Governing Over Disruption and Innovation

Dr. Peter Diamandis joined the Board Leadership Forum for the inaugural session to help participants understand the environment in which they are serving their companies. Fundamental to this understanding are several critical points:

• Historically, change has been linear and we are conditioned as humans to think that way.

• Now, change is exponential. Understanding, let alone anticipating, exponential change takes a deliberate effort on our part.

• This shift to exponential growth is paralleled by a shift from a scarcity model

• In order to succeed in this new environment, boards have to rethink their role as overseers to advise effectively on the companies short and long-term strategies, and the related products and services the company provides.

To demonstrate his points, Peter shared several recent examples from the business world of corporations that failed to address the changing environment in which they were operating.

Peter then highlighted six fields that are innovating rapidly and present both opportunity and threats to every industry.

Artificial intelligence

• Perhaps the most significant disruptor, artificial intelligence is closer than we realize.

• Artificial intelligence will fundamentally change the way our companies interact with customers, clients, vendors, suppliers and other stakeholders.

Sensors and Networks

• Already ubiquitous, sensors and networks will produce data at a volume unknown in human history.

• This data creates the potential for insights in to every aspect of our businesses and human life.

Transportation (robots, autonomous cars, drones)

• Automation and the sharing economy will fundamentally change not only the transportation industry, but others interlocked to this industry

• This may be one of the first industry verticals to be completely disrupted and it is happening faster than many realize.

Energy

• The shift from fossil fuel to renewable energy is happening quicker and quicker as new technology comes to market, costs come down, and reliability is addressed.

3-D Printing

• 3-D printing will transform manufacturing through speed and decreased barriers to entry.

Augmented Reality/Virtual Reality (AR/VR)

• Along with artificial intelligence, AR/VR is fundamentally changing the way companies and consumers will interact.

The Role of the Board Chair:

Peter closed by highlighting a few critical questions for board chairs to think through with their board and management teams:

1. What business are you truly in and what is your company’s “massively transformative purpose?”

2. What are the exponential growth curves in our industry/business and are you ready to take advantage of them? How will the six fields impact your business?

3. Ask both what will change in the next 10 years, but also what is not going to change in the next 10 years?

4. As a part of your board’s ongoing strategy reviews, are you revisiting investments with an eye to the exponential changes occurring around your business?

5. With respect to culture, are you creating an environment where failure is vied as continuous learning and therefore, celebrated?

6. What gaps do you have on your board to understand this new environment? How does this impact board composition?

Peter’s slides are available for download here and the meeting summary is available for download here.