Topics:   Corporate Governance,Strategy

Topics:   Corporate Governance,Strategy

April 25, 2018

Innovation: Beyond Technology

April 25, 2018

The word innovation typically conjures up images of new technologies like networked sensors and quantum computers. That was certainly my focus when I wrote my February blog on the age of innovation. We had just closed NACD’s cutting-edge program at the Consumer Electronics Show, and the buzzing excitement felt on the showroom floor was on my mind.

But as directors, we know that although tech is important for our businesses, it’s merely a means to an end: sustainable growth that benefits all stakeholders. Technology plays a major role there, of course, but the real drivers of company value are people and, more specifically, culture.

Recent remarks by Facebook CEO Mark Zuckerberg before the Senate’s Commerce and Judiciary committees, as reported by the Washington Post, made this point clear. During the hearing, Zuckerberg told senators that Facebook is going through a “broader philosophical shift.” This is precisely why my recent focus at NACD has been cultural innovation.

When I became CEO of NACD in January 2017, I knew from my previous 16 years here that we had a strong culture. I had seen our staff grow from 12 to nearly 100 during those years, most typically through internal promotion and the hard work of engaged teams. But what was our cultural secret? Could we articulate it, and thus preserve it and pass it on? I got a head start on the topic by serving on the NACD Blue Ribbon Commission on Culture as a Corporate Asset, which released its report in late 2017. But there was more to come.

One reason I was chosen as NACD’s president and CEO was that the board knew that I would champion corporate culture as a core asset of the organization. Quoted in Lori Sharn’s CEO Update story, our chair, Dr. Karen Horn, stated, “The top people have all been together a long time and really share these values. Because we’re growing so fast, we’ve brought in a lot of new people to the organization. We need to be sure the new people feel the same kind of engagement and buy in to the current culture, and buy in to the development of the ongoing culture.”

Encouraged by the board, one of my first acts as CEO was to establish a Directors Council, made up of the 13 director-level managers. The Council meets every other week to promote collaboration across departments, with the goal of continuing to foster a healthy, thriving culture. The Council suggested that we develop a Values Statement, so we appointed a Values Squad made up of Council members to interview staffers, and by summer a first draft was ready. The six values, which were formally announced in a soft launch to staff in January, follow:

  • We are one NACD.
  • We succeed through member impact.
  • We communicate openly.
  • We deliver.
  • We are continuous learners.
  • We are innovators.

The current phase of this initiative is to weave these six values into the fabric of our organization, and the board has been engaged throughout.

As our own internal effort at NACD demonstrates, directors can make a tremendous difference in culture. In her March 26 blog, Andrea Bonime-Blanc suggests that directors ask management if there is an “explicit culture program in place,” and if it is “intertwined and integrated” with the company’s mission, vision, values, and strategy—all clearly board-level issues.

Along these lines, a recent blog covering a March 28 panel discussion at a Leading Minds of Governance event was aptly titled “Experts to Directors: Innovation, Culture Change Starts With You.” As the blogger (our own Katie Swafford) said, “There is a buzz in the air about renovating corporate culture in the name of innovation.”

I, for one, have heard—and amplified—that buzz. Have you?

Comments

Jim DeLoachApril 26, 2018

Great article, Peter. There is indeed a buzz.