Lorrie Norrington has over 35 years of operating experience in technology, software, and Internet businesses. Norrington is currently an Operating Partner at Lead Edge Capital, and serves on the boards of Autodesk, Colgate-Palmolive Co., HubSpot, BigCommerce, and Eventbrite. She lives in Silicon Valley. This blog is part of the2017 NACD Global Board Leaders’ Summitseries.
A company’s board sets the tone from the top and oversees long-term strategy. However, now more than ever, boards also must actively work to understand technology trends and encourage a culture of innovation that drives long-term growth. The development of an innovation mindset has become an imperative for directors.
The pace of technological change is forcing governance needs to evolve faster than anticipated. As a result, the inability to innovate has become one of the biggest business risks in most enterprise risk management assessments. It is useful to understand that both evolutionary innovation (or the combination of small ideas into bigger change) and discontinuous innovation (which is disruptive to companies and industries) can render companies uncompetitive in months and years—not decades.
Below are some of the techniques I’ve used over the past decade as a director to keep current on my knowledge and help boards embrace technology and innovation.
Take It Personally
You don’t have to live in Silicon Valley or be a technologist to possess a solid working knowledge of innovation and technology trends. In our previous roles as executives, we were forced to keep current on business and technology changes. The same holds for board directors. It is up to you. Annual updates through events like the NACD Global Board Leaders’ Summit are essential to learn about key trends and best practices from other boards. However, given the rate of change, you cannot rely solely on annual updates. Every year, at a minimum, I read the top three business technology books on Amazon’s bestseller list, attend one technology conference (Mary Meeker’s annual pitch is a must), and read my favorite tech-focused publications (i.e., Recode and TechCrunch) daily. This routine enables me to engage in the boardroom with an informed perspective.
Go Beyond the CEO
With today’s rate of change, it isn’t realistic to expect the CEO to have all the answers regarding innovation efforts and how teams are applying technology. If your board has a technology and innovation committee, take time to understand executives’ areas of focus and ensure the agenda is balanced to include both the risks and opportunities technology change can create. If your board does not have one, ensure one of your board members is designated to engage regularly with the chief technology officer or chief product officer about their mid-and long-term innovation and technology plans.
Create an “Innovation System” for Your Board
A technology and innovation review should be part of your annual, board-level strategy or product review. Examining current technologies and innovations, as well as early-stage technologies and innovations that management believes to be part of the future, are two key behaviors to build as a part of your board’s robust “innovation system.” Last, by including technology and technical product skills as part of the criteria for new board members, you will ensure the board has the right skills long-term to encourage and challenge management.
In sum, boards set the tone for the entire organization. If you embrace technology and innovation, this empowers everyone throughout the company to do the same. In a world where the rate of technology and innovation will determine long-term success or failure, directors must embrace the changes needed to encourage and challenge management to accelerate their understanding of technology and the pace of innovation.
To learn more about technology and innovation, attend the 2017 Global Board Leaders’ Summit, Oct. 1–4, 2017, in National Harbor, MD. For the full Summit agenda, please visit the Summit website.
When Walter S. Isaacson winds down his 14-year tenure as the president and CEO of the Aspen Institute at the end of this year, his beloved hometown of New Orleans will be seeing more of him. Students in his classroom at Tulane University will be the lucky recipients of his rich knowledge and experience as he returns as a professor in those stately halls in the Garden District.
Walter S. Isaacson will speak at NACD’s 2017 Global Board Leaders’ Summit.
Isaacson, who has penned biographies of such greats as Benjamin Franklin, Albert Einstein, and Steve Jobs will speak at NACD’s 2017 Global Board Leaders’ Summit in October on innovation and disruption. (He will also release a new biography on Leonardo da Vinci in October.)
In addition to his work as a writer, Issacson keeps his governance plate quite full: he is a director of United Continental Holdings and an advisory board member of the National Institutes of Health. His nonprofit board service includes the Society of American Historians, the Carnegie Institution for Science, and My Brother’s Keeper Alliance. He also has served as an advisory board member at Perella Weinberg Partners, a global financial services and advisory firm, since 2015.
I recently had the opportunity to correspond with him via e-mail and ask him any question my heart desired. While the edited version of our full interview will run in the forthcoming May/June 2017 issue of NACD Directorship, I saved choice pieces from our exchange that unfortunately landed on the cutting room floor due to the physical constraints of a magazine page.
Many of my questions were inspired by newspaper headlines. “Why I’m Moving Home,” a recent New York Times op-ed piece by lawyer cum venture capitalist J.D. Vance, particularly grabbed my attention because it explores a common question: Can you really go home? Can you re-integrate yourself into that community—let alone revitalize it?
Isaacson seems to think so—and he’s a living example that it’s possible. Both he and his wife have divided their time between Washington, D.C. and New Orleans for some time. “I am happiest in my hometown of New Orleans dealing with issues of urban planning, jobs programs, and education reform,” he writes. “I got re-involved after Hurricane Katrina when I was made vice chair of the Louisiana Recovery Authority. My wife and I have a place in the French Quarter. I think there is more impact to be made when we act locally, and I am lucky that I have a deep passion for the town where I was born and raised.”
And how have the horrors of Hurricane Katrina shaped his worldview? The storm not only physically decimated New Orleans, but in its aftermath, the city’s population dropped by half largely due to storm-related displacements. Isaacson is determined to help reverse this radical demographic shift by invigorating education and entrepreneurialism to attract top talent and great thinkers back to the city.
