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Impression PIT Café, May 17 at Wehkamp, Zwolle

HOW DIGITALIZATION CHANGES BOARDWORK

On the 17th of may PIT hosted an PIT café on Digitalization and how it changes board work. We were guests at Wehkamp distribution centre, with Piet Coelewij as our Wehkamp host. PIT’s report you will find below, Liselotte Engstam and Katy Caroan from Digoshen also made an impression, that you can find following this link.

PIT is proudly looking back on our first international PIT-café. With very inspiring talks from Piet Coelewij en Liselotte Hägertz Engstam on the specific challenges of digitalization for (executive and supervisory) boards. How to deal with constant change and how to foresee a future that lies beyond what we can see today? How do we recognize the difference between optimization and disruption? Un-learning and re-learning as the new critical skills for board members. If someone says he/she is a digital expert, he/she is definitely not.

Wehkamp, a true pioneer when it comes to digital transformation, was our host for this PIT café.

CEO Piet Coelewij shared his personal observations on the topic, both from his perspective as a digitally savvy executive and from his experiences as a non-executive director. Also, according to the survey of Digoshen, Piet is close to being a digital business leader. Being more active personally on social media would make it complete.
He started his presentation by exploring Disruption versus Optimization, with the example of SMS and Whatsapp.
It’s also about time and speed; if you don’t see it on time, it will kill you (although if you see it on time, it’s not sure you’ll win…). He then shared his thoughts, summarized on these slides:

What is digital?
Customer————- Real time knowledge
Operations————Real time KPI
Value chain————Direct
Reach——————-Global, viral, 1 on 1
Marketing————–Personal at scale
Innovation————-Constant experimentation
What is digital?
Customer obsessed
(accelerating) innovation race
Knowledge (data) based
Fluid organization
Role of Non-Executive Director
Ask the right questions (culture, strategy, risk, ambition)
Help executives to see reality (look under the top of the iceberg)
Help identify, assess executive talent
Network and benchmark
What I learned
Behave like a beginner
Un-learning as important as learning
70% is people and culture
Transparency is key

The main question for Piet is: What is digital savvy? Using technology to help to collect and to analyse information in a scalable way without boundaries. To get to know your customers on an intimate basis, constantly and in real time.
His regret is not to be born later…

Liselotte Engstam is the second speaker. She is co-founder of Digoshen, a company based in Stockholm and Silicon Valley that works closely with boards to help them embrace the opportunities digitization has to offer. Liselotte Engstam, who also acts as a non-executive director and start-up coach, shared her views on why she feels this topic belongs on the board’s agenda, how she thinks board work is changing because of digitalization and what the implications for board members are on a personal level.
Liselotte starts by emphasizing the drop in lifetime of organisation since the fifties. The speed and scale size changes exponentially.
Boards asks themselves: How will I keep updated? One way is to work with start-ups. And board members have to keep re-learning; what we have learned as students is not enough anymore. And stay flexible: you can’t think of everything yourself.
Instead of focusing on Control/Efficiency, boards  should move to a future vision. So not be satisfied with what’s happening now but help the organisation with their future.
She reports on the results of the survey, executed by PIT-partners in the Digoshen research. It gives an indication of the digital position of both the organisation and personally.
Most of the partners are Mobilizers, they still have to develop their digital business/leadership capability further.

Only one third of the non-executives thinks digitalisation is a strategic issue.
Although customers/consumers are more digital than the organisation.
She pleas to align actions: dare to move on, it is more risky but also more fun.
Start a culture where it is okay to try and follow the experiments (not just operational)
Social media gives a face to the CEO.
Follow an online course at Coursera.com about learning.
She ends with a quote from Gandhi: “Live as if you were to die tomorrow. Learn as if you were to live forever.”

Plenary sharing of highlights per table

  1. Digitalization requires different people on the supervisory board

More and more you read about the need for digital natives or ICT specialist on the board – but is that really the answer? Or should all board members be aware of how digitalization could potentially impact their organisation? What can you personally do to inspire change?
Chaired by Piet Coelewij, CEO Wehkamp and non-executive director and by Katy Caroan, CEO Digoshen

Some conclusions:

Create awareness about what’s next, take out.

Organise a roundtable to inspire

Also use testing grounds on board-level

Social media is a tool, not a purpose

Have a digtal savvy on board with the right level of diverse knowledge. Take care that the others don’t stop thinking. Cultural is important for digital.

Beware of the self-acclaimed digital expert because he/she is definitely not one.

Start ‘un-learning’, especially process-oriented thinking

 

  1. The future of board work

In the digital world, organisations work in a different way. No more 5 year plans that can be approved by the supervisory boards, but constantly changing actions by agile organisations that align behind a shared purpose. Less focus on thinking and more fast-failing and co-creation with customers and other external stakeholders. What implications does this have for board work?

Chaired by Liselotte Engstam, Chairman of the Board a swedish researchorganisation Digoshen and
a non-executive director

Some notes from the table discussion:

What are doing now as a board? Are you using any platform for data sharing or as a collaboration-tool? F.e. Dropbox.

Different digital DNA in a board, also with digital illiterates.

Chairman is key! For the right planning of the agenda and creating meaningful connections. Reflection on the board meeting, without the CEO

Budget and time for education.

Role models, connect with other minds.

Be Lazy, Dumb and Homeless (focus only on relevant matters, no biases but ask questions and be independent)

Spend more time on the future.

