Founding director of Innergise and Australia and New Zealand School of Government educator Dr Nick Fleming GAICD gives his top 10 tips for combatting disruption and harnessing innovation from the board down.
New competitors and market disruptions are coming to many industry sectors. Hotel, taxi and retail sectors face the challenges now. How can the real impediments to director action on innovation be tackled? A series of simple, achievable, low-risk actions can be taken:
- Discuss innovation as a board. What does it mean in your business context?
Directors need to make strategic decisions in volatile and fast-moving environments. See how our Company Directors Course Specialisation ‘Directing Innovation’ course can equip you with the skills to plan and prepare for industry shifts, and implement those plans with confidence.
- Estimate the cost of inaction. What innovation is already occurring? What aspects of the business must still improve? What value is at risk? On a risk- weighted basis, what level of investment in innovation is prudent?
- Develop a list of the board’s key innovation questions. Which questions are most common and important and what simple actions can be taken to address them? Beyond refreshing the board composition, actions should include discussions with technology specialists, engagement with directors operating in disruptive industries and study tours.
- Ask how you would measure innovation. What does success look like and how will you know when you’ve achieved it?
- Examine whether the incentive structures for executives help or hinder innovation.
- Ask management about your customers’ key unmet needs.
- Ask management to explain how they’ve considered different options for delivery of major initiatives and their associated risk/reward profiles.
- Scan the emerging operating environment to gather evidence on opportunities and risks. Move beyond uncertainty and paralysis to objective action.
- Construct a portfolio of innovative initiatives to optimise your return on innovation investment while building an enduring innovation capability.
- Train your people to solve problems. Problem-solving skills are not strong in most organisations, especially skills central to everyday tasks and innovation.