At a recent Leaders’ Edge Luncheon held in Melbourne, David Thodey AO FAICD, chairman of CSIRO and the government’s go-to adviser on innovation, shared ways directors can successfully drive innovation and change from the boardroom.

    David Thodey’s innovation action items for directors11:52

    Disruptive technologies are not the only catalysts for innovation. Organisations, regardless of sector, are affected by the shift in demographics of our workforces, customers and society at large, a lack of trust in both business and politics, a disparity of wealth, interconnectivity and global economic and political change.

    “In all my years of working in technology, I recall no other time with such a great scale and rapidity of change,” reflects David Thodey AO FAICD, chairman of CSIRO and former CEO of Telstra and IBM (ANZ). “And there is a great opportunity to get ahead of the game. Directors shouldn’t leave innovation to chance.”

    Thodey believes the most successful approaches to innovation rely on the active, authentic leadership of directors. Innovation takes discipline and requires hard, rigorous work. To succeed, directors need to consider the following:

    Be clear on what the organisation is and what it isn’t

    An understanding of the organisation’s core business is the first critical factor in approaching innovation and managing large-scale change within any organisation. “Just because something is possible, doesn’t mean you should do it,” explains Thodey. 

    Directors should not get distracted by the infinite innovation possibilities available. Instead they should revisit an organisation’s purpose, its vision and its core offering and reflect on how an innovative idea can enhance it.

    Use your customer as an agent of change

    Good customer service and engagement is key to the long-term success of any business and “the best organisations put the customer first,” he says. “The customer is a strong driver because if [an organisation] is truly customer centric, it never stands still – it is always innovating.”

    Thodey gives an example from his years at Telstra, where as CEO he set a single target for the whole organisation: better customer service. “Not everyone had control over the outcome, but every single individual in the organisation was interdependent in achieving it. It is often uncomfortable and difficult to do – it goes far deeper in the psyche of people – but lifts the organisation.”

    Bring a learning attitude to the boardroom

    Inspiration for innovation can come from a number of places, one of which being the innovation occurring in the world around you. Directors should bring an open mind and a thirst for knowledge to the boardroom.

    Today we see entire boards and executive leadership teams travel to international innovation and entrepreneurial hotspots like Silicon Valley and Israel to learn from the experts. While immersive trips like this are worthwhile, Thodey’s advice for staying up to date is to have a daily injection of what thought leaders are saying about the latest trends by subscribing to RSS feeds like MIT News. “It stimulates your thinking about what you’re doing today,” he says.

    Create a culture that will enable change to flourish

    Culture is the biggest determiner of how people respond to change, and boards are ultimately responsible for creating a culture that encourages and embraces change and innovation. They are responsible for choosing a CEO who will foster a culture conducive to ideas sharing, for driving productivity, efficiency and creating new opportunities. “Innovation is an attitude of mind,” Thodey adds. “It’s what you do with it that counts.”

    Ensure innovative ideas are always supported by processes and structures

    “You can’t leave innovation to chance,” says Thodey. “It needs to be supported by proper processes and organisational structures to truly work.”

    Social media platforms, for example, are an effective way to capture ideas – both internally and externally. The success of innovation relies on a precise exchange of information before being able to rigorously discuss and test ideas.

    Put your money where your mouth is

    An innovative idea is only useful if it can get off the ground. Directors and organisations as a whole need to be prepared to fund innovation and the right innovative ideas to drive change and increase productivity. Financial backing signals a commitment by the organisation to building innovative culture.

    “If you don’t put your money where your mouth is, it’s just hot air that only reinforces the reasons for lack of trust [in leadership],” Thodey explains.

    Actively pursue opportunities to collaborate

    Leaders must encourage entire workforces to aspire to something greater than themselves, in order to work towards a shared outcome.

    “One of the things we are not good at in Australia is collaborating,” says Thodey. In fact, Australia was recently ranked 23 out of 26 OECD countries for collaboration on innovation. ”When you speak to people individually, there is no problem and the problem appears to be on a wider, sectoral level,” he explains. “There is real opportunity to improve how we approach collaborating in Australia and it begins with governments fostering the right environment for bigger and better innovative aspirations that we can all buy into.”

    Our members share the key take-home messages from the event

    Comments on innovation, collaboration and the role of the board2:04

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