Transformative innovation and shifting balance: How boards can track stakeholder momentum

The Wright brothers kept their airplane in the air for just 12 seconds.

For the next several decades, the real innovation was not simply making airplanes fly farther or faster. Airports were built. Pilots were trained. Air traffic control emerged. Insurance markets developed. Governments established safety standards. Travelers gradually became comfortable climbing into airplanes.

Today, most of us board a flight without giving any of that a second thought. We are more likely to complain about delayed departures, full overhead bins or stale pretzels than wonder whether the aircraft will remain in the sky.

The innovation became ordinary. But getting there took time.

Time for institutions to develop. Time for standards to emerge. Time for unforeseen consequences and opportunities to reveal themselves. Time for society to discover questions no one knew to ask at the beginning. And time for expectations to settle.

I wonder whether that sequence still exists.

Consider two transformative innovations unfolding right now.

Artificial intelligence is driving enormous investment in data centers and the infrastructure required to support them. But the same infrastructure welcomed for its investment, jobs and contribution to American competitiveness is encountering organized opposition over electricity, water, noise, land use and effects on local communities.

Virginia offers a striking example. A Washington Post-Schar School poll conducted in late March found that only 35% of Virginia voters would be comfortable with a new data center being built in their community, down from 69% when the same question was asked in 2023[1]. In Prince William County, a proposed data-center development near Manassas National Battlefield encountered years of organized opposition and litigation. A Virginia appeals court ultimately invalidated the county’s rezoning approvals on procedural grounds unrelated to the substantive objections to the project.[2] The county then decided not to continue defending the approvals, and the developer subsequently dropped its appeal.

Prediction markets offer a very different example of the same governance problem. Their rapid growth has occurred while a fundamental question remains unsettled: are sports-event contracts federally regulated derivatives, state-regulated gambling, or some combination of the two? Earlier this month, New Jersey asked the U.S. Supreme Court to review an appellate ruling favoring federal jurisdiction over sports-related event contracts offered by prediction markets. Other courts have reached different conclusions.

In both cases, the innovation is developing while society is simultaneously deciding what it thinks about it, and, in some instances, who gets to decide. Historically, many of these developments occurred sequentially. Increasingly, they are occurring simultaneously and influencing one another in real time.

Investment is flowing while products and business models are still evolving. Customers are adopting while policymakers are still debating. Communities are organizing while companies are still building. Courts are hearing cases while legislatures are considering whether new laws are needed. Different countries, and sometimes different states and communities, are reaching different........

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