 

  1. Can the same board deal with ‘exploit’ and ‘explore’?

“Every organisation needs to do 2 things, exploit what is and create what is not yet” according to business and innovation gurus Ridderstråle and Nordstrom. How do you deal with the different approaches ‘exploit’ and ‘explore’ require at the Supervisory Board level? Do you need a separate innovation committee? Or even a different disruption board – as suggested by Belgian entrepreneur Peter Hinssen?

Chaired by Fennemiek Gommer, Caracta, strategy & innovation specialist, non-executive director in youth care

Reflection of their discussion:

Most of us agreed that our boards spend more time looking backwards than forwards. Traditionally, we spend one or two days on strategy in an off-site meeting, but shouldn’t the balance in our regular meetings change as well? 50/50 as Liselotte suggested, or maybe 60/40 which would still be more future oriented than we are today…

It’s up to the executive board (EB) to take the lead in strategy development and innovation, but what if they’re not doing their job and/or don’t have the right people on board either? We discussed how reactive – pro-active the sounding board role of the supervisory board (SB) should be. Can they inspire the EB? A research was quoted that showed that many EB’s lack inspiration from their SB – let’s give them more inspiration!

And what does this mean for the type of people we have on boards? Examples were mentioned where digital natives or other ‘outsiders’ were asked on board, but didn’t survive. Can be boardroom dynamics, but can also be because they lacked interest in the looking back/control/risk management part. This started a debate on the importance of the chair, who can make this work (or not).

However, some people are not fit to be on boards but we’d still very much like to involve them. Could the strategy committee – like the audit committee – have contact with outsiders? Let them prep the discussion in the board. Or do you want to vary the type of outsiders per subject as one of us had experience with? A theme based advisory board, with some regular members and some that are invited depending on the subject. The EB and SB can join those discussions and get inspired. Based on demand – which got us talking about pop-up boards. The advantage of the strategy committee over an advisory board is that it’s part of the formal governance structure, advice can be ignored…

 

  1. Digital transformation in the public sector

Today, many of the ‘digital’ start-ups that have disrupted their industry are private companies such as Uber, AirBnB and Netflix. Will it be the semi-public sector tomorrow? Or should the focus be on ICT as an operational support system?

Chaired by Ilse Vegter, digital marketer, non-executive director in the public housing sector

No urgency for digitization in the non-profit
At this table on digitalization and the public sector, various discussions and suggestions from a commercial angle turn up, thanks to a participant from that area. Digitalization in the non-profit sector does not seem to appear at the top of the agenda. Digitalization seems to be perceived as pure ICT: and thus part of business management and not of strategic planning. A plea for supplementing the general profile of the Supervisory Board with basic knowledge in the field of digitization doesn’t even make it with the participants in this discussion.

What makes it the way it is?
Firstly, the public sector seems to be too rigid to innovate. Customers in the public sector often have no alternative. For example, think of tenants of a social housing project. This customer might want to have a low rent and be able to make flexible arrangements. Secondly, Management often has a background in their own sector, which leads to optimization, not to disruption and hardly to any innovation. Maybe an extra executive can help (an innovator!) In combination with one or two Supervisory Board members with an innovative profile (the Innovation Commissioner or the ‘Commissioner Digitalis’). Thirdly, public organizations have an aversion to risks and often think and act defensively. Innovating and experimenting is often not encouraged. No faults are permitted: because you are in the public eye and will be hold accountable (social money and/or social goals are involved).

How to change?
Explain the ambition and consciously raise money for experiments. Think outside of the box: what if we could start again? (thought experiment) Follow innovation and embrace technological developments. Consider working with innovative companies and the market, for example in the field of ICT. And in the context of innovation in supervision: add a fresh perspective from a different sector.

 

  1. When digital becomes human

Successful digitalization requires a user-centric approach: organisations truly need to become client focused. The client relation of the future is both digital and human as professor Steven van Belleghem from Vlerick business school explores in his book ‘when digital becomes human’: “boards underestimate the strategic value of human touch – do we agree? And how to supervise a high tech – high touch culture?”

Chaired by Anne Mieke Eggenkamp, Caracta, creativity & learning expert, non-executive director in the cultural sector

They discussed various topics concerning the human aspect of digitization:
– Ethical/moral aspects have to be taken into account in order not the be over-ruled by high tech culture.
– Bring yourself to the board as a team, in order to qualify for good decision making, considering a wholesome view on the impact of technological development.
– Unlearning: also as a board we must be prepared to face the considerable impact of new technology on our attitudes and behaviour.
– As a rule of thumb-guideline to evaluate technological innovation, consider the 3 C’s: be Curious about new development, use Common sense and face the Challenges. There’s even more C’s to consider: act with Care, let Creativity blossom, use Commitment and be Consistent in line with earlier policy decisions

After sharing these results, the discussions continued at the terrace with drinks and sunshine.
PIT is committed to follow up on this subject for non-executives, on the website and by live meet-ups.

We look forward to continue this discussion with the partners of PIT and with our new Scandinavian friends, Liselotte Hägertz Engstam and Katy Caroan. Thanks to PIT-partner Fennemiek Gommer for organizing this PIT-café and thanks to Wehkamp and Piet Coelewij for hosting this event and especially for offering us a fascinating guided tour through the Wehkamp distribution centre. For everybody who couldn’t join us:

Logistiek Service Centrum Zwolle from Dirk van den Bogaart on Vimeo.

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