“Hurricane Katrina reminded me of the value of home,” he writes. “I think that when we are looking for the good we can do and the impact we can have, now is a good time to be looking locally. I am fortunate to have New Orleans as my hometown. We are trying new ways to reform education and make an innovative environment for creative people and entrepreneurs.”
Do you have a similar experience of returning to your hometown to change it for the better? Do you serve on a board that inspires a company to better serve the communities in which the business operates? We’d love to hear from you. Share your experiences in the comment section.
Judy Warner is editor in chief of NACD Directorship magazine.
The uncertainty of looking to the future presses boards to consider how confident their senior executives and supporting teams are in executing strategy. How can the board help the companies they oversee to face the future with a greater sense of confidence?
Confidence is neither a cliché nor an assertion of mere optimism. Rather, it is a quality that drives leaders and their companies forward. The Oxford English Dictionary defines confidence as “the state of feeling certain about the truth of something” and “a feeling of self-assurance arising from one’s appreciation of one’s own abilities or qualities.” This definition focuses on the board and management’s appreciation of the collective capabilities of the enterprise, including the ability to carry out a company’s vision. It raises three fundamental questions:
Do weknow where we’re going directionally and why? Are our people committed to achieving a common vision that is clearly articulated, meaningful, and aspirational?
Are we prepared for the journey? Does our staff have the capabilities to execute our strategy? Do we have a great team, a strong roadmap, and the required processes, systems and alliances, and sufficient resources to sustain our journey?
Dowepossesstheability, will, anddiscipline to cope withchange alongthe way,nomatterwhathappens? Does our board have the mental toughness to stay on course? Is our management team agile and adaptive enough to recognize market opportunities and emerging risks, and capitalize on, endure, or overcome them by making timely adjustments to strategy and capabilities?
Definitive, positive responses to these questions from the board will enable confidence across the organization.
Looking back on experiences working with successful companies, seven attributes were identified that organizations must have when facing the uncertainty of future markets.
How to Build the Foundation for Confidence
Confidentorganizationssharecommitmenttoa vision. Commitment to a vision provides a shared “future pull” that is both inspiring and motivating. This perspective fuels enterprise-wide focus and energy to learn, which encourages participation and altruistic camaraderie. An effective vision crafted by the board and executive team leads people at all levels of a company to recognize that the enterprise’s success and their personal success are inextricably linked.
Confident organizations have a heightened awareness of the environment. A confident organization constantly reality tests its market understanding by facilitating effective listening to customers, suppliers, employees, and other stakeholders. Boards should encourage companies to generate sources of new learning, encouraging systemic thinking in distilling and acting on the environment feedback received, with the objective of driving continuous improvement. The confident organization fosters a culture of sharing and supports formal and informal continuous feedback loops to flatten the organization, get closer to the customer, and promote a preparedness mindset.
Confidentorganizationsaligntheirrequiredcapabilities. It is a never-ending priority of the board to ensure that the right talent and capabilities are in place to achieve differentiation in the marketplace and execute strategies successfully. Capabilities include an enterprise’s superior know-how, innovative processes, proprietary systems, distinctive brands, collaborative cultures, and a unique set of supplier and customer relationships.
How to Sustain Confidence
Achieving a foundation of confidence is necessary, but alone is not enough without concerted efforts to sustain confidence. Astute directors and executives know that the ability, will, and discipline to cope with change are also needed to sustain their journey. Those winning traits are enabled by the attributes below.
Confidentorganizationsare risk-savvy. The confident organization is secure in the knowledge that it has considered all plausible risk scenarios, knows its breakpoint in the event of extreme scenarios, and has effective response plans in place (including plans to exit the strategy if circumstances warrant). Most importantly, the confident organization should have an effective early-warning capability in place to alert decision-makers of changes in the marketplace that affect the validity of critical strategic assumptions. In a truly confident organization, no idea or person is above challenge and contrarian views are welcomed.
Confidentorganizationslearnaggressively. Confident organizations improve their learning by: creating centers of excellence; embracing cutting-edge technology to drive the vision forward; fostering an open, transparent environment of ongoing knowledge sharing, networking, collaboration, and team learning; perceiving admission of errors as a strength and requiring learning from the missteps; and converting lessons learned into process improvements. Aggressive learning stimulates the collective genius of the entire enterprise.
Confidentorganizationsplaceapremiumoncreativity. Innovation should be an integral part of the corporate DNA of the confident company, and should be evidenced by setting accountability for results with innovation-focused metrics at the organizational, process, and individual levels to encourage and reward creativity. Companies committed to innovation have the creative capacity to take advantage of market opportunities and respond to emerging risks. When innovation is a strategic imperative, companies empower and reward their employees to take the appropriate risks to realize new ideas without encumbering them with the fear of repercussions if they aren’t successful.
Confidentorganizationsare resilient. Confident organizations have adaptive processes supported by disciplined decision-making, and are committed to adapt early to continuous and disruptive change. They have the will to stay the course when the going gets tough, and are prepared to act decisively to revise strategic plans in response to changing market realities. They do not allow competitors to gain advantage by building large capital reserves, having great relationships with their lenders, and by cultivating trusting relationships with their customers, vendors and shareholders. The strategies that their boards approve include triggers for contingency plans that directors and management will implement if certain predetermined events occur or conditions arise.
In summary, the speed of change continues to escalate, creating more uncertainty about future developments and outcomes. If there was ever a time for a board to assess an organization’s confidence, we believe it is now. It’s one thing to have a confident CEO, but if the people within the entity lack confidence, the organization itself may not have the creativity and resiliency needed to sustain a winning strategy.
Jim DeLoach is managing director with Protiviti, a global consulting firm.