Recently, some colleagues and I worked on a board risk oversight project that resulted in interviews with numerous corporate board members about their perspective on the board’s role in enterprise risk management (ERM). During that project, one board member suggested that my next risk research project should be called “good, great, going, gone!” —a risk project about companies that thought they were doing well but somehow ended up failing. He was motivated because he served on a board of a company that went bankrupt and wondered, after the idea of ERM came along, could the company have been saved? Could management and the board have seen the risks coming? Could they have seen them sooner or understood them better?
The interface between business and government sets the foundation for our nation’s wider economy. It is a vital nexus in these tough economic times and one that is in dire need of innovative approaches.
How government works with business, and vice versa, in addressing urgent problems has wide ranging impacts on our nation domestically and internationally. Yet, when societal issues arise where business is perceived as a factor in a particular problem or threat, the default reaction by government can too often be unilateral action to limit or constrain business activity. Legislators and regulators arguably believe that they are advancing the greater good. However, the result can be governmental policy with limited effectiveness in addressing the targeted problem, and often negative and unintended consequences for the business community and society as a whole.
There is a small framed black and white photograph hanging in IBM’s Israel headquarters, an impressive complex of modern buildings in the Tel Aviv suburb of Petach Tikvah, which shows a group of half-a-dozen bespectacled, smiling young men and women standing arm-in-arm. This was IBM’s Israel tea
Hardly a day passes by without a headline related to infrastructure—from the interest in “smart cities,” to calls for increased investment, to a focus on economic prosperity and competitiveness, to ongoing recovery efforts following major disasters.
President Obama was right to highlight the role that innovation plays in strong economies. Innovation and business success are closely linked. Established companies that do not innovate will lose market share to competitors that do. High-growth start-ups are built upon innovations that they want to force into the marketplace.
Yet, while everyone says they want more innovation, words are easy. The tough, practical questions remain: How do we get more innovation and how do we harness it? That is the challenge we face.
Let’s consider the broader ecosystem for innovation.
We all have moments that catch us by surprise. Mine came recently as I stepped off the plane in a place known as the “Magic City.” I’ve been fortunate to visit a lot of places in my life, but few struck me the same way as Minot, North Dakota.