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    Want to learn more about boards and corporate governance?

    Conferences Governance Strategy
    Are you interested in boards, board practice and corporate governance? Do you want to learn about emergent trends and how boards can influence business performance? If so, read on...
    I will be visiting England, Spain and Poland soon to discuss corporate governance topics with directors, boards and academics. The overall trip theme is "Boards and business performance". Four speaking engagements are confirmed and several private meetings are in place.
    While the diary is filling up, there is still room for several more meetings! Please contact me if you have a question or want to set up a meeting. Here is my current schedule:
    June 2
    June 3–5

    June 8 & 9
    June 10
    June 11 & 12
    June 15
    June 16
    June 17–20
    June 20
    Arrive in London, available for meetings after 1pm, including dinner
    International Corporate Governance Network Conference 
    (click to set up meeting at conference)
    Available in London or nearby (Want to meet? Get in touch)
    Travel to Barcelona
    International Governance Workshop, Barcelona (my paper abstract)
    Limited availability in London (Want to meet? Get in touch)
    Travel to Warsaw
    European Academy of Management (my paper abstract)
    Return to New Zealand
    Thanks for your interest!
  • Published on

    It's time to act: Boards need to focus on leadership and strategy

    Governance Performance Strategy
    Governance researchers and some more forward thinking directors have known something for a long while: that boards can add considerable value to business. However, most directors see their role on the board as being one of monitoring and compliance—to keep the chief executive honest and make sure they don't take the company to rack and ruin.
    Calls for boards to put their energy into things that actually matter—leadership and strategy—are becoming commonplace now. Here's one recent example. I have been writing about it for some time as well (see here and here for examples). My doctoral research suggests that boards that are actively involved in strategic management practices (the development of strategy in particular) are more likely to influence business performance than those that embrace the monitor and control mindset. Thankfully, the basic principles of strategy haven't changed much in 30 years, so directors should find it relatively straightforward to come to up speed—but only if they want to.
    Clearly, the drum is beating. How will you respond? 
    If you'd like to understand what an involvement in strategy might mean for your board and business, or you would like some more information, please contact me.
  • Published on

    We talk about value creation, a lot, but what is it?

    Accountability Governance Leadership Performance Strategy
    Much has been written about the notion of value creation in recent times. The phrase is used in commerce, especially by directors, managers, consultants, researchers and facilitators, amongst others. If you listen into board meetings, discussions between managers, sales meetings, product development workshops and planning sessions, questions like "Does XYZ add value?', "How is value created?" and "What is our value proposition?" are likely to be asked. These pop up often, which suggests that value creation is recognised as being something important to be striven for. However (and alarmingly), different people have rather different ideas of what value creation is or might be. Worse still, their ideas are often based on incorrect assumptions!
    We talk about value creation as we would an old friend, yet in many cases we lack a common understanding of what 'it' is! Here's one suggestion, from the Reference for Business:
    Value creation is the primary aim of any business entity. Creating value for customers helps sell products and services, while creating value for shareholders, in the form of increases in stock price, insures the future availability of investment capital to fund operations. From a financial perspective, value is said to be created when a business earns revenue (or a return on capital) that exceeds expenses (or the cost of capital). But some analysts insist on a broader definition of "value creation" that can be considered separate from traditional financial measures. "Traditional methods of assessing organizational performance are no longer adequate in today's economy," according to ValueBasedManagement.net. "Stock price is less and less determined by earnings or asset base. Value creation in today's companies is increasingly represented in the intangible drivers like innovation, people, ideas, and brand."
    This paragraph exposes the nub of the problem. We assume we know what it is. Several simple but incredibly powerful questions need to be asked and answered before business leaders can hope to allocate people and resources effectively in pursuit of business goals:
    • Who is the recipient of the intended value?
    • What is valuable to them?
    • How can this value be created?
    • How will it be measured?
    Rather than make assumptions (think how often have you heard sales people use "unique value proposition"), boards and managers need to seek clear answers to these questions from the beneficiaries of the value that is to be created (because value is determined by the recipient not the creator). Expect to hear several answers to these questions, because 'value' means different things to different people.
    Starting at the 'top' of a company, boards should sit with shareholders and ask (or propose, if the shareholder is unclear) what 'value' looks like to them. Responses might include increased share price, a long-term market position or business model, increased market share or something completely different. This is the 'core purpose' question. Similarly, managers and staff need to sit with customers (or prospective customers) and ask the same question. Staff also need to be asked: their motivations are likely to be different from those of shareholders and customers. 'Great solutions' that 'add value' to customers / staff / shareholders are highly unlikely to do either if customers / staff / shareholders do not recognise, or are not interested in, the value that is supposedly being offered. As with strategy, boards need to take the high ground, by ensuring that value created for one recipient does not erode value elsewhere. Boards need to become crystal clear about value in a holistic sense: what it is, who the recipient is, and how it is created. 
    Once the value matrix (what and to whom) is understood and agreed, the answers need to be communicated in a clear and concise manner, so that effort and expectations can be aligned accordingly. Finally, the board has an ongoing role: to ask probing questions at board meetings, to ensure the required alignment (between purpose, strategy, strategy implementation and value) is actually in place and that the expected value is actually being created and delivered to the intended recipients.
  • Published on

