Page 78 - Harvard Business Review (November-December, 2017)

“ Sometimes
you need
to create
tension to
stimulate
thinking,
ideas, and
innovation.”
the CEO of Allstate, pointed out that it was a board
member from the manufacturing sector working with
OEMs and some of the hot start-ups in the connected
car space who was able to offer unique insights into
consumer behavior.
In addition, most board members we spoke with
wanted more people with technology experience—
so-called “digital directors.” They believed that direc-
tors from organizations reputed to be tech pioneers
were likely to be more familiar with the challenges
that come with doing innovative work and better
prepared to offer informed advice on how to address
them. They also wanted directors with the capacity to
assess whether or not their companies were investing
sufficiently in technology and associated talent.
To further bolster out-of-the-box thinking, a few
boards are explicitly including intellectual or problem-
solving diversity—difficult qualities to assess—in their
composition matrices. Most directors we spoke with
expressed concerns about whether their board com-
position was representative of their customers and
stakeholders (with regard to factors such as gender,
nationality, race, and ethnicity). And a handful of
boards are making serious efforts to bring in younger-
than-usual candidates, including Millennials, betting
from the traditional approach.
on potential rather than experience—a dramatic shift
For diverse individuals to collaborate effectively,
they need shared experiences and knowledge to
serve as a foundation for their interactions and deci-
sion making. Forward-thinking companies actively
develop the collective literacy and contextual intelli-
set of assumptions about where their industry and
gence of the board—cultivating, in particular, a shared
markets are going so that they are prepared to make
the right risk/reward judgment calls together with
management. Nearly half of the directors we spoke
with bring in experts from different or adjacent indus-
tries to hold “master classes.” Some hold sessions with
angel investors and venture capitalists to gain their in-
dustry insight. Others make visits to technology hubs
such as Silicon Valley, accelerators in emerging mar-
ing on the cutting edge of a given area. A few told us
kets, and companies and academic laboratories work-
they meet with key customers in small groups, while
others say that their entire boards attend industry
conferences together. Directors reported that all these
activities prompt important discussions about their
appetite for innovation by exposing them to “next
practices,” not just best practices.
Creative abrasion. This is the ability to develop a
marketplace of ideas not from a single flash of insight
but from a series of sparks generated through rigor-
ous discourse and debate. Boards today recognize that
creative abrasion is a core capability needed to engage
in innovative problem-solving. One board member
remarked, “Critical thinking is imperative, and that
involves putting some friction into [the discussion] to
fight the status quo.” Another stated, “Sometimes you
need to create tension to stimulate thinking, ideas,
and innovation.”
Indeed, the “mostly silent” board member is no
longer seen as doing the job. The outspoken director
once perceived as a “gadfly” is now accepted, even
welcomed, in the boardroom. Boards need to learn
to “tolerate some chaos” in meetings, according to
one board member, if they expect management to
engage in creative thinking. They must build a cul-
ture in which contrarian viewpoints are heard, even
actively seeking directors with the “willingness and
the dynamism to really mix it up in the boardroom,”
as one CEO told us.
We weren’t surprised to hear that many boards are
reluctant to have the frank conversations required for
innovation because the dynamics of creative abrasion
are so tough to manage. The default for many board
members is to avoid conflict and become “too polite.”
NOVEMBER–DECEMBER 2017 HARVARD BUSINESS REVIEW 107