— Governance Matters (@GovernanceMatt) February 16, 2017
Picking up on where we left off last time, may I start by saying that when we talk strategy these days, there’s a desperate need for us to take a giant leap.
Gone are the days of incremental change…the world changes rapidly and we must change with it.
A risk averse and compliant board tends to pull away from a risk-taking mindset.
And while strategy doesn’t always work out, boards need to have the integrity to invest in this.
There are, I believe, three key ways of helping to do just this.
Firstly, in appointing people to the board, look for someone who brings something completely different to the table, someone who’s atypical in the way they view the world, someone who is not of the standard lawyers and accountants who tend to fill many board positions.
I’m not for a minute suggesting there is no need for the lawyers and accountants. There is…they are a crucial part of the mix and their skills add greatly to the successful functioning of the board.
But why not think more broadly and find someone, for example, who is a highly innovative individual, an enterprising sort who has taken risks before and succeeded…and will continue to take them?
Secondly, you’d be wise to invest in a ‘Crazy Ideas’ session, where nothing is unworthy of discussion, nothing will be frowned upon and literally everything is worth considering.
I recall one of these sessions with a smaller financial institution, when they did not have the level of capital required to take on certain business risks in lending because the regulator insists that capital is kept at a particular level.
The ‘Crazy Ideas’ session suggested the institution look to do something through the association that represents all of these smaller financial institutions – and this way amass the required capital.
If adequate enough and through the central agency, the funding could then be divvied up among the association members, allowing them to take on the lending risks.
And thirdly, there was the case not that long ago when an organisation whose board I sat on was grappling with whether to move from certain services to specific products.
It was a tough call and many agonising sessions later, we were no closer to an agreed position.
Then someone had a eureka moment and suggested we call Mensa and ask whether any of their members would be interested in spending half a day with us to help us in our deliberations on this vexing matter.
The call was made, we got five Mensa members attending the session, they absolutely loved it, we loved it, the air was filled with great thinking and we were able to explore the issue and look at the products from every possible angle.
It was a great success.
The message, then, is that we should not deal with strategy in the boring old ways.
— Governance Matters (@GovernanceMatt) February 17, 2017
We need to seek and obtain permission to think outside the box, to innovate, to take calculated risks and to do things differently.
Until next time,