Dottie Schindlinger - What Can Boards Do to Create Structure and Process Around Innovation?

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Feb 10, 2020
by Dottie Schindlinger
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Dottie Schindlinger - What Can Boards Do to Create Structure and Process Around Innovation?

Executive director at the Diligent Institute outlines four ways directors can cultivate innovation Dottie Schindlinger at Salzburg Global Seminar

This article is part of the series, the Salzburg Questions for Corporate Governance by the Salzburg Global Corporate Governance Forum

Among the line-up of this year’s nine films for the Best Picture Oscar was the movie Ford v. Ferrari. In the film, Ford Motor Company invests in building the first American race car to win the brutal, 24-hour long race at Le Mans. It’s a traditional portrayal of corporate innovation: there is the spark of an idea, and then a massive, expensive (and even a little crazy) process ensues, with a new invention being tested and refined behind closed doors until it’s ready for the market.

The reality of innovation today is as far from this depiction as Michigan is from France. Today’s approach is one of rapid iteration – bringing products to market as quickly as possible, even before they are fully developed. For teams of designers, engineers, marketers, and salespeople, the cycle of “inspect and adapt” has become the norm. But how does the innovation cycle play out in boardrooms?

Four Ways Directors Can Cultivate Innovation

1. Put innovation on the board’s agenda

It might sound simple, but a good place to start is to include discussion of innovation at board meetings.  More importantly, make sure those discussions aren’t limited only to innovations in current plans and products (such as novel ways to reduce costs).  Dedicating time on the board’s agenda to stepping outside the “comfort zone” can help generate creative discussion. 

Serial tech entrepreneur and corporate director Betsy Atkins share some great strategies in her recent interview on The Corporate Director Podcast: set up annual learning opportunities for directors that include offsite “technology tours” in places like Silicon Valley and hold working dinners on themes like “digital transformation” with external expert presenters with competing viewpoints to spark board conversation.

2. Make sure the board has the right talent in the room

In a recent survey, when asked if they felt their boards had the right talent in place to help their companies thrive in this age of digital disruption, nearly half of directors responded either “no” or “not sure.” This is hardly surprising – directors with digital technology expertise are scarce.  A recent study by MIT reviewing over 1,200 public companies with revenues over $1 billion found only 24% had directors with technology expertise.

To help spur innovation, boards should consider expanding the profile of directors they are recruiting – but don’t fall into the trap of looking for a generic “digital director.” In our recent book, Governance in the Digital Age, AI expert Dr. Anastassia Lauterbach summarized it perfectly: “Boards need to do a better job crafting board profiles and understanding the areas they need to strengthen… Someone who understands how to protect networks might not be the right person for harnessing technological innovation for competitive advantage.”

3. Create a culture of shared curiosity

Growth is critical, but growth is not a strategy. Boards must keep their eyes on the horizon and remain open to new opportunities, while simultaneously ensuring that the company has not fallen into the trap of staying too long with a strategy that has become obsolete. There are many examples of companies and industries that have been plowed under by digital disruption – the taxicab industry vs. ridesharing apps Uber & Lyft, Kodak vs. digital photography, and Blockbuster Video vs. digital streaming video.

Directors who feed their own curiosity can help companies gain a competitive advantage. Directors should constantly be self-educating themselves by attending conferences, reading, listening to podcasts, watching TED Talks, gaining exposure to new ideas – and share what they learn to elevate the level of board discussion.

4. Disrupt outdated board processes

The way most companies communicate with boards isn’t particularly innovation-minded. Consider board reports: lengthy documents that are carefully crafted, reviewed, and vetted by multiple individuals before finally being sent to the board. The information could be weeks old by the time a director reads it, and any questions must wait for the meeting. This formal process can be stifling to innovation, which requires greater openness and agility.

But as with most other teams throughout the company, boards can now leverage digital tools to share information and collaborate.  Companies can digitize board documents and distribute them to shorten the information lag time considerably. New AI-fueled tools allow directors to benchmark company performance, spot potential areas of opportunity or vulnerability, and plan various scenarios. Giving boards these kinds of tools reduces the effort of routine board work, freeing time, and brain space for more creative discussion. And it provides directors with the opportunity to use digital technology in ways that help them “see around the corners.”

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We encourage our readers to share your comments by joining in the discussion on LinkedIn.


Dottie Schindlinger is executive director of Diligent Institute, the research arm of Diligent Corporation, leading provider of modern governance software. In her role, Dottie researches and presents findings on the intersection of governance and technology as a recognized expert in the field. She is the co-author of Governance in the Digital Age: A Guide for the Modern Corporate Board Director, and co-hosts The Corporate Director Podcast. Dottie was a founding team member of BoardEffect, a board management software platform serving nonprofit boards, acquired by Diligent in 2016. Prior to BoardEffect, she spent 15 years working in a variety of governance roles, including as a board support professional, consultant, trainer, board member, and senior executive. Dottie graduated from the University of Pennsylvania with a B.A. in English. Dottie is a Fellow of Salzburg Global Seminar.

The Salzburg Questions for Corporate Governance is an online discussion series introduced and led by Fellows of the Salzburg Global Corporate Governance Forum. The articles and comments represent opinions of the authors and commenters, and do not necessarily represent the views of their corporations or institutions, nor of Salzburg Global Seminar. Readers are welcome to address any questions about this series to Forum Director, Charles E. Ehrlich: cehrlich@salzburgglobal.org. To receive a notification of when the next article is published, follow Salzburg Global Seminar on LinkedIn or sign up for email notifications here: www.salzburgglobal.org/go/corpgov/newsletter

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