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from a range of industries, the authors identified four common obstacles most boards face in governing innovation: an outdated risk agenda, insufficient time, lack of expertise, and a relationship with management that needs retuning.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

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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 2005, Vineet Nayar, the former CEO and Vice Chairman of HCL Technologies, and his wife, Anupama Nayar, committed $100 million of their personal wealth to found Sampark Foundation—a grant-making philanthropy with a mission to transform learning outcomes for 20 million children in rural government schools by 2025. By 2013, it was clear that Sampark was never going to reach 20 million children by writing grants. Vineet stepped out of the corporate world and over the next six years, applied the lessons he learned about leading change at HCL to transform Sampark into a “disruptive design shop” that leveraged frugal innovation and a “Teachers First” model of change to revolutionize India’s primary education system. By 2019, at $1 per child per annum, Sampark’s 130 employees had touched the lives of over 7 million students and 200,000 teachers across 90,000 public schools—unprecedented scale in the Indian education context and evidence that their “Teachers First” strategy was working. Demand for Sampark’s program was growing rapidly and Vineet now had the opportunity to reach 50 million children. Vineet had always believed in the transformative power of technology and had to determine whether Sampark could transition to a “Digital First” model.

Case | HBS Case Collection | July 2020

Kathy Fish at Procter & Gamble: Navigating Industry Disruption by Disrupting from Within

Emily Truelove, Linda A. Hill and Emily Tedards

When Kathy Fish, Procter & Gamble’s Chief Research, Development & Innovation Officer, and a 40-year company veteran, stepped into her role in 2014, she was concerned that the world’s leading consumer packaged goods company had lost its capability to produce a steady stream of disruptive innovations. This, coupled with intensifying competition from more agile, digitally-savvy direct-to-consumer companies, convinced Fish that P&G needed to renew its value proposition. She believed it was essential that all 100,000 employees see innovation as their job, and that all aspects of the consumer experience—not only the product itself—be “irresistibly superior.” But making this change would require wholesale transformation, which was challenging because P&G’s business units had decision-making rights for their businesses. Thus, when she launched GrowthWorks, an initiative to bring lean innovation to scale at P&G, Fish designed it to be business unit-led and corporately-supported.
Fish and her team tackled challenges as they emerged along the way, such as the need to adapt career systems. Fish took a “pull” versus “push” approach and it caught on like “wildfire,” eventually producing a portfolio of over 130 projects, and momentum that led P&G to headline the Consumer Electronics Show for the first time. While progress indicators were strong, the business units still struggled to incubate innovations, and Fish feared that unless P&G’s overall innovation performance management and reward systems changed, the new approach to innovation would not take hold in a sustainable way. Fish grapples with whether to take a more “push” approach and add innovation metrics to the business unit presidents’ annual scorecards, which typically focused on short term deliverables.

Keywords: female protagonist; Organizational change; organizational behavior; culture change; digital; digital transformation; innovation; lean startup; experimentation; metrics; consumer packaged goods (CPG); Leadership; Leading Change; Change Management; Organizational Culture; Organizational Change and Adaptation; Disruption; Innovation and Invention;

Citation:

Truelove, Emily, Linda A. Hill, and Emily Tedards. "Kathy Fish at Procter & Gamble: Navigating Industry Disruption by Disrupting from Within." Harvard Business School Case 421-012, July 2020. View Details

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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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