Should your Board be Governing for Disruption?
- Posted by Richard Stringham
- On August 14, 2019
- Ends, Executive Limitations, Strategic Focus, Strategic Leadership
If you observe boards over time, you start to see some interesting patterns. A couple of decades ago, boards of non-profits were prone to direct their CEOs to enter into partnerships. Closer examination would reveal that it wasn’t just boards that were pushing partnerships; much was driven by funding agencies, particularly government funding agencies.
From the funders’ perspectives, this made sense. Why should the funder choose between two or more similar initiatives from individual organizations when they could deal with just one initiative from a partnership? And let’s face it, there have been too many cases in which boards and/or management have viewed their organizations as kingdoms in which other organizations were competitors, not potential collaborators. Expecting partnerships was one way to overcome unhealthy rivalries.
But partnerships weren’t always adding value. Some could be downright cumbersome and inefficient for achieving intended results. Organizations don’t exist to achieve partnerships.
Fast forward a few years when boards were calling on their CEOs to be innovative. It wasn’t that they were just open to innovation; instead it was an expectation that the CEO had to be innovative if she was to earn a bonus or whatever form of reward the board was offering.
Don’t get me wrong; I can get fairly pumped about innovation. However, I’ve also been involved in a project in which we were too far ahead on the innovation curve. We developed a website to serve members which provided an innovative array of features, well ahead of similar, often much larger member organizations of the day.
It was a costly project in terms of both external and internal resources, and it came with an extraordinary number of headaches as we worked out the kinks in the system. But the kicker came when, a couple of years later, much cheaper off-the-shelf products were readily available with far less issues.
Today’s flavour? Disruption. We have witnessed the startling growth of technologies and enterprises that are radically transforming the marketplace. Consequently, organizations which had been depended upon for their stability and longevity have been displaced, often overnight, by disruptive forces.
But before directors are too quick to jump on board the disruptive train, let’s recognize a few historical lessons from our approach to partnerships and innovation. It would be imprudent not to be on the alert for risks and opportunities related to disruptions in technology and the marketplace.
But it would also be imprudent to chase after disruption for the sake of disruption. Disruption works when it creates greater effectiveness or efficiencies or addresses a need that is not otherwise being met; three outcomes which are worth pursuing.
So, boards and management should be watching for and be ready for potential disruptive forces and opportunities; but don’t lose sight of the reason your organization exists…..it isn’t to be disruptive! As a board, be clear on the expected results and ensure that you have put off limits those conditions or decisions which would be imprudent regarding flavour of the day means (both those created by your organization and experienced from others).