What's in a Word? Digitalization?

"Good governance practices have focused on and strengthened audit oversight and risk oversight. But there's an IT tsunami coming and that spotlight should now shift to IT oversight". 

David Beatty

Smart words from the erudite and articulate David Beatty, Conway Director of the Clarkson Centre for Business Ethics and Board Effectiveness at the Rotman School of Management at University of Toronto (what a mouthful!). David made the comment during an excellent Board Governance Day co-hosted by Stanford's Rock Center for Corporate Governance. And he got me thinking.

I wholeheartedly agreed with his point, but was uncomfortable about the term IT. Since David thinks words are as important as I do, we had a stimulating conversation about what the right word was.  

The term IT primarily connotes back office systems to manage and track a business - particularly to the typical silver-haired denizen of a board room*. Granted, these systems have been the scene of many a corporate debacle featuring functional mismatches, missed deadlines, budget overruns and staggering security breaches. As such, they deserve deep board oversight.

But there's something much more important to worry about. Today, digital information infuses every single product. Nicholas Negroponte foresaw this evolution almost two decades ago, when he said "The change from atoms to bits is irrevocable and unstoppable." He was considered a futurist at the time. The future is here now. 

Companies can serve customers better by embedding smarts and connectivity into their products: think smart thermostats or driverless cars. For some products the smarts and connectivity actually are the product. Companies also need to consider a seismic shift in consumer digital behaviour: think the generation that has 'grown up digital' watching video over the web rather than cable.

Companies need to widen their vision beyond traditional competitors: Garmin has to think about Apple, not just Tom Tom, while trucking companies have to think not just about the other trucking companies but what happens when trucks don't need drivers. And they need to think about disruptive entrants with new business models who could displace them: think AirBnB or Uber.

Boards have a duty to exercise insight, oversight and foresight about all this. So question is whether IT suggests all these things to a typical director.

David is a great communicator and he's worked hard to improve corporate governance in Canada. So he sought a word that would have all the right connotations and raise awareness of this important issue with directors. We bandied about several terms, and finally settled on 'digitalization'. It suggests how every product has gone digital (not just been digitized) and it also makes an implicit reference to to the fact that people  have gone digital too. What do you think?

* A friend has pointed out that, as a silver-haired director myself (albeit one who spent her career in the field of information technology) perhaps I suffer from an outdated view of the term information technology.

Steve Jobs

How sad to see Steve Jobs unable to continue at Apple.  From when he was very young, Jobs has broken all the rules and made it work for him.  I wonder how many university drop-outs have used him as a justification for their actions.

And so the speculation swirls as to what will happen with Apple.  Tim Cook, Jobs' successor, has been written about in very flattering terms, but he's all about how to do business: he's fixed various supply chain problems and been critical to Apple's success in bringing products to market.  Jonathon Ives, Apple's famous and revered designer, is all about how to design obscenely beautiful and usable products.  But Jobs is the one who has decided what to do.  His vision, his passion, his uncompromising expectations, and his micromanaging attention to detail have pushed Apple to deliver only the best.  How do you replace an influence like that?

There's been a lot written about Steve Jobs this week - almost like eulogies while he's still alive, although deeply imperilled.  He's certainly been a significant force in society beyond just business.  He came full circle at Stanford when he gave the commencement speech in 2005.  It's worth listening here for his take on life in general.  You've probably heard the value of telling stories as a way of making your point.  Jobs' three stories prove the point.