Recently, during a meeting with a company director, I was asked if I'd be interested in seeing the company’s production facilities, to provide context for an upcoming assignment. Context is everything, so I gladly accepted the offer. As we walked, we chatted about a wide range of things. At one point, I asked how things were going since the board's decision to embrace a strategy to become a higher-performing business. His response was as telling as it was succinct: They say ‘high performance’, but all I see is ‘average’. The melancholic admission was unexpected, but not surprising. Apparently, the most recent board report showed that staff turnover had been creeping up, and engagement scores were trending downwards. And yet the atmosphere in the boardroom was sanguine when I visited. Clearly, something was amiss. This vignette highlights one of the great challenges in business—strategy execution; ensuring that strategy planned becomes strategy executed. Regardless of the motivation for creating them, intentions and strategies are not worth the paper they are written on if desired outcomes are not achieved. When things go wrong, the problem can often be traced back to one or both of two things: lack of will (the "won't" barrier), and lack of know-how (the "can't" barrier). Both are indicators of a failure of leadership; a failure to equip staff, and motivate and engage them to embrace the call to action. But the root cause may lie elsewhere. If strategy implementation is OK but expected outcomes do not follow, the problem is more likely to be one of governance. This is because ultimate responsibility for organisational performance [outcomes] stops in the boardroom, not the executive suite. Some may challenge this, on the basis that the executive is responsible for running the business and implementing the strategy. They are, but for the avoidance of doubt, responsibility of determining purpose, setting overall strategy and ensuring results are achieved lies with the board of directors. There’s no getting away from it: the buck stops at the top. If there is a gap between what the board says it wants, and what is subsequently observed as reality, the likelihood of great outcomes is low. The ‘saying–seeing’ gap must be bridged, and the board needs to own this. Here are some questions the board may wish to consider:
So, to the direct question: Is your board across this?
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Did you know that every living creature on Earth has approximately two billion heartbeats to spend over its lifetime (yes, 2,000,000,000)? I never knew that until I read this article recently. Brian Doyle writes so well. He brings science to life. Of heartbeats, he writes: "You can spend them slowly, like a tortoise and live to be two hundred years old, or you can spend them fast, like a hummingbird, and live to be two years old". This article set me thinking. How I should spend the rest of my two billion heartbeats? Part of my answer is to continue to help boards govern well. Another is to nurture important relationships. As a leader, how will you spend the rest of your heartbeats? And what impact do you hope to have?
We live in a fast-paced world, where the only constant seems to be change itself. Nine months ago, messages promoting the latest and greatest scheme (or product or idea) bombarded our senses daily, imploring us to embrace something better. Hope prevailed. Now, with the outbreak and impact of coronavirus, the situation is quite different. Despite the ebbing and flowing of seasons and circumstances, even the onset of crises, some things remain remarkably constant; stable despite great turbulence and the best intentions of enthusiastic advocates to move things along. The corporate boardroom is one such example. Earlier this year, during the early days of the coronavirus, I re-read Making it Happen, Sir John Harvey-Jones' reflections on leadership. Harvey-Jones, a successful businessman and industrialist, was perhaps best known for leadership of British firm ICI, culminating in his chairmanship from 1982 to 1987. His insights are timeless; arguably still relevant today, 32 years after they were first written. To illustrate the point, here is a selection of salient comments Harvey-Jones made about boards in 1988:
Do any of these points sound familiar? They probably do, because, sadly, many of Harvey-Jones' observations are still prevalent today. Given the duties of directors, why are some boards still reluctant to embrace change when circumstances change, or a crisis strikes? Is it time your board took stock, not only of the company's strategy and business model, but of itself?
