Governance at the speed of innovation
Human history, if you like, is a story about constant innovation, progress and technology. We’re inventors, and from the wheel to vaccines to space flight, we’ve created machines and medicines to improve our lives.
But in the second half of the twentieth century, something changed. The pace of invention accelerated exponentially, and it shows no sign of slowing. This acceleration is mainly due to digital technology and its ‘long tail’ of innovations, including computers, computer networks, mobile devices, social media and other related advances.
Fairchild Semiconductor and Intel co-founder (and later Intel CEO) Gordon Moore posited in 1965 that the number of components per integrated circuit would double every year for at least a decade. In 1975, he revised his statement to predict a doubling every two years.
‘Moore’s Law,’ as it became known, has roughly held since, but technology isn’t the only thing changing fast: so are our societies. Society and technology are intrinsically linked, as changes in one can trigger changes in the other.
Rapid innovation: A governance challenge
What does this mean for governance? Shareholders, stakeholders and the general public can access more information faster than ever – and they’re not afraid to broadcast any doubts or concerns.
At the recent International Governance Leadership Conference (held in Sydney at the end of August 2023), noted social entrepreneur, business leader and technology innovator Kristofer Rogers spoke on ‘Governance at the speed of innovation.’ He posed critical questions about how governance can keep up with hyper-innovation and the importance of pivoting to meet new trends and challenges.
His central thesis was that ‘governance today is less about lessons learnt and more about embracing change and improving what you already do.’
The key challenge facing boards is how to perform their duties – especially their responsibility to prepare their organisations for future challenges – in our information-dense and often politically charged environment.
Is governance the key to a secure future?
Near-constant innovation can make it difficult for boards to position their organisations to thrive, maintain their social licences, and play their part in ensuring a safe and prosperous future for all. Boards have many responsibilities, including, but not limited, to:
- Vision and leadership
- Risk management
- Embracing technology
- Managing talent and diversity
- Collaboration and communication
- Maintaining a long-term perspective
- Supporting continuous learning
- Creating a supportive culture
- Monitoring performance
- Prioritising openness to change
Beyond these, governance in our age of hyper-innovation requires adaptability, a focus on sustainability, data-driven decision-making and a willingness to embrace disruption. It must keep up with a rapidly changing business landscape by fostering a culture of innovation and continuously evolving to meet new challenges and opportunities.
Rogers noted that many organisations now embody ‘leapfrog culture,’ with businesses responding to the new paradigm of radical innovation in one of two ways: incumbents double-down on their market positions, while challengers take bigger risks to win market share (and ‘leapfrog’ the incumbents).
In both cases, strong governance can position organisations to successfully navigate challenging waters by balancing new risks (and opportunities) against existing strategic goals. Those strategic goals may sometimes need to change – but that’s another story.
A robust platform for business: a necessity, not a luxury
Technology is simply an enabler, a set of tools to help individuals and organisations perform their tasks better. To meet their responsibilities, boards need a fast and secure platform running portal software that facilitates communication, discussion, information-sharing and more.
We believe that such technologies are longer a ‘nice-to-have’ luxury; for organisations that want to be competitive for talent and business, they’re a ‘must-have.’ Key capabilities these platforms should provide include:
- Centralised information
- Real-time updates
- Secure communications
- Collaboration and discussion
- Remote access
- Time and cost savings
- Board evaluation and performance tracking
- Secure voting and decision-making
- Analytics and reporting
- Integration with other tools
Rogers noted that as technology simply amplifies outcomes, the human elements of governance remain paramount. He emphasised that modern-day technologies – such as smartphones, which are more versatile and capable than most prior technologies – can vastly improve our ability to communicate with others and thus perform our duties.
Governance at the speed of innovation
Boards must learn and adapt while operating within their organisation’s strategic plans, which may need to be adjusted ‘on the fly’ in response to new developments and opportunities.
Social, not technological, change will define the future, Rogers posited, with technology’s positive social impacts outweighing the negatives. Organisations must embrace innovation and create cultures that balance continuity and established practices against necessary change to prosper.
The challenge is as enormous as the opportunity. Beyond technology, boards will require flexible thinkers with a firm grasp of current best practices and institutional knowledge and the ability to adapt and adopt new technologies, business models and opportunities.
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