Innovation is vital to an organization’s success, and those that proactively understand it can be used as a strategic tool for rapid business growth and sustainability will not only survive in this current age of disruption, but thrive.
According to McKinsey, more than 70 percent of senior executives said innovation is one of the top three drivers of growth. However, driving innovation is not about expecting a team to develop an agile culture and solid processes. That is only a part of the equation. What defines true innovation is how companies perceive and solve complex challenges, and these challenges are increasingly being brought to the boardroom.
Leading innovation in the boardroom.
Boards are no longer solely expected to focus on core business initiatives, financial monitoring, and mitigating risk, they are now being called on to lead breakthrough innovation. In the run-up for competitive advantage, embracing innovation and its inherent risks and challenges requires boards and senior management to find new ways of working together.
PA Consulting Group found that two-thirds of the organizations in the United Kingdom felt that innovation is crucial to survival, yet fewer than a third say they are innovating successfully to drive growth and increase revenue. So, how does a board not only support innovation, but actively achieve it?
The Abilene Paradox.
Early in my career, when leading a massive business transformation, I studied the Abilene Paradox. The term was introduced by management expert Jerry B. Harvey in his 1974 article "The Abilene Paradox: The Management of Agreement." Briefly, the tale is about a family that agrees to take a long car ride to a diner in Abilene, Texas. It's only when they get home, hot, dusty and tired after a mediocre meal, does each family member admit they didn’t really want to go. The paradox reflects the premise that human beings can make a collective decision that is counter to the thoughts and feelings of its individual members. In business, this translates to the inability to manage agreement; where everyone believes that their own preferences conflict with the group's and no one raises objections.
Innovation demands productive conflict.
Conversations around innovation require debate, tough questions and often conflict among individuals with diverse perspectives. “Going along to get along” is hardly a sufficient strategy to drive growth. Further, the desire to support innovation and create new ways of working together is not always accompanied by the ability to do so. Unproductive interaction, not the lack of vision, can be a stumbling block, such as when the leadership team fails to support “productive conflict.”
Productive conflict is defined as an open exchange of conflicting or differing ideas in which parties feel equally heard, respected, and unafraid to voice dissenting opinions for the purpose of reaching a mutually comfortable resolution. “The willingness to have hard conversations is often what distinguishes high-performing boards,” says Philip Eliot, an Orchid Black Operating Partner who has served as a director on 10 private venture-backed company boards and on numerous other boards as a non-voting board participant.
To encourage out-of-the-box thinking, boards should . . . foster “creative abrasion” to keep ideas flowing, and they must learn to embrace and encourage risk.
Optimizing group dynamics.
The boardroom setting rarely facilitates the type of open and courageous dialogue that is required for enabling innovation. Yet, that is slowly changing. However, board members often report a reluctance to ask their most-pressing questions because they don’t want to be perceived as second-guessing management or as being critical towards the CEO in front of their team. Meanwhile, CEOs often feel their boards’ arm’s-length behavior inhibits the understanding and support required to forge ahead and innovate.
Boards are now in a unique position to help their companies redefine the future of their organizations and must step up to the challenge of supporting innovation that leads to sustainable growth.
Building a process that enables positive conflict.
Facilitating productive conflict is a process that requires both education and planning, but it’s shown that engaging in conflict at work leads to better work outcomes, innovation, improved relationships, higher job satisfaction and a more inclusive work environment. Governing innovation requires that boards and management take a thoughtful look at the ways in which they interact with each other and work to build a process that enables positive conflict. Here are a few important areas of focus:
Individual Awareness: Understanding and appreciating your own emotional responses to conflict is the centerpiece of the process. Those with higher emotional intelligence possess a greater level of confidence in dealing with conflict. Managing one’s emotions and understanding others emotions leads to productive conflict behavior.
Ground Rules: As in any group environment, establishing behavior boundaries enables a free flow of ideas, conflict and alignment. Work with your colleagues to build a clear set of rules for engaging in productive conflict. Simple things work best. For example, review the idea and not the person, offer alternatives, and provide evidence for your point of view. Each situation and group dynamic will dictate the best set of guidelines.
Personal Relationships: Really get to know the other people around the decision-making table. “Time spent together outside of board meetings, both one-on-one and as a group, is critical to building the trust necessary for constructive conflict within the board,” says Eliot. Leaders must build relationships with colleagues through candid dialogue around business and personal goals.
Encouragement & Enablement: Encourage each other to disagree productively. “Proactively asking, ‘How might my idea be wrong?’ or ‘How might this fail?’ can sometimes elicit criticism that would otherwise be held back,” suggests Eliot. Or experiment with orchestrated conflict led by an experienced facilitator. If a colleague routinely refrains from engagement, offer coaching options to build their confidence in disagreeing.
In the Abilene Paradox, no one in the family raises objections to driving to Abilene. Don’t let your team take that trip to Abilene unless everyone aligns around wanting that piece of blueberry pie.
Bob Caruso is an accomplished business leader with a track record of building high performance teams through empowerment, innovation, and creativity as a senior executive in the Aerospace industry and with multiple professional services firms. As a practical problem solver that focuses on outcomes, his operating style delivers real value quickly. He is a dynamic keynote speaker and published writer on the topics of customer and employee engagement.
To learn more, Bob can be contacted at: bc@orchid.black.