As a devotee of life-long learning and a student of history, I keep an eye out for ideas and examples to share with boards and directors—in the hope that some might prove useful to help boards lead more effectively, from the boardroom. Amongst the news feeds and magazines that cross my desk (actually, computer screen), this journal often contains thought provoking articles. Recently, I was looking through some older issues and stumbled across this item, which explores effective leadership. The author offers seven 'keys' to effective leadership, as follows (I've taken the liberty of attaching a comment to each—a consideration for boards and directors):
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I returned today from two overnight trips (both were to attend board meetings, meet shareholders and discuss various company matters with management). It was great to get out and about again—to sit together around a board table, meet staff and see the businesses operating following the constraints imposed by the Covid-19 lockdown. While I was away, a Netherlands-based colleague sent a note saying she'd just started reading through Musings, from the beginning. Why someone would go back and read all of my writings since March 2012 is beyond me, but she has chosen to do so. She said that while many writings resonated, one piece in particular stood out as being as relevant today as when it was first written, in 2012. Amongst other things waiting for my attention [having arrived overnight] was this article, originally posted by Tony Schwartz on the HBR Blog Network. The article set me thinking. Why are we, in this so-called modern age of productivity, so busy trying to fit so much in to our lives? We use electronic diaries to keep track and save time, but they've come to rule our lives. We seem to be constantly running; going faster, but getting nowhere. Chantal's comment, and my subsequent re-reading of this piece, set me thinking once again about the impact of speed and busyness on decision quality. How can any director make effective contributions in the boardroom if they are so busy, or moving so quickly, that they do not have time to consider the wider context? The prospect of an electronically-enabled world sounds enticing to many. But is it built on a solid foundation? Are board decisions any better than before? Directors owe a duty of care to ensure the enduring success of the company governed. For that, they need to create space to think deeply and critically about longer-term options. They ignore this maxim at their peril.
Earlier this week, I had the privilege of framing a discussion on board decision-making with a group of board directors and Digoshen Impact Partners. (Digoshen is a global learning platform to empower experienced and aspiring directors.) The following comments summarise the key points mentioned during this week's session. At the core, the board of director's main job is to ensure the performance of the enterprise it governs. For that, the board needs to consider information, ask questions and make decisions, strategic decisions. This sounds straightforward. But many boards struggle; and more so in a highly-dynamic environment. For example: Given these research findings, it's little wonder effectiveness is low. The seemingly unending trail of missteps and company failures tells a sorry story. But boards have options; they hold the ultimate decision-making power and, therefore, are by no means powerless. Boards intent on achieving high levels of decision effectiveness may wish to embrace the following suggestions (discussed during the session):
One final point. Boards are social groups that operate within a stratified social setting, the company and more broadly the wider marketplace. Thus, the actions and outcomes that follow are contingent on many external factors. Things can (and do) change quickly. Therefore, boards need to keep their eyes open, to ensure they have contextually relevant information to hand to make an informed decision; and to remain diligent after the decision, to ensure the expected benefits of the decision are in fact realised. This musing is based on a session summary I co-authored (original posted on the Digoshen website).
Last week, Scott Arrol, CEO of NZHIT (New Zealand's peak body for those involved the digital health sector), got in touch to ask a few questions about the contribution of boards during times of crisis—a topical subject! The primary challenge for boards in such times is working out how to respond. The playbook that may have served well in the past is, probably, of little use now that the operating context has been flipped on its head. Despite this, the board remains responsible for business performance, so respond it must. During our conversation (which was recorded, see below), we touched on the following points:
If you'd like to explore any of these or related points further, please get in touch. The unexpected outbreak and spread of Covid-19 has had a seismic effect on the lives and well being of people, around the world. Politicians and government officials have activated crisis response plans (some more quickly and effectively than others) and business leaders have reached for their continuity plans. Amongst the turbulence, little if anything is clear—except that SARS-CoV-2 has our attention. Horizons have shortened, and most if not all resources have been diverted to deal with the situation. This is reasonable, but it also exposes the company to a significant risk. Business leaders (especially boards) need to keep one eye on the future, because the crisis will eventually pass. When it does, companies need to be ready to 'go' in the post-crisis environment, lest they be outgunned by others. The most pressing questions for boards as they look to the future relate to the wider operating context, the answers of which inform strategic choices.
