This article follows on from the article “A Brief History of Failure” .
Back in November 2019, the Australian Institute of Company Directors (AICD) in its Company Director magazine urged Australian industry and boards to "get off their laurels and start innovating".
"Currently just three percent of Directors say they have science and technology expertise, or international expertise" according to Kee Wong, Chair of the Technology Governance and Innovation Panel of the AICD.
Wong is quoted as saying that every company Director in Australia has the responsibility to educate themselves and understand the difference between maintenance innovation (business as usual but faster, at a lower cost) and transformative innovation (creation of a new design or paradigm).
"Maintenance Innovation COULD be seen as boring"
Transformative innovation is sexy - shiny new products and amazing disruptions are the stuff of which headlines are made! Think Elon Musk with Tesla and SpaceX, the kings of disruptive innovation.
Maintenance Innovation could be seen as boring, because what it does is reduce the size of your fixed costs. It lifts your standard back-end processes to be as efficient and speedy as possible and is normally seen as the foundation of your Transformative Innovation.
The innovation cycle is fraught with risk and in most organisations the Board sets the culture for risk appetite.
Unfortunately most board members are of an age where they have cut their teeth in a much more stable and slower moving world. As a result, their approach to risk taking is often inappropriate for the long term health of today's organisations. Risk carries opportunity as well as cost, and too often the opportunity side of the equation is ignored. The failure to innovate is seen more and more as a significant risk in itself.
Richard Goyder AO (Chair of Qantas and Woodside Petroleum) in an interview in March 2020 stated that “we need to make sure we’re challenging the status quo and also giving management teams the capacity to look at, and implement, strategies that may actually have a short-term consequence, but over the longer run, are going to be better for the company.”
Richard Goyder is a forward thinking Board Chair – he understands the concept that short term “failures” are likely necessary for long term gain. It's important that we encourage and educate the boards of all organisations to understand that so long as they approach risk the right way, then the concept of "failure" changes dramatically.
“Fail to innovate” is a play on words – organisations need to fail in order to innovate, but there is also a great risk of failure of the organisation if it DOES NOT innovate.
At AgileXperts, our consulting focuses on generating the right approach to minimise downside and maximise the opportunity for innovation. We can help Boards, C-Suites and Directors to unpack and understand your own definition of success in the innovation space and beyond and then work with you on your journey to finding that success. There is no silver bullet or magic solution – every organisation is unique and complex. It takes time, effort and commitment to achieve greatness and AgileXperts has the experience and knowledge to guide and support you on your journey.
Author: Brett Cowan, Executive Director, AgileXperts.