Ambidexterity – How Do I Engage Our Board & What’s Their Role?

Building a two-gear organization (aka ambidexterity) is the senior leader’s Job One. Can we both protect the core business with OpEx/Lean AND ignite new Growth with digital methods? So, how do we engage the Board and what’s their role?

Doing nothing is our riskiest option...

Let’s start with the second question. The role of the Board includes:

• 1.     Oversee strategy.
• 2.     Oversee risk management.
• 3.     Assess the CEO and plan for succession, and
• 4.     Develop & oversee executive compensation plans.

The purpose of a high-performance Board is to secure & sustain the creation of value and prevent the destruction of value. Ambidexterity is a core element of risk reduction, and therefore of strategy in the 21^st C. Ambidexterity inoculates us to our era’s dark triad of risk – obsolescence, ceaseless turbulence, and Black Swans.

The Board, therefore, must ensure the company’s winning logic & strategic plan explicitly address ambidexterity and commit to developing the needed capabilities. The Board must also a) ensure the annual business plan translates this into concrete action & metrics, b) align incentives, and c) monitor & assess progress.

Doing Nothing Is the Riskiest Option

How do we engage the Board in our quest for ambidexterity? Board members usually come from areas like Operations, Finance, and Engineering, and have deep insight in how to protect the core business. But they’re usually less familiar with the methods & mental models of disruptive innovation.

So, Board members are at a distinct disadvantage when asked to assess, say, a portfolio of innovation initiatives. All the usual indicators – Market Share, Revenue, Profitability, ROI, CAGR and the like – are zero. By contrast, the existing business portfolio, even if it’s in decline, reliably generates measurable value. So, the Board member’s mind & gut say, “Stop!”

But shooting down innovation initiatives is our riskiest option. How will we grow? How will we learn? How will we build our muscles for the daunting challenges ahead? Some Boards are committed to growth through M & A. Nothing wrong with a well-planned & executed M & A. But if our organization fails to embrace disruptive innovation, how will our new acquisition grow? In my experience, the new unit absorbs the mindset of the mother ship – and adieu, innovation.

So, how do we help the Board understand disruptive innovation? I’m partial to Executive Forums, Learning Expedition, and Board mentorship. I’ve addressed that last one in earlier articles.

Executive Forums

My colleague & co-author, Laurent Simon, has organized a series of Exec Forums in Singapore in partnership with our joint alma mater, INSEAD (‘Business School to the World’).  Our idea is to connect senior executives with a) peers from other industries facing the same challenges, and b) talented ecosystem practitioners who can demonstrate both what’s happening, and what’s possible.

Learning Expeditions

These entail visits to an innovation hot spot and the leading industries therein over three or four days. Each attendee accepts a specific learning objective & must report out what they saw & what it means at a structured debriefing. (No corporate tourism). Learning Expeditions are a major undertaking, but tremendously valuable. A high-performance innovation team in the midst of a splendid sprint is hard to forget!

In summary, the Board has a leading role in Strategy and Risk Management. By educating the Board on the methods & mindsets of disruptive innovation, we can help them understand ambidexterity. And that doing nothing is our riskiest option.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org