The Catalyst or: How I Learned to Stop Worrying and Love Change

12.08.2014
Published in the Huffington Post USA.

Every company should have an Innovation Catalyst, whose role is to assist the board of directors and the executive board; ask them tough, critical questions; and identify possible solutions. 

With the Catalyst, the future of the company business model will be critically questioned, whether a modern corporate culture and policy needs to be initiated and a vision of a new beginning needs to be made possible.

Investors will also appreciate the work by the Catalyst who presents companies with new ways of doing business, which should further help companies achieve long-term sustainable growth and therefore also increase shareholders' value.

The Catalyst must be creative, innovative, specialised, flexible, and solution-oriented and must bring this subject matter expertise in order to initiate solutions at the highest management level. His track record and expertise must confirm and underline the essential skills. 

The Catalyst must come with broad life experiences as these also increase the chances of non-conventional solutions and ideas. It might be an advantage that he is an industry expert, although it is not essential.

With only a linear life and professional experience, it is difficult to escape from the dilemma of a linear approach to solutions. In other words, a blacksmith tries to solve all problems with hammer and anvil, and a programmer, with codes. Instead, the programmer should maybe also look at a hammer as a possible element of his solution process.

Most companies strive for a high standard of corporate governance. That also means they must continually seek to create value for all stakeholders --- clients, company, employees, and shareholders --- to produce and thus to secure their future.

The quality of corporate governance will be strengthened by the Catalyst through his independence, his role of questioning business models, and his initiation of innovative solutions.

The significant challenges that arise from the intense global competition and ever-changing regulatory framework often go far beyond the traditional areas of responsibility, expertise, and technical knowledge of the board of directors and executive board of a company.

It is precisely here that the Catalyst or the Advisory Board can help the board of directors and executive board meet or exceed the high expectations of their stakeholders with fresh perspectives, expertise, and solutions.

However, we must not confuse the Catalyst or the Advisory Board with traditional consulting companies, such as McKinsey or Bain, because their role is not that of an independent innovation catalyst. The fact that consulting firms are not necessarily the best innovators is also pointed out in Duff McDonald's book, The Firm.

Both approaches - Catalyst and Advisory Board - have their own merits.

The decisive advantages of the Catalyst over the Advisory Board are the strength and efficiency of the decision process (unlike an advisory board, which involves a group of experts) and greater cost efficiency.

In contrast to the classical function of the Advisory Board, the Catalyst not only proposes solutions but also contributes to their implementation.

The Catalyst and the Advisory Board, as part of their task, confront the board of directors and executive board with uncomfortable questions.

The key question must always be: Why should the customer not go across the street to the competition?

For the Catalyst, there are only two simplified orientations of business models: the mass business model, the edge business model, or both.

With the mass business model, the performance or services offered are usually only of good average quality. This can only continue to be justified by economies of scale so that the mass is sufficient for a company to continue making money. It requires much skill and efficiency because everything depends on having a decisive lead over the competition.

The edge business model is characterised by its competitive advantage over the competition. These entities are often still relatively small within the organisational structure and still very entrepreneurial in how they think and act. Here you will more likely find people who continually ask themselves the question: How can we keep at the forefront and even extend our lead?

Innovation in both cases - mass or edge – is needed, but with the edge business model, it is of paramount importance.

Innovation in conjunction with proposals for business realignment can be initiated by one person or a small group. The implementation can then be carried out by an internal or external team.

The Catalyst always strives for a new positioning and adjustment to business models that create new jobs and are more future-oriented.

However, for many companies, the job cuts in the wake of increasing efficiency can be a result of failing to have dared to explore new paths in the past. That is always a less desirable alternative and outcome.

It is a fallacy to believe that innovation and implementation must come from the same source or the same groups. The involved parties should preferably work together to increase the chances of success.

The Catalyst and the implementation team both benefit from each other’s mindset and approach and thereby increase the chances of success.

One and one here makes three.

// The whole is greater than the sum of its parts. //

Aristotles