Read more on future-proofing below:
Future-proofing your board might sound like a buzzword, but with rapid technology and social change, future-proofing is core business for all directors.
Gabrielle Schroder FAICD, head of AICD board advisory, says that in order to future-proof, the board needs to first ensure it’s got the basics right. It must make sure that its constitution is fit for purpose with the right supporting structures — including an appropriate mix of board skills, a sound risk and compliance framework and an effective governing relationship with management.
“Fundamentals aside, there are some features of a modernised board that are becoming universal to future success, such as having a good grasp of technology, data and human capital, and ensuring that directors are across key trends in community expectations and contextual risk.
“Ultimately, the board needs the ability to predict future outcomes resulting from change with a superior level of accuracy to its competitors. This means bringing the full value of the group to board decision-making.”
Useful questions for boards
- How has our operating context changed — what can we learn from the past that is still pertinent to our future?
- What will the industry look like and is our business gearing up for these changes?
- Is our governing infrastructure holding the organisation back?
- Are our performance and reward systems aligned to encourage investment in future business possibilities?
- What proportion of the business is coming from or building future revenue streams?
- Where are our “predictive gaps” and how can we close them?
- What are the three key things the board can focus on that will make the most difference to success in X years from now?
Source: Gabrielle Schroder FAICD
Adapting for the future
Here’s how nine organisations are tackling future-proofing.
Australia Post Digital iD
The Digital iD app allows customers to use a phone to verify their identity, removing the need to carry ID documents. The Digital iD can be used across a range of entities outside of Australia Post. Once a user verifies documents against the issuer’s records (passport, driver’s licence, Medicare card) the encrypted information on the phone then becomes the verified identity.
The global carpet maker began shifting to a closed-loop production model in 1994, aiming to eliminate negative environmental impact by 2020. The vision of late founder Ray Anderson included a zero footprint for carbon emissions, waste and water use, and required an integrated sustainability and innovation strategy. In 2017, Interface successfully lobbied for tougher recycling standards in California and now recycles its own products and those of its competitors.
A three-day internal innovation hackathon drove the online car sales platform Carsales to develop Cyclops, an image-recognition tool. Using AI, it categorises automotive images based on content. It has saved 55 hours of handling time for the 20,000 images its staff manually process daily. It is now also being used by private and dealer customers.
Property group Mirvac harnesses diverse teams and innovation champions to drive its Hatch innovation platform. The company has 50 innovation champions across business with innovation formally built into their job descriptions and regular time allocation to focus on innovation. A disciplined innovation process is used for smaller incremental improvements and breakthrough ideas (the House with No Bills, for example).
Online shopping site Kogan.com uses Google search data to monitor consumer shopping trends, helping the retailer estimate demand for products and services, and create private label products that consumers seek out. Kogan reported that the strategy improved performance so much it exceeded its 2016–17 annual earnings forecasts in just six months.
The market entry of jobs search engines Indeed.com and LinkedIn spurred SEEK to diversify into education and invest in a number of early-stage companies, including employment marketplace Sidekicker, job application tracking and client relationship startup JobAdder, and worldwide job search aggregator Jora.
Disruption in the market prompted Dutch-based multinational Philips to spin off its lighting division as standalone business Signify in 2016, applying circular economy principles. Energy savings alone from replacing conventional lights with LED are around 80 per cent making the switch for consumers and organisations a cost-saving no-brainer, says David Gardner, managing director of Signify Australia and NZ.
Valued at US$20b in September, the payments company is the top private fintech in the world. More than 80 per cent of US consumers have made purchases using Stripe. Patrick and John Collison developed software — “seven lines of code” — that businesses could plug into websites and apps to instantly connect with credit card and banking systems. Initially the perfect fit for small business e-commerce sales, the company has recently gained a number of major customers such as Google and Spotify.
Royal Institute of Chartered Surveyors
Assessing the potential future impact of digitalisation and resource constraints on Australia’s urban environment, the institute in 2018 mapped a framework to assess the ESG issues, opportunities and risks. Crossing the Threshold is a primer for sustainable digitalisation in real estate and cities.