Sunday, October 18, 2015

A Heterogeneous Board

Heterogeneous BoDs with independent thinking enforce governance, and diversity strengthens creativity.

There is no question that businesses need digital leadership in today's boardrooms, with “VUCA” characteristics of business dynamic, overloading information, and globalization as the new normal of business expansion, all of these bring the significant opportunities and responsibilities for the new breed of digital BoDs, and it is crucial to brainstorm on how to build a highly effective board with a heterogeneous viewpoint, and right mixing of Individualism and collectivism nature, to set the tone of directorship with innovation and influence.


The most important aspect of building a heterogeneous board is to embrace the diversity of worldview with the cognitive difference - crucial to avoiding groupthink - Boards that are too homogenous are at much higher risk of making poor decisions or not asking the questions that need to be asked - there are plenty of examples of this. A heterogeneous board is composed of the BoDs with a cognitive difference, diverse background, capabilities, skills, and education. A heterogeneous Board is couched in terms of diversity of worldview and cognitive difference rather than the traditional understanding of diversity (gender, races, etc). It is so important to seek out different voices. The research supports the need to do this and the success that follows. It is scary if you are looking for validation and with the diverse feedback, you get disagreement or divergent thought. But that is exactly what leads to a better outcome. It is the leadership for. We should no longer be discussing/debating the benefits of diversity; there is ample research that demonstrates the business case and the societal case for increasing diversity on Boards. The conversation should now be focused on what the 'real' obstacles are, and the actions that are expected in order to move the dial and embrace the new hybrid word - "inclusiversity.”


The board has to pay more attention to the culture, which will "eat the strategy" otherwise." What comes first, strategy or culture?" Many pick strategy; the company needs to determine its direction, and then assure that the culture supports that strategy. Many of us also like Drucker's witty quote: Culture eats strategy for breakfast! It means the way things are done and allowed to be done every day. It is reflected and influenced by policies, practices, rewards, and incentives. often, executives and the board assume that these things are correct, but employees know they are not and can tell you what gets in the way. When culture is "working" it can unlock powerful synergies that drive performance..... especially in today's world that relies so much on collaboration and teamwork. The spirit comes from the top, Board should set the culture tone. Many say boards do not pay enough attention to the culture within the company. since the culture can undermine strategy, they certainly should be concerned and seek assurance that the culture is aligned with the strategy and that the values that form the foundation of the couture are aligned with the expectations of customers.


Heterogeneous BoDs with independent thinking enforce governance, and diversity strengthens creativity: Diverse candidates have a lesser chance of being interlocked, over boarded, over tenured, and socially, management captured. These are a few examples of factors compromising board independence. The multi-functionality needed today to leaders imposes modern professionals more flexible, less tied to standards. One of the biggest challenges in this complex, multi-polar world is the fact that we need different perspectives, different knowledge, and different ways to solve a problem. Sometimes there is not "one" answer: there are some, or many: that is why what is first of all needed is to think as a team. It takes a confident person to be able to surround yourself with people who may share a different opinion than you. It takes a lot of work to be ready to defend your stance. Ultimately it is best for the boardroom to give a 360 viewpoint and execute the strategy and avoid groupthink. It takes mentors to help people understand their role on the board. The high-quality board leadership has very characteristics such as multi-dimensional intelligence, openness, and wisdom.


The board needs diversity, or even more crucially, cognitive difference, to provide a perspective that goes beyond the gaps in board discussion. They need to incorporate their unique viewpoint on people, innovation, CSR, etc into their solid knowledge of overall business & technology. Until then, they will be seen as the 'diversity' contributor- the ones who fill in the gaps and make leadership difference.

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