While 89% of broad directors say digital is embedded in business growth strategies, only 35% of respondents have achieved or are on track to achieving digital transformation goals, said Garter recently when releasing results of the 2023 Gartner Board of Directors Survey.
The survey was conducted via an online survey from June through July 2022 among 281 respondents in North America, Latin America, Europe and Asia/Pacific, who are in a board of director role or a member of the corporate board of directors, according to the advisory firm.
“Boards of directors (BoDs) have reached a point where digital business strategy and overall business growth strategy are one and the same,” said Jorge Lopez, Distinguished VP Analyst at Gartner.
As enterprises increasingly operate in a world of constant disruption, the most future-savvy boards are considering how upheavals and risks can serve as a source of opportunity, he noted.
C-suites will need to adopt this mindset as technology plays an ever-expanding role in driving business success, he added.
Boards look to “breakthrough” tech for innovation
Boards are looking to invest in ‘breakthrough’ technologies that will drive digital business and enterprise success, according to Gartner.
Survey results indicate that 40% of board directors consider AI and machine learning technologies to be imperative to digital business success in their organisation, the most-cited response.
Board directors cited software enhancement as their second-highest priority among breakthrough technologies, selected as an area for investment by 30% of respondents, Gartner said.
“Boards are seeking to modernize and enhance bedrock such as enterprise resource planning (ERP) and customer relationship management (CRM) tools,” said Lopez. “In practice they are often complex and rigid, when enterprises need agility and change.”
Board directors increase risk appetites as part of business growth strategies
The survey has also found that board directors have recognised risk-taking as a key component of digital acceleration.
According to Gartner, 64% of board directors are planning to increase their risk appetite through 2024, climbing seven percentage points from the previous year’s survey findings.
As part of business growth strategies, decision making in a turbulent business environment requires even a higher level of risk.
“Boards recognise that,” said Lopez. “This risk-taking ability is critical to competing at the speed of innovation.”
Many board directors are also expanding their vision for digital business success to focus on a digital economic architecture, with 71% of board directors reporting that they are pursuing or plan to pursue such an economic structure this year, Gartner said.
A digital economic architecture is the approach that non-digital enterprises can use to achieve similar economic benefits — including growth, profitability, market cap and brand value — as digital giants have achieved via their "born digital" business models, the advisory firm noted.
“The evolution from the traditional focus on quarterly returns to a longer-term focus requires a significant change in mindset,” Partha Iyengar, Distinguished VP Analyst at Gartner. observed. “Boards must recognise and leverage new sources of production and value, which requires a greater ability to accept, and even embrace, risk.”