Boardroom Disruption: How Silicon Valley and the Fear of Missing Out Can Reinvent Your Business

FOMO

The Silicon Valley tech-mythology-machine, replete as it is with unicorns and trolls, is a wondrous device designed as much to assist in reality distortion and suspension as it is in self-paving its streets with digital gold.

We all know the story of how the Valley has reinvented itself through various technology phases. Currently it is awash with apps and social media. Even though they helped create this social flow, a few of the tech pundits are swimming against this tide, reinventing themselves as mindfulness gurus, but that’s a fairy tale for another time.

There is a new tide washing into the Valley: autonomy – artificial intelligence, self-driving everything, asset-rich services on demand and cognitive systems that know us to the point where they are 2-3 moves ahead of us in our own personal game of thrones. Their aim is to be 6 moves ahead, and they are rapidly progressing to this point.

But this is all backdrop.

The real foundation of Silicon Valley, the grease in its gears is FEAR. In particular, the FEAR of MISSING OUT (FOMO) is driving the Valley’s sense of urgency.

FOMO is the ultimate reality distortion field creator. This is best explained through examining the fluidity between viewing a new venture in terms of its friction points versus how much it could scale with limitless fuel. Take Uber as an example. Donning friction-tainted lenses restricted many from seeing it as anything more than yet another taxi service, operating in a highly regulated market with well entrenched incumbents. However, for those who looked at Uber through fuel-filled lenses, they saw its true potential, namely to revolutionise transport. They were able to suspend reality long enough to understand the ultimate promise of Uber.  Those who then went on to invest early enough into the company may be rewarded handsomely.

In a low FOMO environment, i.e. most other places on the planet than Silicon Valley, there is little incentive for people to don fuel-filled lenses. They have the luxury of sitting back and waiting for a venture to achieve sufficient traction, they wait for the entrepreneurs to derisk the business. However in a high FOMO environment, those who hesitate: miss out.

Nowhere else on the planet is the FOMO-meter so high. In fact, it is off the charts in comparison to many other geographies. The same can be said for the boardrooms of so many companies. Does your company have a FOMO culture at executive level? For most organisations the answer is a resounding “no”. How then can incumbents compete against agile Silicon Valley startups? The short answer is that they cannot.

Ask the former Kodak board if they understood FOMO. Apparently not.

I’d like to advocate that every board, every senior executive needs to up their FOMO ante. How high you might ask? Not to hysterical levels, but high enough to palpably increase the urgency around tackling disruptive innovation. High enough to also burn the boats and chart new courses if necessary. Definitely higher than the dual path some would advocate of keeping business as usual turning over while exploring new paths on the side.

How do you instill FOMO into the boardroom?

1. In the short term, have your board do a tour of the Valley. Not the bells and whistles version with champagne on the tour bus, but the grungy start up tour where they get exposed to the highest levels of FOMO.

2. In the mid term, look to bring Silicon Valley into the boardroom. Place at least one FOMO expert on the board. Their experience and skills will prove invaluable to you in dealing with the status quo.

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How to Ensure Chief Technology Officers Present to the Board Impactfully

DCIM100GOPROGOPR0857.Within the next six months as many as 75% of CEOs will institute regular Board of Director briefings by their senior executive team. CEOs will tap *CTOs to do such briefings. How can they ensure their presentation achieves impact with the Board? We run through a tried and tested slide pack template for Board presentations.

Let’s assume your CEO has asked you to do a presentation to the Board on your technology office and its impact on the business. What does the Board want from you? How can you ensure your presentation delivers the right level of impact? This deck provides brevity, cogency and focus to grab the attention of busy Non-Executive Directors.

 Executive Summary

Slide 1:  Treat your first slide as an Executive Summary. It needs to include items that ensure a director tunes in –  grab their attention immediately.

Provide a summary of the purpose of the presentation. This sets expectations upfront. It also accords with the wisdom of

tell them what you’re going to tell them, tell them and then remind them what you’ve told them.

 Core Slides

Slide 2: The Money Shot
This is the first of your core slides. It must cover the contribution of technology to the business success of your company.

This slide should include:

  •  How your company will win as a business – make sure you list the top three things you need to do as a business to succeed.
  •  What business capabilities do you need to build? Set out the capabilities needed in the business to support that position.
  •  Competitive use of technology – detail how technology is playing out in your industry. Include your views on whether your company is ahead or behind with cost and capability. Note that the Board wants your views, not those of some research firm.
  •  How the technology office will contribute – qualitatively (what will your team do to make the business win) and quantitatively (what will your team do to costs/competitiveness/revenues/risks). Also focus on what you will do to close the gap or increase the lead with technology capability.

Slide 3: Technology by the Numbers
Your third slide is also part of the core set of slides and should be in table format.
Techbythenumbers
In the rows you should include business outcomes (BO), technology performance levels (TPL) and technology costs (TC).

Set out a five year time line across the columns – last year, this year, year  +1, year +2 and year +3.

Wherever possible, you should include benchmark measures relative to competitors or similar organizations.

Slide 4:  Risk and its Mitigation
The fourth slide is your last core slide and it should set out the five biggest risks represented by your strategy and how you plan to mitigate them.

