Finbar raises the bar on risk and innovation

A recent blog, entitled ‘Success Comes from Seeing Ourselves as Others See Us’ and delving into board self-assessment certainly resonated with one of our readers.

So much so that he took time out to respond, initially with a short, sharp and succinct “nice article” and subsequently with some pertinent thoughts I think are well worth sharing.

You’ll recall the original blog argued the importance of self-assessment while warning against undertaking this exercise simply because it has become rather de rigueur to do so.

We noted that poor boards tend to see the assessment as little more than a box ticking exercise, whereas good boards take it seriously, value the findings and act on them, even if they throw up results that are uncomfortable and suggest, perhaps, that someone on the board needs to step down.

We also highlighted a few ways in which boards tend to be a little deficient – the first being that members overestimate their skills proficiency, the second that the skills definitions are too loose…for example, if we’re looking for legal skills, we need to define these as it’s highly likely what we’re after is corporate and commercial legal nous rather than, say, family law.

But back to our reader.

He starts out by saying that he would like to add his two cents worth by offering commentary on something he thinks is highly relevant to Australian boards, to governance in general and to our ‘self-assessment’ blog.

He says…

In my opinion, Australian boards need to shift the conversation and their position regarding risk and innovation.

Innovation is often seen here as ‘risky’ and against the DNA of an organisation, and good governance is being interpreted using an old and outdated model. 

It’s a model that focuses on avoiding innovation while fostering protection and linear growth. 

If executed correctly, a strategically and commercially focused innovation strategy is, again in my opinion, mandatory for businesses if they want to survive in today’s and tomorrow’s world.

If a focus of governance is to protect the business, perhaps having a commercially-focused innovation strategy or – at the very least – a secondary strategic innovation board are just two ways to protect businesses into the future.

For this to work, though, boards need to be educated and the biggest lesson is to learn that the words ‘risk averse’ should be attributed with HAVING an innovation culture and strategy rather than the current association where not having one seems perfectly acceptable.

May I say, I am in total agreement with this, particularly the belief that there might well be a need for a secondary strategic innovation advisory board as a mechanism for ensuring that innovation in strategy is always on the main board’s agenda.

I believe there are a number of other mechanisms we could employ to ensure this, and I’ll share these with you in the second part of this blog….

Until then,
Kate.

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2 thoughts on “Finbar raises the bar on risk and innovation

  1. Hi Kate,
    I really enjoy and value what you forward. Keep up the good work.
    With respect to Innovation and risk, I offer the following.

    If the market leader is not also the market innovator, then eventually, there will be a new market leader.
    It is a core responsibility of market leadership to acknowledge and address this issue. To ignore or down play the long term threat is the greatest risk of all.
    Hence, to me, an appropriate balanced innovation strategy is mission critical. Equally critical is a sensible, balanced execution of the strategy. Great businesses do this consistently and sustainably. It needs to be embedded within the organisation’s DNA.
    Best of luck for 2017.
    Kind regards
    Geoff

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