Leading Innovation - The Third Principle - “Challenge” (cont’d-3)

            Awareness
            Intense Motivation
            Highly Skilled People
            A Supportive Infrastructure

Infrastructure is the framework within which people work.  Infrastructure is the framework that an enterprise establishes to carry out its task of meeting a need in a competitively superior way.  That framework comprises values, human resource polices including compensation and benefits, and governance.  Of these “values” are probably most fundamental.  Human resource policies are a direct derivative of those values and governance is the guiding force that determines how values are translated into day-to-day action.

Human resource policies, compensation and benefits are the subject of much research, expatriation (and consultant income), and have an infinity of variations.  But the root of effective HR policy is based on one value:  a belief in the individual, the concept of individual accountability, individual innovation and a collective concern for individual well-being.  Minnesota Senator Norm Coleman summed this up the other day with these straightforward words:  “We can debate policies and issues, but what counts is what we do for the individuals who are our constituency.”

What about governance?  Governance is an increasingly hot topic in this first decade of the 21st century.  This has been heightened by flagrant examples of corporate malfeasance and fraud.  And to add fuel to the fire, executive compensation seems to be out of control.  This naturally has led to a focus on the oversight aspect of governance to the extent that “governance” has become almost synonymous with “oversight” with preventing corporate misbehavior.

It is important, however, that in all this sound on fury we remember the most basic function of governance and that is to assure the continuing ability of the enterprise to fulfill its role to meet economic need.  Careful monitoring is clearly necessary to assure that those needs are being met in a transparently ethical manner.  However, that is only a necessary governance function.  It is by no means sufficient to the task of assuring long term corporate and/or stockholder success.  Only governance that results in constant and continuing innovation can possibly assure that the enterprise, be it individual, company or nation, meets the challenge of meeting the needs of the people  -  customers or citizens.  And only by doing so does a company continue to earn the right to exist.

It is the governing  body, the company’s board of directors, that sets the policy and allocates resources to that end.  In my book The Eye for Innovation I discuss this at some length. 

I welcome any comments and examples from you, the readers of this note, as to what you think is working well in the governance arena to help assure the innovation health of companies.