Risk&Impact
Use a quadrant that maps Impact on the vertical (low, medium and high) and Likelihood on the horizontal (also low, medium and high). Chart all your risks, but only include on the slide the five that feature in the top right corner.

Also include a table that itemizes each risk and summarizes how you will mitigate that risk.

Slide 5:  Appendix
Your fifth and final slide is an appendix. It should include items for drill-down with the Board.

What items do you expect to drill down on? Examples include a detailed cost breakdown or skills inventory.

And that’s it – three-core slides is all you should need with a cover slide and an appendix.

Pro Tip:
Make sure you get a copy of the template that your company uses for Board presentations. If there isn’t one, keep your slides clean and uncluttered.

A Director has no interest in fancy pictures or whizbang PowerPoint animations. Don’t subject them to Prezi-induced motion sickness.

 White space, large font and clear messages rule the day.

* This piece is directed at the Chief Technology Officer by name, but applies equally to the Chief Digital Officer and the Chief Information Officer.

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Does Your Business Have the Capabilities for Achieving Exponential Growth?

Growth
As CEOs and Boards you are faced with an unprecedented level of pressure to achieve growth. Your company needs to stay ahead of increasingly aggressive competition, from other companies in your industry, from outside your industry and even from scrappy startups who define their own playbook.

Growth is not a lever you turn on or off at will. It requires focus, it requires a set of core capabilities that work together as a well-honed scalable operating system. Does your company have such an operating system in place? To achieve the nirvana of hyper-growth, this operating system needs to be working at peak performance capacity. How close is your business to operating at optimal capacity?

THE HYPER-GROWTH CAPABILITY QUIZ

We’ve designed a set of questions that help you uncover whether your business has scale in its DNA, whether it will be constrained by limitations and frictions and whether it has the capability to easily add fuel into its mix.

You can access the quiz via exoscalr.com or directly here.

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Live Board: The World’s First Digital Real Estate Signboard

I’ve recently joined the board of an innovative company operating in the real estate signage arena: Live Board.

Here’s a video of their product and the company’s CEO, Costa Koulis, talking about the market and his vision:

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Board Games: How to play

the-boardroom-on-flickr-photo-sharing.jpg

Like venture guy Fred Wilson, I’ve spent a few years interacting with Boards of Directors – as Chairman, as Investor-appointed Director, as Founder, as Executive and as Legal Commentator. I’ve also interacted with Boards that presided over multinational conglomerates, public research institutes, venture firms and startups.

Perhaps this is why when I read Fred’s views on “Choosing Board Members” it really resonated. He sets out 10 thoughts on the topic and each and every one is worth repeating:

  • Avoid “big names”  For the most part, they are useless. [Hmm, Australian companies are particularly prone to this foible. There is a cabal of “names” that tend to crop up on so many boards – have a good look at the share price of Jumbuck and tell me if its ‘name’ has made a difference to its tumble. Similar situation over at Bluefreeway.  Oh well, I’ve offered to help both companies but that’s not for this discussion.]
  • Select people who will attend each and every meeting, who will pay close attention to the business [Totally agree – avoid pigeon directors who fly in, make a mess of the board papers and then fly out]
  • Select people who have an affinity for your business, who understand your challenges and your opportunities [ Oh how true – a property investment banker is highly unlikely to add value to your high tech business]
  • Avoid putting someone you can control on your board. In tough situations they will have a fiduciary duty to do what’s right and you won’t be able to control them when it matters most to you. [Besides the reason it may backfire, it will also get you into hot water with your corporate regulators and most likely get you sued – after your board has fired you, that is]
  • Don’t let conflicts get in the way of selecting the ideal board member. Conflicts will be disclosed and can be managed. Many times the people who will understand your business best are conflicted in some way. There are ways to deal with this problem.     [ this is true, but needs to be handled very delicately – I am currently watching a situation very closely where a board member of one company is also a formal adviser to a direct competitor…I’ll keep you in the loop as it unfolds]
  • Make sure to have an experienced accountant/auditor on your board and have them run the audit committee. That is no place for amateurs. [Indeed, but don’t let the beancounters get in the way of the business, unless you are playing a complete numbers game]
  • Make sure to have at least two or three CEOs of comparable companies on your board. Make sure they are on the comp committee. Compensation issues are best handled by people who understand the talent market. [Fred makes a good point here. They should also be of use when it comes time to discuss valuation multiples tied to a fundraising or exit]
  • Select people who have the time to do the job right. Being a board member is a job. It’s not a retirement perk. If someone cannot commit to attend each and every meeting and to spend at least several hours a week on your company, they are not the right choice. [Umm, this is a repeat of point two, but its important so it bears repeating]
  • Select people who will get along with each other. The very best boards I am on are friendly social active groups. Serious business doesn’t have to be stilted and formal. It can and should be fun. [Life is too short to seek acrimony. Friendly and social is good, but not at the expense of adding value to the business – remember, as CEO that is your core metric and reason for being – ask Jason Goldberg – see his first point on his learnings from being CEO at Jobster]
  • Above all else, look for great judgment and ethics. [When times get tough and decisions are not black or white — these points are golden]

[Picture courtesy of Baboon]

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