    Boards: ask different questions, and delight in the possible

    Accountability Governance Leadership Management Performance Strategy
    We live in a paradoxical world. Rates of change are increasing, yet we want certainty. Times to market are reducing, yet we still want instant gratification. Zafer Achi and Jennifer Garvey Berger explored these paradoxes recently. They acknowledged that searches for certainty are "only natural", and that managers spend much of their time "managing the probable". However, the world is a social place. People make choices and things change, often unexpectedly. Consequently, the best laid plans can fail completely, leaving managers exposed and potentially out of a job. Achi and Berger suggest that the frame of reference used by most managers, of managing the probable, is a big part of the problem. Rather than managing the probable, they suggest that managers need to "lead the possible". They offered three recommendations to help managers make the change (see article for details):
    • Ask different questions
    • Take multiple perspectives
    • See systems
    These recommendations have the potential to change the way managers think, make decisions and lead. While reading the article, I couldn't help but think that the recommendations also have application in the boardroom. However, the adoption of 'possibility' thinking would up-end board practices in many cases. Boards that spend most of their time monitoring past performance and controlling the activities of the chief executive would probably be quite uncomfortable, even though the recommendations are neither earth-shattering nor inconsistent with the role and responsibility of the board (to maximise performance in accordance with the wishes of shareholders). Maybe its time for directors to take stock.
  • Published on

    Can strategy development and pragmatism be bedfellows?

    Performance Strategy
    With my doctoral thesis now out to review (sent to my supervisors on Monday), I have decided to take a couple of days out to catch up with myself and reflect on the events of the past twelve months. I also need to start thinking about upcoming priorities because, in addition to refining the thesis based on the feedback from my supervisors, my diary contains several teaching, speaking, advisory and facilitation engagements; in New Zealand, the UK and Europe.
    Amongst the engagements are several strategy development workshops, to lead boards and executive teams on a journey of discovery and critical thinking; the goal being a coherent strategy. These workshops are fun: I get to ask some searching questions and to help the participants think about the future prospects of their business. Often, we need to go back to basics, to discuss and agree what strategy is (and is not). Sadly, many managers have a predilection for detail, which means their expectations are of a highly detailed plan (more akin to an annual operating plan). The causality is pragmatism.
    Thankfully, there is no need to forfeit pragmatism. If a holistic framework is used and the debate is focussed on the purpose of the company, business performance, and a set of strategic priorities to achieve the purpose, then the strategy that emerges is likely to be coherent, succinct and workable. Many frameworks and tools are available. The framework that I use is StratCross. It contains the sum of my knowledge and experience gained over fifteen or more years of helping companies create effective, winning strategies. If you'd like to know more, please get in touch.
  • Published on

    Changes at Diligent. I'm confused.

    Accountability Governance Leadership Performance Strategy
    Diligent Board Member Services has just announced the appointment of former McKinsey partner Brian Stafford as chief executive. Stafford takes over from outgoing chief Alex Sodi, "who will become chief product strategy officer and remain on the board". This second part of the announcement caught me by surprise and, quite frankly, confused me.
    I'm not sure I'd want to be in Stafford's shoes just now. The former chief executive is now both his boss (a director) and one of his staff. Consequently, the moral ownership of strategy implementation, and of product strategy in particular, is unclear to say the least. Why the Diligent board chose to structure the company in this way, and why Stafford agreed to the appointment given the challenges of 'above-and-below' reporting is beyond me. I can't see how this sort of anomaly is conducive to a high trust and high performance work environment.
    Perhaps a 'better' approach might have been for Sodi to perform one or other of the two roles (director or strategy office), or to leave the company. If any readers have any insights as to why Diligent made these decisions, or how the new structure might add value to the business, I would love to hear them!