Originally published in Harvard Business Review, October 23, 2017, and authored by former Egon Zehnder partner George Davis, EVP MacAndrews & Forbes, and Linda A. Hill, Wallace Brett Donham Professor of Business Administration at the Harvard Business School.
As firms scramble for competitive advantage, boards – once the cautious voices urging management to mitigate risk – are now calling for breakthrough innovation. Indeed, avoiding risk is now seen as the riskiest proposition of all.
In speaking with CEOs and board members from a range of industries, the authors identified four common obstacles most boards face in governing innovation: an outdated risk agenda, insufficient time, lack of expertise, and a relationship with management that needs re-tuning.
Embracing innovation and its inherent risks requires that boards and senior management develop new ways of working together. To bolster out-of-the-box thinking at their companies, boards should promote diversity among members. They should foster “creative abrasion” to keep ideas flowing and rethink traditional methods of governing. And they must learn to embrace and encourage risk.
Read the full article here.