This year, Massachusetts Institute of Technology’s Center for Information Systems Research released a study that showed just how much companies in the commercial sector benefit from having a tech-savvy board. In fact, companies with digitally literate board members significantly outperformed their peers on key metrics:
“Doing business in the digital era entails risks ranging from cybersecurity breaches and privacy issues to business model disruptions and missed competitive opportunities. When a board lacks digital savvy, it can’t get a handle on important elements of strategy and oversight and thus can’t play its critical role of helping guide the company to a successful future.”
What’s more, companies have more to lose from lagging behind the digital revolution than from taking on new risks. As stated in a Forbes article, “As a board member, you probably shouldn’t fear AI, automation or the rise of the robots. You should, however, have a healthy fear of falling behind.”
So, what happens when board members DO know their way around emergent technology? Companies with three or more digitally savvy directors had 17-percent higher profit margins, 38-percent higher revenue growth, 34-percent higher return on assets and 34-percent higher market cap. In the words of Stephanie Woerner, research scientist at MIT Sloan’s CISR, “Directors on digitally savvy boards have an understanding, tested by experience, of how digital technologies impact the way that companies will succeed in the next decade.”
BUT, the commercial sector isn’t the only one that would greatly benefit tech-savvy board members – museums and nonprofits also need leaders who will champion entrepreneurial principles to jumpstart innovation and transform museums into truly modern organizations that are prepared to face today’s world.
According to Russell Reynolds Associates, digital technologies can often seem like a too big an investment (with uncertain returns) for nonprofits:
“Board trustees do not understand or underestimate the strategic importance of becoming a digital organization and maintain a narrow view of new technologies as essentially marketing tools. Such inertia can slow or stop progress toward creating a digital organization by limiting investments.”
But the initial costs should not be a deterrent. I recently discussed what it means to be a “museopreneur” in a feature article published by American Alliance of Museums. Museums and cultural institutions need to be innovative and resourceful with technology in order to stay ahead, and they require board members who will help motivate this change.
More recently, forward-thinking nonprofits have already begun tapping into wider networks to meet their new needs. For example, “Prominent innovators, such as the founders of Android, Groupon, and Behance, have supported and shared their entrepreneurial perspectives with various arts and cultural organizations as board members and advisors.”
With a more adaptable, entrepreneurial, tech-savvy board members, nonprofits will be better equipped to embrace a modern, innovative mindset and start harnessing the power of technology to engage their visitors in new ways.