Megatrends and board of directors strategic agenda

photo-by-alex-wong

By Ronaldo Ramos*

In his book entitled Homo Deus, Yuval Noah Harari tries to understand what challenges humanity has faced so far and to imagine from the present, what the challenges will be in the future.

One of the functions of a Board of Directors acting in my opinion, is the protection here and now in the present, of the future of the company from its own past. The implicit hypothesis I use is that in our comfort zone we tend to repeat the actions that brought us to success paying little attention to whether they will still be effective in the future.

According to Harari, our great obstacles and pains until recently were war, famine and plagues. I will not go into ideological matters here. I believe there is no doubt that these problems now have their solutions well-known and relatively under control, as well as accessible in every corner of the planet. I will not focus here on the issue of whether or not they are available to all individuals, even though I consider it extremely relevant, just because I think we will move away from the central theme of this panel.

Harari imagines for the future a world where the fundamental issues, or obstacles, will be immortality, happiness and divinity. I in particular believe that immortality, or the death of cell death, is closer than we can imagine, and that happiness, in a way, will be very well simulated by constant episodes of joy, a feeling very similar and easier to purchase.

And of course, we quickly become hybrid, bionic beings, with parts restored when necessary, predicted or not by the analysis of our genome. We may make use of a 3-D cultured or simply skin tissue or simply produced from genetic engineering or any other nano process.

We will also deal with artificial intelligence, both private and general, robotics, energy cheapness, processors in neural networks and cognitive computing that will facilitate our diagnostics and analytical tasks.

In its most recent publication on Megatrends in 2017, the PwC lists accelerated urbanization, shifting global economic power, demographic and social changes, climate change and associated resource scarcity, and technological advances such as major Areas of attention.

A menu and so much to be digested by the executives of an organization and its advisers, mostly trained in traditional schools, by methods of teaching where the knowledge is presented almost always compartmentalized and coming from a society where the specialization and the depth of knowledge were critical success factors.

Until recently, our expectation of a productive life in Brazil led us to believe that after retirement we would have a decade with a good quality of life and that after that we would be nearing the end. It would be possible to survive without great efforts of adaptation to the few changes that the world proposed to us.

It was possible to live a lifetime with a single job, or even with a single profession. We know today that those present in this room will most likely live to be 100 years old with relative quality of life, and able to remain productive until they are 80 years of age or older. Not necessarily with the same profession but still performing activities or professions relatively known.

Our children and grandchildren, however, will have a different world where they may not need to learn to drive or learn languages, but they will certainly have to prepare for a job market that will require constant changes of profession every five or ten years. Yes, no more job changes, but profession! And most are still unknown!

The anguishes to be lived due to the increasing degree of uncertainty, the multiple options of choice, the constant changes and also the many stimuli for the pursuit of happiness, the immediate satisfaction of desires, can bring as a consequence what is already observed in the world Including the work environment of large corporations. An increasing number of suicides, abuses of chemicals that reproduce feelings of happiness, which increase our power of concentration or allow us to need fewer hours of sleep will be part of our daily lives.

We are likely to live in a world where mental disorders will reach a significant part of the population, feelings of inadequacy and uncertainty are frequent, and where there will be a greater need to seek emotional, intellectual, physical and mental balance and above all, to learn to live together and embrace diversity in all its manifestations.

In my experience as a multinational corporation executive, and as a mentor for CEOs, I have observed that in general our greatest and most common quality is technical training and the ability to solve problems from the inside out, In resolution of “complicated” problems.

I understand the complicated problem as one where a classical scientific solution, identifying independent variables, modeling subsystem solutions and then combining the subsolutions to compose the answer to the larger question works well, and generally leads to the relative control over the company’s activities, its markets and its value generation.

In Boards of Directors in general, we find trained professionals, but essentially still attached to this belief. The paradigm that an individual, classic, Cartesian scientific action, close to that of his performance as an expert executive still produces satisfactory results. These professionals do not necessarily have their attention turned to cultural change, to challenging, transformative thinking, and to chalenging existing truths. Few are the advisors who seek to move through the ability to act in teams, build collective proposals, look at self-development as a key factor for generating value for the company and its stakeholders, creating an environment of mutual learning, enabling it to create the cultural platform that will be the reference for navigating future uncertain and changing seas. The ability I still see is scanty to deal with “complex” problems where correlations between variables are much more subtle and difficult to control. When we interfere in a network of stakeholders for example, many of the results are unpredictable, and our ability to act in constant motion and develop an increased understanding of other points of view and aspirations becomes paramount. Investing in innovation in the formation and composition of Boards of Directors seems to me to be the first and important step to be taken by the shareholders in order to create the capacity of the company to deal with the new challenges.

Recruit directors with proven emotional and adaptive intelligence, aimed at cultivating the diversity and transformative ability of the company culture, aware that they can not commit interference or jostle with the board, and that they have an insatiable appetite for seeking news in other fields and Establish synapses with other areas of human knowledge, seems to me to be the central challenge. In this sense, the mentoring of CEOs, Board Members and Directors has proved effective and accelerated in general learning, in the sense of horizontalizing perceptions and increasing the repertoire of behavior and transformation strategies. Once this issue has been resolved and solved … the composition and effectiveness of the Board and its social and organizational dynamics of operation, we can try to guide the discussions on megatrends and new technologies, formally creating a thematic agenda that includes a mapping of risks, besides the traditionally done, that systematically seeks to identify opportunities for entry of new competitors by application of concepts of rupture theory and by internal stimulation to innovation by the implementation of specific processes of construction and ideation.

It is also important for the Board to identify whether the innovations identified and proposed could be at risk of internal cannibalization because the company’s culture is extremely dominant, and therefore evaluate spin-offs or separate business creation decisions that allow proper incubation. From the mapping of risks of rupture and threats and opportunities to competitiveness, we can then include in the company’s strategy the ability to search for internal or external critical success factors and establish metrics for progress in innovation.

Nowadays, I believe that because of the lack of proper mentoring to Board members, CEOs and directors, companies in general still spend a lot of time discussing whether they are doing things correctly, often looking only at the past, for results Obtained and similar matters. If the company’s performance is satisfactory, of course, the Council’s eyes should turn to see if the company is allocating material resources, managing its talents, and investing in the necessary subjects to have continued success in the future, arriving in many cases until planning the very obsolescence of the current business model. The Board should specialize in asking the right questions, just as mentors do. Questions that inspire, provoke reflection, and above all, induce the culture of innovation: In which market are we actually operating? Is the market changing? Do we still know our customers? Providers? Stakeholders? Regulatory agents? Who are our competitors today? And tomorrow, who will it be? How is management really stimulating innovation? Removing barriers? How can the Council set expectations about the future? Profiles of risk, agility of the market? What is the company’s appetite for inorganic growth, considering not only In competitors, or complementary, but startups? In summary, in order to address issues of megatrends and new technologies and incorporate innovation risks, opportunities and strategies, the Council needs to equip itself with new skills that include not only emotional intelligence to operate in a collaborative and contributory psycho social environment, but also Recruit and develop advisors who are willing to embrace diversity in the broad sense and horizontality of repertoires of synapses and behaviors that allow them to act no longer as executive operators but as true mentors able to bring to the fore the relevant questions for the design of the routes of Transformation of business models and value generation. Inspiring the CEO and its directors is also part of the Board’s responsibility.

Ronaldo Ramos
*Founder of CEOlab
ronaldo.ramos@ceolab.net

 

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