Boardroom culture can help – or hinder – Australian businesses at a time when they need to be highly adaptable, says John Pollaers, chairman of the Australian Advanced Manufacturing Council (AAMC).
Speaking at a conference at the Melbourne Business School on July 10, Mr Pollaers spoke of the need for business to ensure the right talent is in place – including at board level – and for science and digital understanding to be made a priority.
He said Australia, which had devised world first technology such as the bionic ear, the ‘black box’ flight recorder, WiFi internet and the technology behind Google Maps, had a great reputation for innovation.
But despite this, and many other stories of transformational success in business he said there was “also strong evidence that our corporate culture is inclined to be risk-averse”.
“Our Boards have tended to focus on compliance and on efficiency gains – at the expense of new ideas. This means there is less focus on growth – in particular less focus on “intelligent growth” – and by this I mean growth through innovation,” he said.
He said the Watermark Search International 2015 Board Diversity Index, which looked at the members of ASX 200 boards, found that only three per cent of Australian board directors had technology experience. And only 19.4 per cent had industry experience.
A variety of research had shown that having a balance of skills and expertise on a board, and in senior management, was fundamental to innovation success, Mr Pollaers said in his speech.
“And yet, we know that the composition of most Australian boards is relatively homogenous,” he said.
More and more of our leaders need to come from Science, Technology, Engineering and Mathematics (STEM) disciplines, he said.
Mr Pollaers told the audience that as new technologies such as advanced robotics, 3D printing and the ‘internet of things’ gave businesses an exciting glimpse into the future, companies needed to ensure they could adapt rapidly to changing circumstances.
To do this, they needed to create an environment where strategy is openly discussed and input encouraged broadly from across organisations, he said.
Businesses could not afford the luxury of fear, or the luxury of sitting within their comfort zones, and should instead be strategising to “out-innovate the innovators”.
“Agile companies realize they will become irrelevant if they do not look for new sources of growth outside their current core.
To view the full speech, click here.