As boards work through these and other related questions, careful judgement (wisdom and maturity) is needed, to both balance competing interests (resourcing the crisis versus strategising the future) and to avoid traps that have the potential to stymie the company's recovery. Here are three pitfalls that can entrap boards:
The temptations to look just ahead; embrace detail; mitigate all risks; confuse strategy and tactics; conflate the roles of governance and management; and be highly optimistic are very real—more than many would care to admit. But they are by no means insurmountable. Boards intent on ensuring the company is well-positioned to emerge from a crisis intact know that high quality steerage and guidance is vital: a clear sense of purpose (reason for being), a coherent and appropriately resourced strategy that is relevant to the circumstances, a dedicated team and effective oversight. They also know that this principle holds regardless of the company's size, sector or span of operations. A much brighter future awaits those companies that do not lose sight of the bigger picture as they work through the mire towards solid ground.
To suggest that the COVID-19 pandemic is the news story of the year is, as they say, a bit of an understatement. And it is easy to understand why. The personal, community and economic impact has been dramatic. Many thousands of people have died; untold millions have lost their jobs or soon will; community life has been put on hold; and economic activity has, largely, ground to a halt. As of today (14 April), nearly 2,000,000 people are known to have been infected by the SARS-CoV-2 virus. The actual number is unknown, but it will be far greater, without doubt. About 120,000 deaths have been linked to the virus as well—although most were due to co-morbidities. Only a small portion of the reported fatalities were directly due to COVID-19 (data from Italy suggests 12 per cent). Understandably, most of the reportage has concentrated on the headline numbers, decisions by politicians, and the public health response. But personal stories have featured too. As you would expect, partisan biases are also on display: Trump has been slammed and Ardern lauded. Despite the seemingly strong alignment apparent across the reportage, the picture being painted is far from complete (the situation is still developing, after all), and it may not be accurate either. Underlying data may be misunderstood, misinterpreted or missing. Yet decisions need to be made, and decisions have consequences, just as sticks have two ends. The challenge for politicians is no different from that boards of directors face all the time. The best and most effective boards are those who seek counsel from a diverse range of perspectives (including competing options) before they make a decision. This article, positioned prominently on the front page of the Dominion Post today, highlights the emerging situation in New Zealand and the challenge for political decision-makers. It is well worth reading, as much for the language used as the story itself. The first sentence in the print edition read, "A group of public health experts has broken ranks on the Government's lockdown strategy ...". (The online edition was subsequently edited, at 8.28am, to read, "A group of public health experts has challenged the Government's public health strategy ...".) The cited experts argue that, with the border secure, various restrictions in place can (should) be relaxed, to enable people to return to a level of normalcy. This view is at odds with the advice the government seems to be relying on, but it remains valid as an option nonetheless and, therefore, merits consideration. Whether the government decides to balance the best interests of the economy and society, or to hold tightly to the current course, should become clear soon. Regardless, its decisions will have consequences, just as every stick has two ends. Politicians, as boards of directors, ignore this truism at their peril.
The rapid spread of the COVID-19 virus has shaken communities and commercial activity around the world, to the very core. Since late February, strict restrictions on human movement both between countries and, now, within communities have been imposed, in the hope of containing the virus and, in one case, of eradicating it. The scale of the impact on lives, social structures and economic activity has yet to be measured, but it will be large, I suspect. The scars will remain tender for some time in many cases. Unsurprisingly, many people have been inventive in response to the situation they now find themselves in. Neighbours are meeting at a distance, and internet traffic has grown exponentially as people have taken up online entertainment options and relied heavily on social media to keep in touch with each other. All of this is to be expected; humans are social beings, after all. The vacuum left from the pausing of economic activity has been filled by creative thinkers and opportunists offering all manner of webinars, 'best practice' check lists and other forms of guidance to help individuals, groups and businesses reconfigure their lives and businesses. The Internet is now awash with them. Some are well-informed and helpful, but most of the ones I've seen are little more than attention-seeking noise. My own work patterns have changed too, mainly as a result of the restrictions on movement now in place. These include using electronic communications tools such as video conferencing in place of in-person board, coaching and other client meetings; and the telephone and email to keep in touch with colleagues and clients. The following points summarise my experiences as I have sought to govern at distance this past month:
One final point. These are my experiences. Some may be familiar, others less so. Regardless, if you have any questions or comments, please get in touch. If you are prepared to add your experiences, as similar or different as they may be, I'd be delighted to hear them and am sure others would be too. Please leave a reply below.
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