Each of us can look back and be baffled by how much change is possible in a short amount of time. Remember landlines? Flip phones? How about the BlackBerry? It’s human nature to be resistant to change: boards and corporate directors are no different. Maintaining the status quo is more comfortable than change. Especially because leading the change requires a straightforward vision, strong leadership, and clear communication. In the words of the cartoon Dilbert: “Change is good, you go first.”
But change is necessary for company growth and success. And the National Association of Corporate Directors is one organization that not only talks about change but gives board members and leaders the tools to help boards model and implement change. At NACD’s Global Board Leadership Summit this fall, we’ll discuss how we as board directors can embrace our leadership role, set a positive example, and encourage change.
Oversight Is No Longer Enough
Emerging technologies and new customer demands are now constant threats to established products and business models. These threats affect sustainable and profitable growth, but boards can counter these issues by continuously helping management to evolve their business models, investments, and skill sets.
Expectations of capitalism and acceptable corporate behaviors are also changing, forcing a better balance of achieving profits and having a positive societal impact. A good example is a company’s focus on reducing its environmental footprint. This means that we are now seeing the focus on shareholders shift to include all stakeholders, such as employees, suppliers, customers, and communities.
All this is part of taking an active role in creating the optimal organizational mission and culture. Changing our behavior, processes, and interactions from oversight and support to an active leadership model is crucial to ensure success in our evolving world.
Leading Change Is Necessary
External pressures, rapidly changing governance requirements, and differing stakeholder expectations are all good reasons to call for change.
Failure to change may jeopardize not only a company’s performance, but also its very survival. Poor performance impacts everyone, but proper board and director performance can create a competitive advantage that increases value for all stakeholders. Stagnation is the enemy and change will keep your organization sustainable and on the lookout to avoid pitfalls.
Necessary Board Components for Success
When I look back over my career as a board member, these four pieces are critical to effectively lead and enact change:
- Boards need to be comprised of directors who understand and have effectively led change management;
- A board’s culture of embracing change should be a model for the entire company;
- Board information and processes need to align with and support the new culture to achieve its goals; and
- A board’s composition should reflect and support its new evolving culture and behavioral design.
Key Takeaways to Remember
To start leading change in your boardroom, define and describe the mission, values, and culture that you want your company to embody. Boards should assess what the organization needs to retain and what aspects would be most beneficial to change.
Build off of the strengths in your company and initiate change management plans to achieve your new vision. This includes evaluating the current board composition, leadership and processes and taking action to make changes in a timely manner. Once initial changes have been made, continually assess progress towards your vision and course correct as needed. Don’t be afraid of needing to shift direction in the future.
If there’s one constant, it’s that change will always continue. It never stops. Change impacts all of us, and for boards and company leadership to be successful, effective change management should be a required element in the makeup of every board.
Like our cartoon friend Dilbert challenges us, are you ready to go first, lead, and create an inspiring vision for sustainable value creation for your constituencies? I’m looking forward to discussing change, the ever evolving transformation of our world and more at the 2018 Global Board Leaders’ Summit September 29 through October 2 in Washington, DC. Register now and join me there.
Martin Coyne is a director of EyeNuk. Coyne is the chair and founder of the CEO Learning Network and he is the chair emeritus of the National Association of Corporate Directors’ New Jersey Chapter.