Our Thinking - and why we need to change it

A Strategic Board Perspective 2024

As boards we have the responsibility for governance/control and for development and a clear view of the future.

One of the big topics this year is the growing influence of the DEI agenda. We no longer need to discuss WHY – but HOW to transform our leadership style and organizational cultures to the future and towards a more inclusive and value adding mindset.

Another big topic is the need to broaden how we engage with and view the world around us. Global changes are happening and influencing us on a daily basis. Changes are happening at a speed, hard to stay on top of:?technological changes, changes in the marketplace, changes in supply chain, changes on the environmental agenda etc.

Acknowledging, understanding and acting on these changes can no longer be saved for the annual risk-assessment. It should not grow into an overarching fear of the future either. Balancing strategic outlook with daily business has never been more timely.

Today I was asked to share my board perspective with leaders from all around Europe. Here are some of my points:

My Background

I am Based in Denmark, and my past career has been in large corporates in manufacturing and retail such as LEGO and JYSK. I was part of the management team expanding JYSK throughout Eastern Europe. I was the BOLD Marketing Director asking for the first budget to spend on google advertising back in 2005. The rest is history. Ecommerce and omnichannel has since been my hometurf both in my corporate career and on boards.

Today I am an executive coach, teacher, mentor, entrepreneur, a strategy consultant and board professional. I am a NED on large corporate boards in Finance and Telco/energy and the Chair of mid-sized companies across the public, private sector, BtB and BtC.

We are all training our tranformative muscles

Technology has become soo much smarter over the past years – and the recent introduction of the large language models suchs as Chat Gpt has taken computational power to the next level. In addition to the mathematical capabilities of BI and Excel which has made a big difference historically, we now also have been introduced to the ARTS gone digital. Now it is no longer just the numbers that can be wrong or misleading due to a mistakes in formulas, now it is also the narrative or the image. ?

The question remains - will we be able to see beyond what is presented to us? Will we be able to question the validity? Or do we take what is presented for granted? In my perspective - as future leaders we need forster our ability to think outside the box – to be bold and courageous and innovative. We need to be ready to transform. Not only at the strategic level – also at the tactical and operational level. As leaders we need to facilitate this transformation. That’s our obligation – ensuring that we all find our way in being relevant in tomorrows working place.

I still remember overhearing a CEO commenting on design and development capabilities of China – “They will never be able to design products on their own – they have no creative design skills to build on.” ?Today 47% of all patents filed are filed in China. 17% in USA. We are witnessing a technological race between USA and China. USA is still leading the AI race counting the number of companies and investments made in AI. China is the second largest country on this agenda with only one fifth of the number of companies focused on AI technologies. It is important to follow how European businesses and politicians positions themselves on this agenda.

We need to revisit our global outlook

Most of my career has been working on a global scale. I entered the workforce when Eastern Europe opened up and globalization was the BIG thing. Engaging with the world was the norm – we went east and west. We are now facing the backside of globalization and unrest in the world – so what should we pay attention to?

I would like to share with you an experience I had over New Years. Mid-january I came back from South Africa where I met with friends. Experiencing the challenges of this wonderful country close at hand keeps you allert.?

It is only 30 years since Mandela became the first black president – yet it seems centuries ago. The country is developing and growing – and becoming a more and more inclusive place – allowing people of different color and race to shine even brighter than before. South Africa takes inclusion to a whole new level integrating four colours and 11 languages as they say.

One of the big contributions to this has been sports. Particularly the national rugby team and how this has developed. Already when Mandela came into office he pointed out that nothing can unite more than sports – and encouraged the rugby association to include coloured talent on the team. So from being and all white sport back in the 80’ies today it is a sport uniting the country with several coloured players on the team.

In 2018 Siya Kolisi was appointed the captain of the team as the first man of colour – and in in 2019 and 2023 they won the global championship. They have become the symbol of South Africa of the future.?

I spoke to the chairman of one of the leading law firms when there. His ending remark to me was “Pay attention to us – We are making big changes!”. Engaging in M&A across South Africa, Africa and into EU he experiences the positive change on a weekly basis. I belive him! Changes WILL happen.

To me this trip highlighted that we need to pay attention and be interested in the development of the African continent and see the nuances between the countries there.

Human Relations should be top priorities for boards

Aging populations and reduced birthrates will create massive gaps/ transformations in talent pools. Many countries and sectors are looking into a major recruitment gap compared to their need for talent within the next 10 years. China might not become the largest economy as anticipated due to these demographic changes.

During the pandemic everything we used to do or believe in was challenged from a macro to a national to an individual level. Many of us were left with a strong feeling of anxiety. Is this the end of life as we knew it? Do I trust the people in power to take care of me, my job and my society? Anxiety and stress levels have increased dramatically among staff. People are quietly quitting and loyalty and commitment to jobs and corporations and leaders can no longer be taken for granted.

