How to Succeed - The Power of Shadow Boards

While the pandemic has forced companies around the world to be flexible and adjust their short and mid-term objectives, it taught them also the importance of being always prepared to respond to the changing market conditions effectively and efficiently. Of course, the pandemic is an unprecedented event that could not be (easily) predicted and therefore, organizations could not prepare for it. However, what could be predicted is the market condition and the end-consumer behavior.

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The problem of not being able to predict market condition and consumer needs of course is a problem that always existed; It did not appear with the pandemic. In the past we also had many examples where companies lost their competitive advantage because they were not well-positioned to respond to the next need of their customer/consumer. Think here of Nokia who disappeared when Apple introduced a new technology. Think of Toyota and Ford who lost their crown as the biggest car manufacturers (in sales) when Tesla introduced a new and more responsible way of developing and driving a car. And lastly, think of all big hotel chains when Airbnb introduced a new more efficient economic model for accommodation while travelling.

Certainly, predicting consumers’ behavior is one of the factors that offer competitive advantage to companies. On the other side of the coin, companies need to ensure that they have the right people who will help them predict the “next need” and will use this advantage effectively to harvest the desired outcome.

What could be the solution?

So far, a few companies have tried to tackle these two problems by introducing “Shadow Boards” – a group of non-executive employees who work with executives on strategic initiatives and decision-making. The purpose of these boards is to leverage the knowledge and insights of younger employees within an organization, and to ensure a broader diversity of the perspectives that executives are coming across.

It is not a new term indeed and it definitely is a bold move, but it has proved to be very efficient. The Harvard Business Review brings here the examples of Gucci which after introducing shadow boards achieved to grow by 136% in 4 years. In the same line, AccorHotels – a French hotel chain – reinvented its business model to compete with the likes of Airbnb and stay financially healthy. It seems to work, and it makes total sense. It helps bring youths’ perspective on the topics that executives discuss while at the same time it prepares the next generation of the board.

Who to Choose?

The objective of a shadow board is to mirror the existing board and drive a younger perspective, and for that reason it is always recommended from experts that it is consisted of Gen Z and Gen Y employees.

It also should be consisted of a diverse group that represents a gender balance as well as various backgrounds and departments within the organization. Do not only look at high potentials, otherwise, you are limiting perspectives. It can be that someone is not a high potential, but still has creative and challenging ideas. You need that in the shadow board. You need people who challenge the status quo.

Being part of a shadow group is also a form of career development and increased engagement as participants get exposed to high confidential information and strategic decisions. It also offers great networking opportunities and motivates employees dedicate more time and energy towards the goals of an organization

How To Succeed?

Well, as mentioned this is not a simple task and neither can it start from the bottom-up. It needs to start from the management team, and it needs to be sponsored by CEOs. Even though, HR will be the one coordinating the program overall.

Many companies that have already rolled out such programs, have the shadow board members reporting directly to the CEO. The CEOs on their side should continuously interact with existing members as well as interview/consider new members. It is also important to remember that as any other strategic decision, the roll out of such program needs to be evaluated constantly and adjusted accordingly. Only this way, it will always remain relevant and succeed. Implementing the program and then not considering the feedback of their members will erode any benefits associated with creating one in the first place.

What do you think? Is it time for more and more organizations to start implementing “shadow boards”?

Can it offer any help on solving the below two problems?