The Board's New Innovation Imperative

Linda A. Hill; George  Davis

Article | Harvard Business Review

The Board's New Innovation Imperative: Directors Need to Rethink Their Roles and Their Attitude to Risk

by Linda A. Hill and George Davis

Abstract

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from a range of industries, the authors identified four common obstacles most boards face in governing innovation: an outdated risk agenda, insufficient time, lack of expertise, and a relationship with management that needs retuning. 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.

Keywords: Governing and Advisory Boards; Innovation Leadership; Risk and Uncertainty; Corporate Governance;

Format: Print

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Citation:

Hill, Linda A., and George Davis. "The Board's New Innovation Imperative: Directors Need to Rethink Their Roles and Their Attitude to Risk." Harvard Business Review 95, no. 6 (November–December 2017): 102–109.

In this video supplement to the HBS case study "Tom Kalil, Deputy Director for Technology & Innovation," case protagonist Tom Kalil discusses leading a team of policy entrepreneurs at the White House Office of Science and Technology Policy from 2008-2016.

Iz-Lynn Chan, assistant director of retail business group and service quality and vice president of Far East retail consultancy for Far East Organization, a private real estate developer group in Singapore, raises service standards in the company's hospitality portfolio, Far East Hospitality. Chan and her small team in the Service Quality and Standards Department (SQSD) for Far East Organization apply to the Singapore government for the National Customer Centric Initiative (CCI) for Far East Hospitality. After being awarded the CCI, Chan must make some tough decisions about how to carry out the CCI. Despite Far East Hospitality's leading market share in mid-tier hotels and serviced residences, there had been a number of new entrants into the market and competition is fierce in Singapore's hospitality industry.

This case explores the role of Tom Kalil as Deputy Director for Technology & Innovation at the White House Office of Science and Technology Policy. With the end of President Obama's Administration drawing near, Kalil and his team of "policy entrepreneurs" must work to build an ecosystem of individuals and organizations both inside and outside the Federal government, if they hope to see their science & technology initiatives continue into the next Administration. The case allows for discussion of the following: leading innovation ecosystems, building public-private and public-public collaborations, leading system innovation, talent management and development, and public sector innovation.

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The Board's New Innovation Imperative: Directors Need to Rethink Their Roles and Their Attitude to Risk

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