Adding corporate board members needs to be a mutually beneficial move for startups. These individuals have the ability to share their experience and knowledge to help the startup get to the next level and spark innovation at the company.
So, how can a board member influence innovation? Here are a few suggestions:
Build specific objectives, such as implementing and running innovation programs, into the objectives of the CEO and executive staff members. Make sure these objectives have measurable outcomes.
Do not base these engagements on venture investments, but on new products or offerings either through partnerships or trials. Make the CEO’s pay tied to progress against these objectives.
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Innovation cannot come from within your existing management and operating infrastructure (the innovator’s dilemma clearly defines these challenges).
To support business sustainability, you must encourage testing of products and services that are disruptive and potentially cannibalistic to your existing offerings. Build opportunities for partnerships with entrepreneurs. You can do this effectively without disrupting your current operations and then deepen your partnership with those startups that prove effective.
Encourage Transactions with Startups
The most effective ways you can transform your company is to hand over some of your company operations to a startup operator. For example, digital account planning, AI analysis of logistics, drone inspections, robotic audits, or improved employee health.
Work through your procurement process to ensure effective vetting of startup services, but simplify the procurement and contracting process for them. You want to encourage procurement for innovative services.
Define a target volume of business that the executive team must transition to an external startup entity.
“#givefirst” is the Techstars mantra. It seems very egalitarian at first, but in today’s world it is essential. Some of the most disruptive ideas and subsequent solutions have come from serendipitous conversations with complete strangers. Open your door to those who really want to engage.
Encourage your executives to allocate time to mentor, to discuss concepts on panels, to judge presentations and to contribute their domain knowledge to those building the new companies of the future. Encourage, but do not require mentorship. Not everybody is cut out to be a mentor.
Define targets for each senior executive around engagement. It might include mentorship, blogging, developing a new initiative, or a board seat on an entrepreneur focused non-profit. The personal learning as well as the open reputation you develop will result in the kind of engagement that can lead to success for all parties.
Lastly, demand agility. When I hear the corporations I work with say we just need to be more agile, my response is, you can’t, because it’s hopeless. There is simply no way that a large organization can move like a small, nimble startup. It is cognitive dissonance.
Managing externally driven innovation and disruption is a discipline that must be developed. The primary fiduciary responsibility of a corporate board is the sustainability of that corporation as a going concern. Maximizing rents is a noble goal but certainly not achievable when it’s not feasible even to survive.
Today’s corporate board must hold the executive team accountable to the pragmatic disruption of their business. Disrupt or be disrupted.
Read more about startups adding board members at Tech.Co.