Regardless of Facebook’s failure to protect privacy of users, Mark Zuckerberg’s Congressional hearing seems to resonate with why many corporations struggle to embrace innovation through digital products.
The average age of the 100 US senators is 63, which is the same average age for members of boards of directors of S&P 500 companies. Questions like the ones asked by members of the congress might not be so uncommon at board meetings big corporations.
How do you sustain a business model in which users don’t pay for your service? Sen. Orrin Hatch (84, Utah)
While age is not necessarily correlated to understanding of digital products and business models, experience within the field is. The nascent nature of these businesses within many corporations might be creating a gap between the expertise & understanding of traditional business versus digital products within board rooms.
Technology adoption amongst older generations is most certainly increasing (particularly within affluent and well educated segments, which is probably an accurate description of most senators and members of boards of directors from corporations), but this doesn’t necessarily mean that its being used in the same way than by younger generations.
After all, adoption of technology and usage of digital products doesn’t necessarily translate into an understanding of underlaying business models or an expertise in the area. Think on how many people use social media or other apps, without knowing the businesses behind them. Even back in 2013, 67% of senators had Facebook and Twitter accounts (highly likely that many of them are managed by staff members) and many of them don’t still understand the businesses behind these platforms.
Understanding of digital products and new digital business models within board rooms is crucial for innovation teams to be able to successfully execute such initiatives. This could be a reason why there has been an increase of corporations with board members under 40, at least in the US. According to Equilar, the number of directors under 40 within the largest 500 U.S.-headquartered or listed companies by revenue, almost tripled over the last 3 years, from 11 in 2015 to 30 in 2017.
Age diversity, in addition to a background in digital products, might be a way to increase expertise & understanding of digital innovation within board rooms. While this might be more common in tech companies where founders sit on the board, such as Facebook (Mark Zuckerberg — 33), some notable examples of non-tech companies with younger than average board members with a tech background include Walmart (Kevin Systrom — 33, CEO and co-founder of Instagram) and Starbucks (Clara Shih — 35, CEO and co-founder of Hearsay Systems).
It’s the job of innovation teams working on digital products to educate & prove their top management the creation of value through digital products, but existing expertise within board rooms could potentially speed up this process.
Any thoughts?
