How to Convince Your Board of Directors of the Importance of Embracing Business Agility
- As a business executive, you’ve probably grown aware of the importance of increasing the agility of your organization. But your shareholders might not have.
- The concept of business agility might sound foreign or even unsettling to a Board of Directors.
- It is essential for you to explain your plans clearly while demonstrating how they will create value.
Everyone reports to someone. As a C-level executive, your “boss” is usually the Board of Directors that represents your shareholders. Shareholders want to be updated on what is going on in the company, and they do have a right to know! It’s therefore your job as an executive to convince them of the relevance and validity of your strategies.
The ability to bring shareholders onboard is of particular importance today, as the COVID crisis and its ripple effect have forced businesses and organizations worldwide to revisit their assumptions and evolve their business models — often towards increased resilience and agility. This raises the question: how do you translate the elusive concept of “business agility” into shareholder terms?
McKinsey leaders have defined agility as “the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment.” “Rapidly changing”, “ambiguous”, “turbulent”… these sound familiar, don’t they?
The pandemic-related economic turmoil has severely disrupted virtually all markets and industries, making both demand and supply delivery unpredictable, reshuffling competitive positions, and making it much harder to forecast what’s to come.
However, one could argue that the crisis only aggravated long standing, underlying trends. In the digital age, with growing consumer empowerment, faster technology innovation, and increased impetus for product and service diversification, doing business means dealing with exacerbated uncertainty.
Business agility is just what the doctor prescribes. Businesses need to adapt to survive and to thrive in a world in constant flux. Today’s organizations need to move fast and respond nimbly to unexpected threats and opportunities as they arise, to adjust strategies and investment portfolios in a timely manner, to leverage data in order to detect weak signals and anticipate emerging trends, to drive a digital mindset across the workforce in order to empower employees to respond to nonstop change. Sticking to the old ways just because they feel more comfortable just won’t do.
Your fellow C-level Officers and yourself probably understand the need to drive organizational agility. After all, you are the ones in charge of managing the business: you are the ones making key investment decisions based on market insights and past performance, you are the ones overseeing proper execution of your strategies, you have a line of sight to the customer… Your awareness of the reality of the ground probably makes you feel the importance of adaptiveness.
But how do you explain that necessity to groups of shareholders who see the business from a greater distance and are chiefly concerned with financial metrics — while “agility” is somewhat hard to translate into financial terms.
First of all, you might have to fight a number of common misconceptions and fears regarding what it means to be “agile”. To some people, “agility” still sounds like a way to sugarcoat haphazard management. It sounds like an excuse to “go with the flow” and resign to whatever hurdles life throws in your way. This couldn’t be further from reality: in fact, truly agile businesses do not sacrifice long-term thinking to immediate requirements. A great agile enterprise is just like any other enterprise: it needs a strong vision, supported by a robust structure, in order to succeed.
Even when your shareholders understand that agility does require a shared vision, planning, and a form of stability, they might be wary of some of the implications of going agile. Companies — especially large, established ones — have accumulated a number of legacy processes, hierarchies, and ways of doing things. Agility cares little about old habits. Agile businesses do not shy away from discarding what they have outgrown — and this kind of change can feel somewhat daunting to your shareholders.
So, how do you convey the need for business agility in a clear and convincing way?
Shareholder populations usually show low tolerance for buzzwords. To secure their engagement and buy-in, you should stress the tangible benefits that the organization would derive from embracing business agility. Demonstrate how greater organizational agility provides a path for business growth and development, leverage external examples to show how it will improve collaboration, communication, and transfer of knowledge within the organization. Explain how it will help to solve operational challenges and pain points, describe the opportunities that you believe the organization will be able to seize and the expected benefits and outcomes of the plan you’re proposing.
Better risk management and mitigation is definitely a key point to make to your Board of Directors. In a constantly changing global landscape, decision makers are struggling to anticipate an ever-growing array of increasingly unexpected threats. Where you can’t anticipate, responsiveness is a must.
Finally, on a practical note, try where possible to produce hard metrics and figures. Resort to clear and direct language, and leverage your knowledge of your Board of Directors to choose the right format to display the information.