We will NOT be back to NORMAL in the workplace.

As boards and leaders we need to engage with our employees as relations more than ressources and you can’t put relations into spreadsheets. This is the rise of the DEI Agenda. Boston Consulting Group acknowledges that this is one of top 5 strategic challenges for leaders in this decade. Depending on the country you are in this of course has a different backdrop.

In Denmark the situations we are facing is that of high employment. Today more than 3 mio. are employeed – never has it been this high. THis at the same time as the number of young people entering the workforce is rapidly decreasing. We will need a growing influx of colleagues and talent from abroad challenging our predominant Danish work culture.

Are we ready to accommodate and invite new colleagues in? Do we encourage/ demand an inclusive leadership style form our leaders? Are we paying enough attention to staff attraction, retention and loyalty as board members? Have we set targets and objectives for how we will accommodate one of the biggest risk of the coming decade – lack of talent/ need for inclusive/diverse teams??

EU directives places an emphasis on this matter through CSRD reporting and through this DEI is coming to the larger corporations. We should all take this seriously.?

I was personally involved in implementing both performance management systems and employee satisfaction research, HRM systems at LEGO in the 00’ies - and Balanced Score Card with close to 40 KPI’s at JYSK in the same decade. Performance management has done wonders in many ways - particularly with Boomers and Generation X as the predominant composition of the workforce.

Based on everything I hear, read and meet – it seems that we need to change our perspective for the future work environment – it is now more a matter of HUMAN RELATIONS – not Resources - and new tools are needed.

The generational divide in the workplace has become even more prevalent. Boomers not understanding their Millenial or GenerationsZ colleagues and vice versa. Millenials and GenerationZ are demanding new types of leadership and management – not satisfied with the annual appraisal and bi-annual employee satisfaction analysis and a career ladder to climb. HR professionals are struggling to understand what Is happening and how to support leaders in adjusting their policies and procedures.

As boards we increasingly need to concerns us with how our Management Teams develop the culture in our organizations. Are they leading through control and a high level of performance based management or trust and communication. What are the leadership values that are being persued and acted on in the organization?

The drive for responsible business

I have been responsible for marketing and selling a lot of stuff manufactured in Asia over time. I have worked with companies who’s wharehouses have increased massively over the past 15 -20 years on European soil. We have become extremely capable of building and managing highly efficient wharehouses in Europe – robots storing and retrieving goods 24/7.

All the while Asia has set up manufacturing and production sites.

We have all experience how both ships stuck in the Suez Channel, ports overloaded with containers? and now war influences global supply chains. All proving the global interdependency we have developed.

The annecdote to this is the development of the Container as a global standard for shipping. It was the biggest breakthrough in global trade in the mid 50'ies. It was the invention of the container and container ships in the period after 2. World war and up until the Vietnam war that has layed the foundation for the division of labor and transport of products and skills around the globe in the past decades. An amazing technology which has influenced the whole value chain of modern manufacturing.

But is is also a technology which may be among the root causes of “mass and over consumption“? which is one of todays biggest global threats. And this is actually one of the threats which I am mostly concerned about.

How do we RE-train consumers to a more environmentally friendly consumption pattern?

How do we as “responsible businesses downscale/ rescale our business to a lower carbon footprint than we have today?” Take the clothing industry or the “stuff” industry such as Amazon, Temu, Wish – new business formats delivering anything you can imagine directly to your doorstep.

The level of resistance or lack of willingness to change business model to the strive for “less” as opposed to “more” – is mind boggeling.

We all need to train our ability to move FAST - speedy decision making and adjustments of strategy, while staying true to the long term course. With both markets and supply chain potentially being in flux we need to stay open minded an explorative.

We need to look the beast in the eye and decide how to tackle it head on instead of freezing up not taking action or planning for change – in the next strategy cycle. For boards and leaders this means staying close and aligned on the business and what is going on.

Most of us will have experienced that the frequency, intensity and importance of the matters discussed during board meetings has gone up over the past years. We no longer sit on boards - we work on boards. Just yesterday I heard from a candidate about a UK based board expecting 30 full days of commitment.

Personally I have been on boards for over 20 years and I have never had to be so allert and adapt as today and we are continously challenging our business models.

With existing business models supply chain issues/changes have become a constant due to politics, material demands, power supply and logistics. Changes in demand has been quite dramatic the past four years due to Covid, inflation, energy prices going up/down etc. etc. etc.

We are adapting business models to both become greener and more digital to stay competitive and we are investigating new business models where Re-use and Re-duce is the new normal.

In summary - we need to understand and acknowledge our current best thinking and understand where this is no longer enough.

Our shared future requires it.

Albert Einstein said it OH so wisely:

"The world is the product of our thinking. It cannot be changed without changing our thinking."