How's your roadworthiness?

Directors who scale up their knowledge of strategy and disruptive innovation can better support leadership teams, says outgoing NRMA chair Kyle Loades FAICD.

The NRMA, Australia’s oldest and largest member-owned, mutual motoring-services organisation, has 2.6 million members and a history stretching back 97 years.

Chair Kyle Loades looked to the future and realised that NRMA’s private-ownership roadside service membership model was under threat by self-driving vehicles and the rise of car sharing.

In 2016, the board hired Rohan Lund (formerly with Foxtel and Seven West Media), a CEO strong on digital technology, strategy and innovation. His new leadership team is executing a rapid, company-wide transformation strategy.

Meanwhile, Loades decided he needed to skill up. He recently took a Harvard Business School HBX online course (US$1500) in disruptive strategy with innovation expert Clayton Christensen.

Implications of the rapid rate of change

Loades argues that the rapid pace of change requires boards to quickly come to grips with new developments. “The Disruptive Strategy course ran through some commonsense things that are best practice, like how to identify different types of innovation and disruption, and predict when it’s going to happen in your industry. Rather than become a victim of disruption, you learn to predict it, to get on the front foot.”

Using digital disruption business models, the course also focused on what causes consumers to buy products and why — then identified “pain points” for customers.

“Legacy business have built successful products without visiting how we can do more to make people continue to buy from us,” says Loades. “If you’re asking those questions every year, you should be making changes every year. You need to break down the whole service delivery process — and what the pain points are, where service delivery falls down — and create a service delivery path around that knowledge. That’s what the tech titans have done to achieve continuous growth. Legacy businesses must do that to keep up.”

Loades finishes his NRMA term in December after 12 years on the board, including four as chair. But, for him, the learning doesn’t stop. Next is a 12-month course at the Australian National University; the Transformational Leadership Program is designed to help leaders of large organisations with legacy systems, processes and organisational cultures adapt to a volatile and rapidly changing macro-economic environment and technological disruption.

“The focus on disruption is often on startups and new companies, when the biggest challenge is transforming legacy organisations that have to move from old to new organisational approaches,” he says.

"There’s an Amazon equivalent coming for everyone. The more you can prepare your organisation to be more agile, to lower its cost base, to transform and incorporate brand values, the better.

NRMA, meanwhile, has rapidly reduced its cost base and invested in startups such as Divvy share parking. It has also put $10 million into an electric vehicle fast-charging network that’s free for members.