Independent directors have long understood the importance of risk mitigation. Further, the best have exercised their fiduciary duties with great care through audit and compensation committees. However, the social, mobile and cloud technology revolutions are changing all that.
These new technologies have created new risks that corporate directors must understand if they intend to insure the future viability of their organizations.
With more than 1 billion customers using social media; with 2 billion employees, investors and partners carrying mobile devices; and with cloud technologies making headway in all enterprises, these technologies are about real business risks and opportunities.
In short, together, these technologies enable your customers to share their views of your organization’s products and services; your employees to comment on your culture and leadership; and your investors to communicate about your top and bottom line results.
Now I know that most corporate directors, institutional investors and CEOs do not fully appreciate these new technologies and their impact on every business process – including sales, marketing, hiring, training, investor relations and product development. Further, most boards would prefer if these new technologies were just for their children’s use (Facebook, Twitter, iCloud, iPhones and IPads). But they are not. Given this reality, here are three recommendations to insure your success:
- Recruit an Independent Director with knowledge in these technologies. Given the importance of these technologies to the success of your organization, not having these skills on your board is like not having independent directors with business, finance, accounting or legal skills. Further, delegating these capabilities to either outside consultants or the management team without a knowledgeable board member who can interpret today’s market in these areas is equally risky.
- Establish a strategy committee to insure your organization’s success. Almost every board that I speak with or counsel has audit and compensation committees, but very few have standing strategy committees. It is hard to imagine a board without an audit and compensation committee. However, in today’s connected world, it is even harder to imagine a board without a strategy committee reviewing management’s deployment of technologies to drive revenues and reduce costs.
- Focus on building your organizations’ customer and employee networks. We all are all witnessing the size and value of Facebook’s, LinkedIn’s, and Groupon’s customer networks. And for good reason. Facebook has created a customer population that now rivals the size of China and India. However, your organization has worked even harder and longer to build your customer network. But, my guess is that neither your board, nor your CEO, has real time information on who your customers are, what they buy and whom they know (e.g. their friends, family members or social network). The result: a very large and, therefore, blind spot in your operations.
Having spent the last decade building and investing in social media, open innovation and mobile companies that now manage 15,000 social networks for 350 leading brands, I can fully appreciate how Apple became the most valuable company in the world – by understanding the need of its customers, partners and employees to connect, collaborate and conduct commerce using these technologies.
The time has come for all organizations, and their corporate directors, to understand the power of their customers, employees, partners and investors and their ability to network using social, mobile and cloud technologies. In doing so, organizations will create unprecedented risks and rewards. If Shakespeare was alive today and an advisor to corporate boards, his advice would be: ‘To be or not to be, that is NOT the question? Whether ‘tis nobler (and therefore more valuable) to enable your customers and employees to network with each other and you, and by so doing, end a sea of troubles rather than by opposing them…that is the question!
The future of your organization’s customer loyalty, employee engagement, partner participation and investor commitment is dependent on the size, vitality and engagement of your networks’ engagement. ‘To network or not to network’ is your choice and responsibility as a corporate director and member of the board. Embrace these new technologies to insure that your enterprise achieves its full potential.