That was the key takeaway from the Board Briefing 2021 event hosted by Valcon and Ingvardsen II Partners, an event that brought together selected keynote speakers with a crowd of 250 board members and top executives.
Back in the 1980s, German sociologists started writing about the risk society to describe the change in the world around us and the growing popular urge for a feeling of safety. Now this abstract concept is the main business driver and top of mind in the boardrooms: How do we deal with the climate crisis? Embrace it and win! How do we handle digital disruption? Embrace it and win! Look for trouble, because you share them with everybody else. And the winners of tomorrow are the ones who find a way to deal with them.
The Winners Embrace the Threats
Nana Bule, CEO of Microsoft Denmark & Iceland and one of the keynote speakers, hit the nail on the head with a simple metric from a global study: Tech Pioneers are 50% more likely to win, Green Pioneers are 50% more likely to win – but Twin pioneers, who go full steam ahead on both agendas are 150% more likely to win in the marketplace we see today and onwards. Better data and analytical tools are fantastic drivers for optimisation, and the primary green driver is to reduce waste in the processes. The two forces are mutually reinforcing.
Lars Sandahl Sørensen, Chief Executive Officer at DI – Confederation of Danish Industry, offered his perspective on these developments: The European Union alone is investing EUR 730 billion in green transformation and digitalisation. And from a global perspective, the numbers are even bigger. Many of the biggest investments and most aggressive companies pushing the Twin Transformation agenda are growing out of Asia, where not only the investments but also the access to data are plentiful.
Lars Fruergaard Jørgensen, CEO of Novo Nordisk, emphasised that the triple bottom line of Novo Nordisk is not a zero-sum game. When they embrace the societal and environmental challenges they tap into, they may give themselves some new headaches – but they are also tapping into larger and more sustainable revenue streams. As one example: Why not risk the diabetes-driven legacy business to win the obesity-driven business that is so much bigger?
Poul Skadhede, Partner in Valcon, addressed this as well. Danish companies are fantastic, but we need to become better at thinking ahead. Valcon’s ongoing Nordic Why initiative is focused on identifying the leadership DNA of Nordic businesses, but it is also revealing the flip side. We are fantastic at being small and agile, but do we place the big bets? We have a world-renown open leadership style, but do we fully understand that it is not the only successful concept around and that we may indeed get our behinds kicked by Chinese and Americans who move faster and in a consistent direction? We are ahead on sustainability, but will we stay ahead if we do not stay ambitious? And finally, and probably most fundamental: We build our business model on trust, but do we maintain the foundation for this trust?
How to Embrace your Threats
All of the above questions should be on the agenda of current and future board members, and both Rikke Kjær Nielsen, Partner in EQT Group, and Ole Dahl Ingvardsen, Managing Partner in Ingvardsen II Partners, emphasised that the role of the board member is only becoming increasingly challenging. And the list of requirements for the board member is increasingly long.
The successful board of the future will not only look for business opportunities that may be 3-5 years ahead and beyond the current strategy. They will need to look at existing and potential threats to their business and find ways to embrace these threats as opportunities. And they will need to understand the outlook of their business 10-20 years into the future: What fundamental threats do we face as a society and what can our company do to embrace them?
At the end of the day, the winners of tomorrow and of the distant future will be those among us who dare to embrace the threats and who dare to transform our businesses to embrace them. So what will you do, dear board member, to embrace the threats to your business?