand the environment and have strong opinions and experiences. There is no shame in appointing board members who can fill in your knowledge gaps, but make the appointment genuine.
- Review your sense of risk and return - it’s the delicate balancing act between saying something is too risky (or costly) and waking up to find that you have become irrelevant in five years’ time.
- Ask yourselves what business are we actually in? Disruptors aren’t always competitors, in fact they often come from an adjacent (left) field, and they tend to deliver a sideswipe that no one could have foreseen.
- Commit your board to take defensive or disruptive action. And to stay the course when the going gets rough (as it almost inevitably will) - not withdrawing funding at the first road bump.
- Recognise that the skills that drove your sales last decade won’t necessarily drive it going forward. Banish the silo and recognise that marketing, data and digital should together form a meshed skill ecosystem.
Roger Sharp is the chair of Asia-Pacific Digital (APD).