Performance - Peter Crow | Helping boards govern with impact

Published on: 31 January 2014

Sadly, some things are just the same...26 years on

We live in a fast-paced world, where the only constant seems to be change itself. Messages of the latest and greatest scheme or product or idea bombard our senses daily, imploring us forward, towards "progress". Yet in some quarters change actually occurs very slowly—at glacial speeds even—despite the best intentions of enthusiastic advocates. The corporate boardroom is one such quarter.

I've been reading Making it Happen, Sir John Harvey-Jones' reflections on leadership. Harvey-Jones, a successful British 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, because they continue to be relevant today, 26 years after they were first written. To illustrate the point, here is a selection of salient comments that Harvey-Jones made about boards in 1988:

Every member of a board shares a co-equal responsibility for the future of the company. Board members are chosen from amongst the most successful executives ... understandable tendency when you first join a board ... for everyone to assume that you will 'pick it up as you go along'.

Boards do not easily set themselves the sort of criteria of success that they would unhesitatingly apply to every other part of the business. Yet unless a board continuously criticises the way it is working ... it is extraordinarily difficult for it to improve its performance.
Many boards are quite unclear as to whether they are merely a coordinating committee, or whether their primary responsibility is to the group as a whole.
It is important not to go in to a meeting without some clarity in your own mind as to what you are expecting to achieve. If you go because the meeting has been called, with little personal aim, one should ask oneself why one is going at all.
Sadly, it is perfectly possible for boards of directors to meet regularly and never discuss any creative business at all. (Harvey-Jones describes this as a "severe abnegation" of both personal and collective responsibility.)

Do any of these points sound familiar? They should do, because they still characterise the behaviours and attributes of many boards in 2014. Why have boards not embraced the same enthusiasm for change and improvement as has been demonstrated elsewhere in the business community? It's high-time boards took stock.

Published on: 23 January 2014

On leadership: there is no silver bullet

The production of silver bullets—panaceas—is a growth industry. New books, all claiming to contain "the" answer, appear in the bookstores almost daily. Sadly, many are far more self-indulgent than helpful to the reader. Yet we lap them up, as we search for ways to be more effective in our professional and personal lives.

I've become a bit jaundiced by the self-help gravy-train of late, however one of the books from my summer reading list has restored my faith somewhat: History Lessons: what business and management can learn from the great leaders of history. Jonathan Gifford, the author, asserts that there is no one model leadership model or kind of leader that can hope to be effective in all situations. Leadership is a complex phenomenon, and different attributes need to come to the fore in different situations. What a breath of fresh air.

Gifford identifies eight skills and abilities that represent many of the essential things that any leader should be able to do and—ideally—be good at. He uses great leaders from history (not all of whom will be well known in the Western world) to illustrate his points.

Changing the mood
Boldness of vision
Doing the planning
Leading from the front
Bringing people with you
Making thing happen
Taking the offensive
Creating opportunities

The book is easy to read. I commend it as a great investment, to aspiring and established leaders. But be warmed: it will make you think about your current leadership situation.

Published on: 21 January 2014

How is a researcher different from a consultant?

Last week, I explored the difference between an advisor and a consultant. The question stimulated a strong response (thank you!), thus this encore. The difference between a researcher and a consultant might seem to be more clear cut. Most of us think of researchers as those boffins that inhabit our learning institutions, whereas consultants are typically suited and found in business environments. Does that make them completely different beasts? Consider this:

A researcher defines problems and tries to solve them. So does a consultant.
A researcher is a knowledge worker. A consultant is as well.
Researchers tend to work alone. Many consultants do as well.

At this level, the roles appear to be very similar, so are the two terms simply two different names for a very similar activity? Possibly, but I don't think so. A key difference between the roles is emphasis. A consultant is most interested in practice, and good consultants use theory to contribute to their work. In contrast, a researcher is most interested in theory (be it testing theories or developing new ones), and good researchers use data from practice to inform their work (testing theories or developing new theory).

The roles are different, but they are closely coupled. Given this, why do so many consultants look down their noses at academic researchers (and vice versa)?

Published on: 18 January 2014

Governance, by looking backward

The NACD's annual missive, of the burning issues likely to light up the corporate governance firmament in 2014, has just been published. The article, which claims to provide a comprehensive assessment of what's on the board director's horizon, makes interesting reading—as much for its omissions as its inclusions. Sadly, the reportedly burning issues, which were "gleaned from interviews with directors and corporate governance leaders", are historical, defensive or operational in nature.

I have no doubt the reported issues are the ones that were on the top of director's minds when they were interviewed. They are important, and need to be dealt with. However, the omission of issues that can make a difference to company performance is very revealing. Boards are responsible for optimising company performance in accordance with the shareholder's wishes. If the published list is any indicator, few boards will spend much time actually looking ahead in 2014 to issues that matter, like strategy, boardroom performance and accountability.

The question that drops out of this discussion is a tough one: Why do shareholders continue to appoint directors and accept boards that spend the bulk of their time looking backward?

Published on: 17 January 2014

Are you an Advisor or a Consultant?

Periodically, I'm asked whether I'm an advisor or a consultant. For many years now, the answer I've provided has been 'advisor', often in an effort to avoid the stigma commonly associated with 'consultant'. (Consultants are the guys that borrow your watch to tell you the time, right?) However, as I've studied the English language more closely in the last couple of years, I've become much more comfortable with the term 'consultant', because it most accurately describes who I am and what I do. Let me explain.

Generally speaking (although perhaps somewhat simplistically):

A consultant is a problem-solver, a simplifier. They are someone you call on to find a way forward, when you have a problem in need of a solution. At their best, consultants provide answers, or at least recommendations. They may or may not actually do the work to implement any solution you choose to pursue.
An advisor is a problem-definer. They are someone you call on as an impartial sounding board, to stimulate your thinking and to test ideas. At their best, advisors help survey the horizon and bring the future into focus. They may well recommend the names of others (consultants!) to help solve a problem once it is more clearly defined.

While my priority as a pracademic is to think broadly about corporate governance and strategy in order to discover possibilities and pursue options, my clients are most interested in solutions to problems they face today – recommendations and answers – which fits nicely with my instinct to understand and solve problems.

Now your turn: Are you an advisor or a consultant?

Published on: 6 January 2014

Gosh, is this a good governance practice?

Several months ago, Tony Marryatt left his job as CEO of Christchurch City Council, following a falling out with Mayor Bob Parker (now Sir Bob) and others. As part his severance deal, it appears that Marryatt agreed to resign also from the board of Civic Assurance (more correctly, of the parent, Local Government Insurance Corporation Limited), the Council's insurer (yes, that sounds like a conflict of interest to me as well).

Marryatt did fufill his commitment to resign from the LGIC board as required. However, he was reappointed immediately. Wow, this sounds like a highly unusual decision process, to say the least. Some serious questions need to be asked. Two that spring to mind are:

Why did Marryatt allow his name to be considered for reappointment, when many questions hung over his reputation and recent performance? (Marryatt's unhappy departure from the CEO role was not his first.)
Why did the LGIC appointment panel even consider Marryatt as a candidate, let alone immediately re-appoint him?

The matter raises many more questions as well, mostly about the quality of governance practice and decision-making at LGIC. LGIC is owned by several local councils, a sector that has endured a few failures of governance in recent times. Transparency and accountability are crucial if the confidence of the public is to be maintained. Hopefully the LGIC board will put its collective ego (and political motivations?) to one side and commission an independent evaluation, of its appointment process and its overall performance.

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