Enterprise strategic planning has never been more challenging.
The Doomsday Clock is the closest it has ever been to midnight, a reflection of the unprecedented danger the world faces. The World Economic Forum’s Global Risks Report 2024 surveyed more than 1,400 industry leaders, risk experts, and policy makers. They ranked this year’s 3 biggest enterprise risks as: (1) climate change (biodiversity, mass migration, and other interrelated challenges); (2) technological advances (economic, political, and social issues); and (3) geopolitical instability and fragmentation.
These looming global threats—among others— are an ominous backdrop to the speed, complexity, perpetual change, and asymmetrical competition confronting digital business. There is a long list of additional enterprise risks and challenges that include: economic uncertainty, regulatory complexity and compliance burdens, digital transformation, artificial intelligence, cybersecurity, data security and privacy, IP, supply chain disruption, and talent management.
How does corporate leadership forge an effective strategy to address the myriad of layered, interconnected, real-time, existential enterprise risks while charting a course for leveraging technology at scale to improve customer experience, outcome, and brand loyalty?
There is no simple or universal answer, but there are several common elements.
- Creative, inspirational, and empathetic leadership with a clear yet agile vision;
- CEO reliance on a cross-functional team of trusted advisors, each of whom has a holistic enterprise mindset forged from a different functional perspective;
- a culture of innovation, collaboration, constant improvement, and customer-centricity;
- a holistically diverse workforce linked by a common purpose and a culture that values its workforce, individuality, curiosity, capability, collaboration, empathy, and social responsibility;
- such a culture will attract, train, up-skill, advance, retain, and prepare talent for success within and/or outside the enterprise;
- a culture that recognizes technology enables change but human adaptation determines the outcome of its digital transformation journey
General Counsel (“GC’s”) are key strategic assets in creating a digital culture and contributing to enterprise strategy. Here are three reasons why.
(1) Legal Is An Enterprise Junction
General Counsel and their teams operate at the crossroads of enterprise internal operations. They interact with the Board, C-Suite, regulatory and compliance, IT sales, marketing, crisis management, public relations, and procurement, among other business units. GC’s also have an outward-facing role, engaging with regulators, governmental agencies, and customers. The scope and ever-expanding breadth of law’s footprint across the enterprise and beyond affords the GC a holistic perspective on enterprise strengths, weaknesses, vulnerabilities and opportunities.
The legal function serves a triad of critical enterprise roles: defender, ethicist/guardrail steward, and value creator. These concurrent duties, coupled, with a marked uptick in cross-functional legal collaboration with other business units, provide GC’s with a broad, balanced, pan-enterprise perspective. Backed by data and empowered by generative AI, GC’s provide enhanced insights from which to fashion enterprise strategy. Their broad, deep knowledge of the business, its leadership, culture, finances, risk tolerance, processes, technology stack, talent, strategic partners, competition, customers, and stakeholders further enhances their strategic contribution.
It was not always this way.
The legal function has morphed from a lawyer-centric, siloed, artisanal, reactive support department to a multidisciplinary, tech-enabled, data-backed, AI-powered, proactive, cross-function, integrated business unit. Law’s transformation is part of the wider enterprise digital journey, an end-to-end, no-holds-barred reorganization of how business operates. The goal is to achieve competitive advantage by continuously deploying tech at scale to improve customer experience and outcomes while reducing cost.
The GC operates at the intersection of the wider enterprise transformation journey. GC’s and their teams assess opportunities, risks, and guardrails across business units. A notable example is new technologies for which digital dexterity is required. They must also quickly learn and apply emerging legal, regulatory, compliance, and IP issues arising from the Warp-speed advance of tech.
The expanded remit of the GC (and legal more broadly) has fortified its elevated role as an enterprise strategy asset.
(2) Early Legal Engagement Drives Enterprise Value
The legal function is most effective when it is engaged early on. That applies not only across its core dispute resolution, corporate transactions (especially contracts) and regulatory areas but also to burgeoning ones like cybersecurity, data management and privacy, IP, and crisis management. Early legal engagement promotes timely risk detection, remediation, mitigation, and resolution (e.g. dispute avoidance). That produces enterprise value in a variety of ways: economic (including lost opportunity costs), brand protection, and freeing up resources to focus on core, revenue-generating activities. The same applies to contracts and commercial transactions where law’s early engagement identifies material issues, compresses the contracting process, accelerates revenue generation, and delivers benefit to end-users.
