businessman working with new modern computer show social networkBoard seats are incredibly expensive real estate. Given that expense, do you have the right people in those seats? To drive the question to an even more fundamental level, are you framing the right challenges as you seek individuals to join your board of directors, so you do not base your board makeup on flawed assumptions?

I submit that the challenges facing boards today can only be met by directors who are “3D”—digitally savvy, well-versed in disruptive technology, and diverse in their mindset when it comes to stewardship.

Several interesting board choices have made the news, and they represent the new “3D” breed of director I’ve identified:

  • Instagram co founder Kevin Systrom has joined the board of Wal-Mart, Business Insider recently reported. Systrom is in his late twenties—unusually young to be invited to serve on an established brick-and-mortar company board. He’s never known a non-digital world and he’s already channeled that savvy to pioneer a disruptive technology. Instagram became #1 in the Apple App Store within 24 of launch on October 6, 2010.
  • Clara Shih joined the Starbucks board: she’s 31, female, of Asian heritage, and like Systrom, already a successful innovator. She developed Faceconnector, the first business application on Facebook, and has held positions at Google, Microsoft, and Salesforce.

We’re talking people with the right balance of experience, digital passion, focus, and central core competency to take the boards they join in new directions. From their pedigrees, Systrom and Shih will also bring the willingness to learn, listen and engage other board members, and the ability to influence other directors’ thinking and persuade their call to action. Watch these “3D” directors rock.

Why are boards beginning to show some signs of evolution away from “male, pale and stale”, as these examples indicate? Because they need to stop framing the wrong challenges, and basing their responses on flawed assumptions about the threats and challenges in the environment.

Digital technologies are poised to dramatically challenge nearly every business model. I’ve seen too many boards try to make up for lost time in understanding of digital technology by bringing in a subject matter expert (or a favorite local one – digital advisors) to work with the board for an hour or two; in my opinion, that solution is barely able to teach vocabulary, much less instill expertise.

Only a digital-savvy board can effectively focus on disruption, and respond with innovation that disrupts the disruptors. Consider one of the major disruptors emerging: 3D printing. We are seeing rapidly proliferating shift from conventional manufacturing to just in time, infinitely flexible, manufacturing, even in the most staid industries. If you have the right occupants on your board, your digital director is already poised to report, “We looked into 3D printing, we’ve identified three or four core areas where it could disrupt our business, and we’re looking at either investing, partnering, or buying that capability.” He or she has identified the enterprise risk, brought it to the board’s agenda, and made sure there was sufficient follow-through in terms of conversation with the management on how to stay on top of it.

Board members who are digital, disruptive and diverse generate outcomes based on improved decision-making and more efficient problem solving. Even a difference as small as adding an individual from a different part of the country or with experience in a different industry sector can stimulate the fresh thinking required to focus on leading indicators and correctly identify the most significant issues emerging in your company, your industry, and your competitive landscape.

However, my experience has been that too frequently, potential board seat occupants are nominated, evaluated and selected based on a set of flawed assumptions. Current board evaluation processes talk a lot about current capabilities, and what capabilities are missing or needed. That approach is blind to disruption. Competition seldom comes from the expected direction, and disruptive competition in particular is mission-driven, incredibly agile, and likely to be built on a digital platform. So by definition, the search for your next director must be a search for a digital director—someone who comes from the technology sector, who has established credibility as a thought leader who thinks, speaks and writes about the business impact of disruptive innovation.

The expensive real estate in your boardroom becomes astronomically painful if you fill it with the wrong occupants, simply, because you framed the wrong challenge, and filled those seats based on flawed assumptions. Make no mistake: companies that thrive as the next industrial revolution develops will be those with “3D” directors, highly diverse individuals with exponentially more understanding of digital disruption than the typical “status quo” board members.

Nour Takeaways
1. For boards to frame the right challenges and base responses on the right assumptions, directors must be “3D”—digital, disruptive, and diverse.

2. Only “3D” directors can effectively focus on disruption, and respond with innovation that disrupts the disruptors.

3. Potential new directors are too often nominated, evaluated and selected based on current capabilities, and gaps on the board, a backward-looking approach that fails to pick up signals of oncoming disruption.

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