X Shaped Skills Are Key To Board Success In 2024
Board Challenges For 2024
Non-executive directors (NEDs) provide a vital role in ensuring businesses deploy rigorous, strategic planning and implementation, fuelled by exceptional talent, against a backdrop of well understood market challenges. Board Chairs face the challenge of ensuring their NEDs have “the X Factor” for the challenges ahead in 2024.
A recent Forbes report on the 7 biggest business challenges for 2023 states that the “war for talent” and “talent shocks” will continue to intensify as we navigate the 4th industrial revolution. Businesses now need to shore up on talent that complement the digital agenda such as creativity, complex problem-solving, critical thinking, communication, emotional intelligence and people management.
The Gartner 2023 Board of Directors Survey highlighted that 281 Board executives across the globe are focusing on investing in sustainability, diversity and digital acceleration for 2024 planning.
Investment & Risk Appetite
- 64% of boards of directors expect to increase their risk appetite in 2023-2024 to expand product lines, transform business processes and diversify into new markets. How to generate and select the “most likely to win” initiatives, whilst allowing a business to take risks and fail will be a challenging tension for 2024.
Sustainability and DEI
- Customers, employees and investors have Sustainability and DEI as key influencers in their decisions to buy products, work for a company or invest in a business. NEDs must ensure the organisation’s business plans, policies and practices are fully transparent regarding climate change, social responsibility, and ethical business practices.
- These initiatives will be primary funded through OpEx, which can compete with other equally needed business projects. Therefore, a clearly communicated rationale for project selection will need to be cascaded throughout the organisation and the markets in 2024.
Digital Agenda
- Currently 60% of boards say they have achieved their digital business optimisation goals and 53% say the chief digital leader is an executive member of the board.
- Optimising the digital customer experience is now the focus for 2024 to make the best from the investments made in businesses over the last 6 years. The biggest challenge from this is to hire, train and retain staff to implement the changes needed. Boards will therefore be challenged with approving sturdy staff budgets and compelling employee remuneration programmes offering more than just salary.
- Digital success for will be focussed on budgets with compelling returns for AI/machine learning, software enhancements, and data and analytics.
X Shaped Skills – Finding The Unicorn
Progressive Chairs and Nomination Committees are therefore placing a greater emphasis on the blend of Non-Executive Directors’ skills in the Boardroom. They are seeking those with “X shaped” skills and experience to drive innovation and effective decision making for the future.
Highly successful executives are those who have broad experience of cross business collaboration, combined with deep competence in at least one specific area of expertise. These are referred to as “T shaped” skills. They typically have experience in delivering individual business unit or department targets (the vertical part of the “T”) whilst sharing knowledge and integrating their goals across an organisation (the horizontal part of the “T”). Other attributes include:-
- Balancing the difficult tensions of internal competition between operating units with high levels of autonomy.
- Selling the benefits of reducing internal competition and focussing this misplaced and wasted internal energy on being more innovative and bolder in the marketplace.
- Managing conflict well and understanding organisational structures , polices, processes, politics and culture.
- Spearheading innovation and delivering change programmes within their individual vertical areas of expertise (e.g., IT, Finance, Sales )
- Programme managing large scale, complex transformation programmes across many verticals in an organisation.
“X shaped” NEDs are those who have “T shaped” skills and are visionaries who take calculated risks. They stand out as people who have a higher degree of self-awareness, adaptive capacity and the competency to thrive in adversity. Good examples are Elon Musk (Tesla), Jeff Weiner (LinkedIn), Harriet Green (Thomas Cook), Ben Silberman (Pinterest) and Reed Hastings (Netflix).
Conclusion
The pressure on organisations will continue to increase as global GDP growth remains static and is showing a significant slowdown to pre-covid predictions. The International Monetary Fund (IMF) is forecasting 2024 Global GDP growth at 3% whilst still maintaining the 5 year outlook at 3%.
NEDs in 2024 will have to raise the bar by navigating a complex web of decisions to create a highly skilled organisations of digitally savvy, motivated staff, with an appetite for innovation, change and collaboration.
One response to “Non-Executives Directors With The X Factor”
I just read Steve Jobs autobiography – and even a genius like him would struggle to hit all three of innovation, change and collaboration. The first two he was outstanding at, but he never wanted to collaborate, instead deciding to keep Apple products and software in a closed system. It will definitely be a challenge for the recruiters!