The foregoing helps explain why GC’s increasingly “embed” one or more legal team members into other key business units (sales, regulatory, contracting, IT, etc.). The goal is for legal to help inform strategy from the beginning, not respond to it after-the-fact. In sum, early engagement leverages the legal function’s strategic value.
Early legal engagement is particularly effective in cross-functional corporate risk assessment. Shell’s “Scenarios Team” pioneered this approach decades ago. Their multidisciplinary team “explore possible versions of the future by identifying drivers, uncertainties, enablers and constraints, and unearthing potential issues and their implications.” The analysis is broken down by short, mid-term, and longer timelines. The team’s recommendations provide a solid foundation upon which to build enterprise strategy. This is a valuable way to leverage legal’s problem-solving capability, judgment, balanced perspective on risk/reward/guardrails, issue-identification, risk exposure, and critical thinking.
Bill Deckelman, GC of DXC Technology and co-Founder of The Digital Legal Exchange, has been in the vanguard of legal digital transformation for years. He has created a team culture built on three key, interrelated components: people (talent), performance (process) and technology. His team is collaborative, digitally literate, purpose-driven, innovative, proactive, and inquisitive. The culture celebrates humanity while embracing technology as a potent collaborative partner.
Deckelman recognizes that adopting generative AI, data management, and leveraging the tech stack requires strategy, intuition, and systems thinking. It also requires a workforce committed to collaborate with technology, not resist it. He shared his view on the power of these new tools: “Insights from data have magnified early risk-identification in an increasingly complex business environment. Now, generative AI is empowering the GC to enhance the speed, depth, breadth, and caliber of risk analysis. These tools will deliver extraordinary strategic value to business by providing real-time models of portfolio risk to enhance strategic decision making.”
Deckelman’s approach to innovation is as much about people (talent) and performance as it is about technology. One element cannot succeed without the other. His proactive, cross-function, data-backed, AI-enabled approach to the GC role is a blueprint for digitally advanced leadership that drives value to the workforce, the enterprise and its customers.
Sound Judgment Promotes Effective Strategy
Judgment is the essence of the legal function. Lawyers are trained to be critical thinkers, adept at issue identification, balancing risk, seeing both sides of the issue(s), and an ability to process large quantities of information, ferreting out what’s material, then fashioning strategies. This is a solid foundation for judgment.
A far smaller segment of the legal population earn the moniker of “trusted advisor.” That refers to an individual whose wisdom, experience, expertise, balanced perspective, emotional intelligence, curiosity, and history of rendering sound judgment consistently and in crises is highly valued. Trusted advisors are not limited to lawyers, of course, though the legal profession likes to think it has cornered the market.
A trusted advisor is neither self-appointed, nor rooted in a fixed view. A trusted advisor must be inquisitive, take a holistic view of things, have exposure not only to a particular field such as law but also how it relates to other disciplines and functions. They look for connections between things (“connect the dots) and see the big picture. They think multi-dimensionally, strategically, and pragmatically. The trusted advisor has high intellectual and emotional intelligence, combining a keen, two-sided grasp of issues with an understanding of the individuals affected by them. That’s why there are relatively few of trusted advisors and their advice is widely sought, highly valued, and broad in scope.
Trusted advisors ask good questions, communicate clearly, are quick learners, and able to extract material information not only from documents, data, and tech tools but also from human beings. They instill confidence and are constantly observing, learning, and sharing. Trusted advisors are “in the game,” not viewing it from the sidelines. Their wisdom is intellectual and experiential. The latter is gleaned from setbacks as much as successes. It derives from an understanding of people as much as (more recently) data analytics, generative AI, and other tools that enhance their insights but cannot replace them.
GC’s are enterprise trusted advisors. Those that are not are either a bad fit for the company and/or the company is not a good match for them. The GC role is a vital asset in enterprise strategic planning. That is one reason why a growing list of GC’s have become CEO’s of leading companies.
Article originally published in Forbes