Meta boards and collaboration

Recently Prof Drew Dawson, a non executive director of various organisations and the director of multi-disciplinary collaborative research centre at the University of South Australia and I had dinner. 

In our dialogue we explored the concept of Meta boards. 

Below is a transcript of the conversation:

Lindley Edwards (LE):  We are experiencing a lot of disruption in the general business environment as forces of change surround us. The changes encompass factors which include factors that are financial, environmental, technological and social. Many of the organisations we are part of will need to adapt and change. Such adaptation will require us to challenge and changing our thinking, interrogate our assumptions and demonstrate a preparedness to innovate and modify our business and organising models. 
 
Drew Dawson (DD): I agree. To survive the changes we have been talking about, organisations will increasingly rely on collaborative, multi-disciplinary and networked approaches to problem solving, innovation and commercialisation. 
 
LE : What we are talking about here is a greater emphasis on the ability to bring together ad-hoc specialist teams able to band and disband, according to the need and requirement of the situation.  I regularly notice the positive impact of ‘fresh eyes’ and new thinking on boards and executive teams, particularly when business operations need to be reviewed and new strategies are to be set. No matter how hard we try, over time we can become caught up in obsolete mental models that don’t allow for fresh insights. What you are suggesting is that organisations, should consider ‘meta’ boards.

DD: Yes,  I believe organisational governance structures will need to reflect and reinforce this mode of operation. For many organisations, current governance structures often lack the diversity, currency and skill sets necessary to exploit the commercial advantages that can flow from a more networked approach to business. In particular, the idea of board members who serve long-terms and bring narrow forms of technical expertise to the organisation may reflect a more traditional notion of the ‘firm’ and ‘value chain’.

In the next few years it is likely that many organisations will need to develop a more flexible notion of the firm and governance.  We will need an operating metaphor with more permeable boundaries and the capacity to federate and collaborate instinctually across a range of value chains.  Such organisations may well require a parallel or congruent governance structure that can attract people with a more diverse skill set, for shorter periods of time and with a stronger emphasis on their capacity to develop and nurture the collaborative networks within which particular organisations can flourish.

Over time we will likely see a shift in the metaphors we use to describe our understanding of the business environments. I think we are increasingly likely to see a value chain as an ‘ecosystem’ in which many corporate organisms are required to collaborate in mutually beneficial ways without ‘devouring’ each other in the way standard M&A logics have been applied in the past.
 
LE: Such ideas are in opposition to the training that most business school graduates have received.  Most of us were trained in Porter’s Five Forces Model, which looks as all forces outside of the organisation as a competitive threat.  This includes being very wary of the powers of buyers and suppliers as much as actual competitors and potential market entrants. What you are recommending is that we start to think more intelligently about co-operation and collaboration and to do this we need skilled thinking and talents beyond what may have been a traditional approach.
 
DD: Yes, in contrast to Porter, the external environment can be both a threat and an opportunity simultaneously. This line of thought leads to a number of interesting possibilities. In the past, horizontal and vertical integration/aggregation of the business have enabled organisations to better integrate value chains.  

Unfortunately, this approach can be compromised by the inevitable diseconomies of scale that can accompany aggregation. The challenge in the next decade will be to develop the organisational architecture and governance structures that facilitate collaboration and cooperation while retaining the capacity to dissolve and reform value chains rapidly and flexibly in response to emerging opportunities. This will particularly critical for the SME sector in modern industrialised countries where organisational growth and aggregation is no longer the default business model.
 
LE: Interesting comment about the increasing need for collaborative approaches. I can already see that trend already evolving. Large corporates and governments often want integrated solutions from suppliers. Traditionally large corporates have sourced integrated solutions from other large organisations, and if SMEs want a share of this part of the market they need strong collaboration abilities and structures that support such activities.   

DD: One of the ways to address such issues is to consider whether a specific value chain could develop a pool of people from which individual organisations within the value chain could draw board members who could work on a more ad-hoc basis across the value chain. In effect a consultant directorship pool or ‘meta-board’ that provides oversight across the value chain. There is no doubt that ad-hoc and informal networks of this type have existed for many years. They are not, however, formally acknowledged or integrated into the explicit governance structures of organizations and often sit uncomfortably in a regulatory grey zone.

Nevertheless, a more formal approach using a meta-board could add significantly to a value chain and help coordinate strategic behavior across a group of organisations within the ‘ecosystem’.  The challenge will be how best to develop a mechanism that formally acknowledges the importance of collaborative networks in developing value chains across increasingly permeable organizational boundaries.  How might we develop ‘meta-governance’ structures or  ‘meta-boards’ that provide the insight and oversight across multi-organizational value chains.

In practice, financial and intellectual capital providers (banks and universities) might provide a useful starting point to developing the idea of meta-boards.  In many cases, these groups have the capacity to identify the potential value chains and the networks to facilitate collaboration.  They are often are used to operating in this mode already albeit informally.  In many cases they have the strongest self-interest in creating the value chain.

LE: Our conversation illustrates the value of discourse beyond the traditional boundaries of  professional disciplines and narrow sector interaction.  It leads me to postulate about what would happen if more business people and sociologists got together. As David Hume the Philosopher once noted:  ‘Truth springs from arguments amongst good friends.’
 
Prof Drew Dawson is the director of a multi-disciplinary research group based at the University of South Australia.  He has a long-term interest in the creation, development and maintenance of collaborative networks that bring together researchers, industry and government in ways that promote innovation and improved productivity. He has a passion for empowering people through creative dissent and a commitment to disrupting complacency.

Lindley Edwards is the group managing director of AFG Venture Group and its various subsidiaries. The Group undertakes corporate advisory work which involves merger, acquisition, divestments, strategic consulting, fund raising and licensing for its client base of public and private companies based in Australia and in Asia. Lindley also is a non executive director of Asialink, Asia Society and University of Western Sydney Foundation, is a trustee of the Centennial Park and Moore Park Trusts and is a committee member of the Co-operative Research Centre Program.