Shadow boards are a new trend in the business world that brings together millennial / Gen Z employees and seasoned executives to develop a company’s strategic vision. This solves two problems that most companies today are facing. First, shadow boards engage younger employees with senior management, which millennials and Gen-Zers value. Second, shadow boards are a way to shake up traditional executive boards and expose more seasoned members to new market insights and trends. So, what exactly is a shadow board?
What Is A Shadow Executive Board?
A shadow executive board is a group of millennial and Gen-Z employees that is selected from within a company. The board’s purpose is to bring a unique perspective on company strategy and company-wide challenges to the traditional board. Typically, shadow board members are selected from different functions throughout the organization and have different levels of experience. They also tend to be more diverse when it comes to gender and ethnicity.
Traditional boards are often made up of seasoned older executives, and tend to be men. These boards bring years of relevant industry and segment experience. The downside is that these members have been in management roles for years and can be disconnected from the frontline work. This can lead to negative outcomes when decisions are made that affect the day-to-day operations of the business.
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In today’s fast-changing and highly competitive market for talented labor and customer engagement, it is critical for companies to incorporate the view of employees “on the ground.” Companies must be aware of the latest market trends, how customers are buying products or services, and new digital tools for operational improvement and customer engagement.
When a shadow executive board and the traditional board work together, a symbiotic relationship is formed. The traditional board gains insights “from the trenches.” The shadow board members are deeply involved in the day-to-day running of the business so they can see where improvements need to be made. Shadow board members are also typically more tech savvy than traditional board members. The shadow executive board members can identify how to best communicate and engage with current customers, and also bring fresh strategies to gain new business.
Shadow board management must also take place. The traditional executive board helps the members of the shadow executive board grow in experience and expertise. By having regular interactions with the traditional board, shadow executive board members can form mentorships with their more experienced counterparts.
SMEs vs Non-Experts & Surprising Results
Executive shadow boards can often create surprising results, especially when applications are open to all millennial and Gen-Z members of the company. One would think that shadow boards are comprised of the smartest, most driven young people in a company. However, limiting the composition to these individuals can limit the potential of the shadow board. Instead, companies should consider a representative cross example of employees for a shadow board, not a sample of the most talented employees.
It is much more beneficial to a company to have an open process where all who are interested are seriously considered. First of all, high potential employees that have been flying under the radar can be identified. In addition, by having an open process, you can recruit a wider range of thought and experience. Many times, out of the box solutions happen when someone with a fresh set of eyes looks at the problem.
One example of successful shadow board implantation is Gucci. Since 2015, the shadow board has regularly worked with the senior executive team. The shadow board is presented with issues that are considered a high priority for the traditional board. Since the inception of the shadow board, Gucci’s sales have increased 136% in large part to the digital strategies that the shadow board spearheaded.
Scratching the Millennial Itch
Often, companies have a challenging time retaining millennials. Why? Millennials value transparency, authenticity, and recognition, and if millennials aren’t receiving these from a company, it is likely they’ll leave. In fact, most millennials only stay at a job for 2 years. Creating executive shadow boards can help companies retain this group of employees.
Executive shadow boards let members feel like valuable members of the company. Shadow board members are given access to company information that typically only a traditional board would see. With this information, shadow board members are given the chance to give feedback and make suggestions to improve processes.
Also, many millennials are eager to progress in their careers. Participating in a shadow executive board can help in two ways. Participation on the shadow board not only confirms that they are “high potentials,” but it also puts them in a situation where they are visible to management to be groomed for more senior roles. This investment in succession planning will ultimately lead to lower turnover with millennials.
What’s Needed to Make Shadow Boards Successful?
Shadow boards need to be a “living” board in order to be successful. When shadow boards are first created, processes on membership terms, meetings, and how to measure the success of the board need to be established. These processes will ensure that the board stays relevant and that new members from different business segments are rotating into the board every year. The commitment to a certain number of meetings and an established mentorship commitment from traditional board members ensures that millennials and Gen-Zers are benefitting from this unpaid role.
Shadow boards must also have buy-in from the traditional board and upper-level management. If a shadow board is created, the traditional board and company executives need to commit to regularly listening to the shadow board’s suggestions. The board also needs to commit to giving the shadow board projects that have a high likelihood of being implemented. This is important because if a shadow board feels like their ideas are not being heard, members may feel that the company was not authentic in creating the board. This could cause attrition from the members and even lead to people leaving the company.
Conclusion
Shadow boards are an exciting way to drive growth, resolve pain points, and increase work satisfaction for millennials and Gen-Zers. Shadow boards are a way for companies to show young employees that they are valued. This creates loyalty, which in turn leads to low attrition rates, exciting innovations, and higher profits. If implemented properly, shadow boards lead to situations where younger employees, traditional board members, and the company’s bottom line all win!
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