Removing transformation roadblocks: the board's paradigm

In a fast-paced, unpredictable, and highly competitive environment, we must be creative and imaginative in selecting what we do and how we do it.?Effective boards both inspire and encourage new ideas in firms.?However, boards may occasionally behave as roadblocks rather than aids, and management views them as conservative rather than innovative.

Individual director risk aversion, instinctual loyalty to "how we've always done things," inadequate insights into changing conditions, and a lack of a clear, shared vision for future development may all be hurdles to successful innovation at the board level.

How can a board's chair ensure the board of directors is supporting and not preventing corporate transformation and innovation?

The trust factor

Creativity necessitates trust, and creativity necessitates innovation. The cornerstone of psychological safety is trust. Without it, individuals would never feel comfortable being honest or pushing new limits, which is essential for creativity. People will be hesitant to explore new ideas if they believe their contributions will be overlooked or devalued.?

Trust is an individual thing. You can't expect individuals to agree to major strategic leaps if they don't trust their leaders' professional knowledge and real purpose. Building genuine trust inside your board (and between your board and management) begins with honest, open talks about your organization's mission, issues, shared risk appetite, and transformation mandate.?

Breaking the silence code

We must allow ourselves the time and creative space to explore new ideas and chart our innovation routes. One of the first steps in removing barriers to innovation is to modify the way strategy meetings are conducted. Our capacity to develop new ideas dramatically influences how we plan and manage our strategy sessions. Formal, packed agendas with little flexibility, never-ending PowerPoint presentations, restricted discussion time and closed rather than open-ended questions all contribute to the suffocation of creative conversation. The more solidly the walls are shut around you, the more tightly you're caged into a framework and an agenda.?

Another critical barrier to creative thinking in boards and senior leadership teams is that everyone comes to meetings determined to prove what they know and are confident of. This implies minimal room for admitting what is uncertain or unknown.?

Because we are not constrained, it established acts and processes, 'not knowingly be a great source of inspiration and creativity. Recognizing that we don't have all the answers and allowing for the potential of learning via failure as much as success fosters innovation.

Facing that the World has changed, and we must deal with the new realities, like or not

A high-performing board of directors is one of the most underutilized tools for achieving this goal. While many factors contribute to fruitful, long-term innovation, a board of directors may offer a critical initial push. And if the board is high performing, the company will profit enormously from its measured knowledge.?

Companies that aspire to expand by doing "more of the same" will achieve only incremental growth. When wrong, more significant collaborative effort will accelerate the organization's descent into an undesirable state. A game-changing transformation is essential for business ambitions beyond modest growth expectations. An active, sophisticated board of directors is often the ideal vehicle for doing just this, giving a venue for both critical analysis and successful cooperation required in transitioning from concept to commercial success.

New oversight: failures are an unavoidable part of the creative process

A peak-performing board's directors often have a thorough awareness of the company's direction and methods to steer its future success. Boards of directors may examine new ideas and promote investment in "department X" (or project X) to help a firm achieve greater profits. Furthermore, boards should aid in risk computation but anticipate some failures along the road. According to a recent industry study, 18% of boards attempt to prevent failure in all their transactions. Even the most experimental and insignificant innovation will be inhibited if an organization avoids all failure. A CEO would almost certainly avoid deviating from the usual if failure meant dismissal. As a result, a board of directors must embrace and support a measured — and hence acceptable — degree of risk in an organization's strategic objectives.?

Directors must accelerate (rather than stifle) growth

When determining if your board supports and encourages innovation, the first place to look is at its membership. Do you have directors who support and value the organization's growth? Are all directors open to and receptive to change? Are they aware of the risks associated with the industry? Are they able to evaluate ideas for validity, ramifications, and opportunity? According to a PwC poll of corporate directors, 35% want to remove at least one member from their board. This may be because the employee did not regularly come prepared, was not aligned with corporate goals, or had a different set of requirements necessary than the individual met. Surprisingly, more than half of those polled said that a director change was not made, even though board assessments suggested one was required. If your board is impeding innovation, it may be time to replace its members; directorship is not an "until death do us part" commitment.?

Openness and flexibility are required?

The board of directors of a company exists to influence management and ensure that plans and finances are matched in a manner that best promotes corporate performance. "Inspire the Future" is one area following years of in-depth study into the crucial components of the best boards. Great boards ensure that a wide range of innovative ideas is heard and properly considered. In a world of fast change and complexity, unhealthy boards often reject and ignore even the most promising projects to maintain the status quo—a fatal approach.?

Innovation cannot be treated as an afterthought. If expanding chances for innovation is said to be a priority, show it! Schedule activities that will increase prospects for innovation. This might entail investigating national or global trends and determining how they could affect the firm. Invite an outside subject area expert to speak to the board. Consider an internal competition that encourages (and incentivizes) workers to present their most inventive ideas to the board for feasibility testing. A board meeting might include assessing the competition and providing input. How a board might foster an innovative attitude is almost limitless.

Diversity is queen

Peer recommendations are the most common recommended way for new board members. Many people have an extensive network of experts who would make excellent board candidates. We are generally attracted to like-minded people, which leads to a homogeneous board that is less than ideal for fueling innovation. Drawing from a larger pool provides the most significant opportunity to integrate a variety of viewpoints, experiences, and world views. Consideration of different individuals—gender, ethnicity, experience, education, industry familiarity, age, etc.—guarantees a board with varied viewpoints. Board diversity as an inventive advantage is underused mainly, with fewer than 20% of boards having any gender or racial diversity. This indicates a vast squandered opportunity.

Given these facts, existing directors may boost board diversity by seeking opportunities to network with others at community or professional networking events. While variety is essential, diversity for the sake of diversity is not the solution. Organizations must work hard to develop diverse, competent boards that provide a variety of viewpoints to assist the business in realizing its long-term objectives.?

Seek for outside director competencies to cover gaps in internal capabilities. What will your company look like in ten years? What information gaps exist on the way? And, if innovation is a goal, wouldn't it make sense to look for directors from other industries??

Incentives are key

In an innovative culture, performance measures are aligned to reward actions that promote those principles. Aligning CEO/President performance criteria with the promotion of new ideas encourages achievement-oriented behavior and disruptive innovation—a winning combination. We know some organizations have successfully aligned executive incentive pay with KPIs, driving change in senior executives' decision-making processes.?