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Syntrina Leadership co-founder calls on board members to befriend entrepreneurs and learn from them
This article is part of the series, the Salzburg Questions for Corporate Governance by the Salzburg Global Corporate Governance Forum
Disruptive risks usually stem from non-obvious places and sources. The term for the types of people typically working at the forefront of discovering these kinds of opportunities is “entrepreneur.” Entrepreneurs are usually at the forefront of innovation, whether they are intrapreneurs within a company or people independently building their own ventures. While their observations may lead to successful new ventures, they can also represent highly disruptive risks to existing businesses. A board’s role in innovation is firstly to move behind the curtain and understand where these large disruptive ideas come from. That means spending more time around entrepreneurs, not reading about them, but spending in-person physical time with them (or via video during this time of social distancing, of course).
Entrepreneurs are odd people. They are seen differently around the world. In some regions, they are seen as non-conformists and against tradition. In others, they are considered creative and inspiring. Regardless of the stereotype applied, directors must learn to identify and gravitate towards them, for the source of future disruptive risks lies within them. The most important thing to know is entrepreneurs are deeply human and emotional. As driven as they are in their ventures, they are generally highly in touch with themselves and care strongly about many things outside their work. It is this principled passion that directors must tap into in getting to know them. Finding out about one’s hobbies, likes and dislikes, families, and pastimes may seem an unproductive way to spend precious time between a board member and a successful entrepreneur, but it is, in fact, the most important. By spending time physically with entrepreneurs, directors become increasingly aware of the newest approaches to problems being worked on without any influence from media, third-party accounts, and other intermediaries, which many times can naturally shield underlying coming risks.
A board member who establishes strong humanistic relationships with entrepreneurs gains deeper insights and a richer glimpse into future disruptive risks.
In the midst of the coronavirus pandemic, a Pennsylvania distillery owner in the United States became passionate around the soaring prices of hand sanitizer and wanted to do better, even though his primary business was distilling liquor. He’s temporarily converting his operation into a production line for the scarce alcohol-based disinfectant using the public WHO recipe. In this case the founder, Chad Butters of Eight Oaks Farm Distillery, connected the dots between what he saw on the news and what his own existing venture was capable of. While he is solving an immediate societal health problem today, his innovative work may morph into a new business for him that could disrupt a new market.
Some board members find it useful to have their own personnel or committee comprised of external entrepreneurs who can serve as a personal sounding board. This approach is not only for directly helping to spot disruptive risks but also to clarify and support processes around innovation, which can strengthen the organization’s overall ability to identify disruptive risks in the future. These teams can also serve as “red teams” who work to poke holes, find vulnerabilities, and identify risks to proposed directions the board is considering.
A board member with an entrepreneurial mindset coupled with a team of opportunistic dot-connectors can be a powerful force in evaluating and managing future disruptive risks.
Innovation is a holistic concept bringing together the brilliance of the employee base, the oversight and steering of the executive team, and the broader perspective and insight of the board. It’s easy to label “innovation” as the responsibility of the product team or research arm of the company, but that is a fatal mistake. Innovation is maintaining a state of entrepreneurial prowess while out in the world and ensuring the company never rests on its laurels of past success.
In a rapidly changing world where global supply chains that have been successful for so many years can suddenly become ineffective, every stakeholder - from employees to partners to management to directors - must be postured in an entrepreneurial stance. We take that stance by getting to know entrepreneurs, establishing genuine trust, and sharing world views, hopes and dreams, feelings, and fears. Directors and entrepreneurs often come from seemingly opposite vantage points, but together can make for the most valuable assets a company can have in turning disruptive risks into immensely successful futures for the companies they serve.
A board member that recognizes the seemingly minute initially, but oftentimes enormously disruptive insights that entrepreneurs possess, can derive unique glimpses into the future and just may add a few personal experts in identifying risks to their set of good friends and close relationships.
As a director, how many entrepreneurs do you know on a human level? How many of their dreams and fears are shared with you? How many entrepreneurial inputs do you spend real time listening to as you evaluate and foresee disruptive risk? Do you have a personal team of entrepreneurs who can inspire and provide insights to you?
Christopher Beltran is a successful serial entrepreneur in financial services collaboration software, board governance software, and digital community building. He serves as a technical and strategic advisor for a variety of startups, including the Fortune 500 in the U.S., and internationally-based public global companies, and is co-founder of Syntrina Leadership whose purpose is to bring world class coaching talent to leaders. He started his first software company serving financial institutions out of his dorm room in college, which he grew profitably to serve over seven countries and eventually exited successfully. His interests include online communities, data privacy, law & ethics, governance, digital identity, blockchain, artificial intelligence. Christopher is an inaugural member of the Silicon Valley Blockchain Society (which represents over $1.2 trillion in assets). Among others, he serves on the advisory board of CU Ledger, the first Sovrin network digital identity platform for over 300 million people in the credit union space. Christopher is an accomplished public speaker while privately mentors and helps entrepreneurs; He was a mentor for kids at the MIT/Harvard Summer Launch Program and has taught graduate-level entrepreneurship at Purdue University. He obtained his bachelor's degree in industrial management and management information systems from Purdue University. Christopher is a Fellow of Salzburg Global Seminar.
The Salzburg Questions for Corporate Governance is an online discussion series introduced and led by Fellows of the Salzburg Global Corporate Governance Forum. The articles and comments represent opinions of the authors and commenters, and do not necessarily represent the views of their corporations or institutions, nor of Salzburg Global Seminar. Readers are welcome to address any questions about this series to Forum Director, Charles E. Ehrlich: cehrlich@salzburgglobal.org. To receive a notification of when the next article is published, follow Salzburg Global Seminar on LinkedIn or sign up for email notifications here: www.salzburgglobal.org/go/corpgov/newsletter