Decision making to promote innovation and growth

A high-performing board will develop decision-making processes that promote innovation and growth and improve the resilience of the organisation.

Decision-making for growth, Dr Robert Kay at the Company Directors Conference 2014
Australian institute of Company Directors (video), May 2014

A high-performing board will develop decision-making processes that promote innovation and growth and improve the resilience of the organisation.

In this video, Dr Robert Kay discusses the nature of decision-making in organisations. He observes that board decisions reflect societal-level paradigms, organisational level processes and tensions, and group and individual decision-making processes.

Dr Kay discusses two conflicting processes at the organisational level – exploration (or “explore”) and exploitation (or “exploit”). “Exploit” is about creating efficiencies, stability and certainty. On the other hand, “explore” is adhoc, higher risk and uncertain, but enables an organisation to innovate and take advantage of new opportunities. Dr Kay observes that “exploit” is focused on today while “explore” is focused on tomorrow.

Processes of “exploit and “explore”

The processes of “exploit and “explore” need to be balanced if an organisation is to be resilient in the long-term. Dr Kay believes that there is not enough exploration in most modern organisations.

Boards seeking to improve their performance may find it useful to undertake a formal evaluation process focusing on the nature of board deliberations and decision-making.