Reflections 3 years on

March 2020 Looking back at my diary, the month started with a busy week facilitating a number of different workshops for Boards of Directors and Governance Professionals in London. On Friday 6 March I replanned all my Q2 scheduled activity for virtual delivery. Looking back, it is difficult to identify the single trigger which prompted me to replan. Based on my experience as a founder member of The Henley Future Work Forum (FWF) back in the 1980s, and my subsequent collaboration with Dr Laurence Lyons, the FWF co-founder and Research Director, the technological and behavioural transition was smooth. I am fortunate to have a valued support network and trusted client relationships.

Adversity Much of my time over the last three years has been spent supporting business leaders as they navigate adversity. The privileged position of being invited to talk with leaders across multiple sectors and territories, highlights two truths:

– Adversity corrodes inspirational leadership

– Adversity reinforces inspirational leadership

Identifying angels and devils has pre-occupied business authors for decades. The corrosive damage which toxic behaviour can wreak on any organisation is universally recognised. Perhaps it is surprising that multiple recent examples exist of visible devilry being tolerated and condoned. The behaviour can be viral and damages people.

Conversely, spirits lift with examples of inspiring leadership practiced passionately and altruistically. This celebration of angels is also viral and draws together communities of loyal followers, eager to share and collaborate.  

Leaders Our decisions and behaviour are scrutinised to determine whether we are devils or angels, or perhaps a bit of both. Taking time to consider the impact we have on others is essential, but as a solitary activity we can be selective in what we choose to see and believe. It takes curiosity and also bravery to develop self-awareness of the real impact of our behaviour and how people perceive us.

Relationships Resilient and agile leaders nurture relationships, investing time and effort in building and sustaining trust. These relationships extend beyond the boundaries of their organisations and create continuous conversations which lead to shared solutions to challenges. It is heartening to hear many examples of supply chains and customers collaborating to sustain organisations in the difficult trading environment of the last three years.

Constructive challenge Talking to people who don’t think like us takes more effort but provides insights which may be far more valuable than existing in an echo chamber. Inspirational leaders are increasingly ensuring that they make robust strategic decisions by creating small groups of empowered individuals with the brief to rigorously test implications and impact.  The practice is not new. When co-writing the British Airways Leadership Story with Tony Voller back in 2004, we highlighted how the CEO, Rod Eddington, navigated the airline through 9/11 supported by a ‘Gang of 5’ constructive challengers who gathered ideas and perceptions from across the airline and beyond.

Learning The last three years have been characterised as ‘unprecedented.’ Reflecting on  the organisations who have navigated well, one characteristic stands out. They have experienced adversity before and learned from it. Going far beyond a mechanistic review process generating ‘lessons learned,’ these organisations have probed to discover causes behind symptoms and developed new ways of operating which anticipate change. Mistakes are shared not hidden and ‘near misses’ are discussed openly. This behaviour requires the visible sponsorship and involvement of all leaders to become instinctive. It requires inspirational leaders.

Behaviours to admire

As the season for recognition and awards progresses, stories are shared of the behaviour which defines excellence in organisations and their leaders.

With the privilege of coaching directors and their advisors over many years, delivering chartered qualifications and judging professional awards, common themes are apparent to me. They highlight the behaviour we admire and seek to emulate:

Explaining why – Organisations, initiatives and individuals who can clearly articulate their purpose are able to attract and retain the interest and attention of their audiences. Their decisions and behaviour are continuously judged against that purpose.

With a human face – It is easy to intend being clear about what you believe in, taking decisions in the light of those beliefs and behaving in a way which is consistent with your stated principles and values. Living your values at organisation and individual level takes effort but pays dividends. Values in practice are evident in the opportunities you choose not to pursue as well as the actions you take.

In conversation – Award-winning organisations and individuals recognise the importance of visible and continuous dialogue with their stakeholders. Their project Gannt-charts have ‘engagement activity’ as the top line. Effective conversations listen to the unfiltered voices of diverse people and respond in a way which demonstrates appreciation for ideas contributed and an understanding of concerns.  

Working together – Collaborative ventures, based on common understanding and commitment, deliver value for all participants. Identifying individuals and organisations with complementary strengths provides a foundation for creating productive and enjoyable relationships. Award winning partnerships are defined by natural curiosity, the desire to look beyond the current and obvious and anticipate changing trends and the opportunities they provide.  

For the greater good – Altruistic leaders, clearly motivated by more than self- interest, attract loyal followers. They understand that leadership is about more than directing and controlling. The generosity of spirit which enables others, characterises excellence. The media have labelled the late Queen Elizabeth II as a globally recognised exemplar of ‘servant leader’. Recognising the organisation as a separate legal entity, identifying the expectations and aspirations of all stakeholders and balancing the collective good are all characteristics of award-winning organisations.

And delivering – Promises made and kept inspire trust and confidence. They epitomise an organisation’s or individual’s lived brand. Intentions are laudable but delivery is essential. Excellence is demonstrated by behaviours that pay continuous attention to progress against objectives and that track both the achievement of outcomes and the approach taken.

Directors ask the right questions to develop ‘Situational Intelligence’

Effective boards know how to ask questions of their organisations and board advisors. The opportunities for individual directors to ask searching questions are often greatest during their own due diligence activity through the recruitment, appointment and onboarding process.

Remaining curious and asking challenging questions is an essential strength for any director. Vigilance is better than complacency given the significant responsibility and liability which directors carry.

Rigorous questioning can establish:

– Fashion or true sentiment

– Initiative or strategic intention

– Clear purpose or agile rebranding

– True or disposable values

It pays dividends to develop a real understanding of the context in which you are expected to add value as a director.

Words matter, behaviour must follow

Over decades, business language has developed. Fashionable boardroom vocabulary adopts three letter acronyms referencing philanthropy, socialisation, corporate responsibility, compliance, governance, stakeholder engagement, sustainability, diversity, inclusion, environmental conscience. The words which leaders use may change but to be trusted, true sentiment must be apparent and behaviour must follow.  A strong foundation for trust is to develop a clear and common understanding of what the words mean.

Purpose – why we exist

Purpose guides strategic choices, provides clarity and a rationale for activity.  It is seen by internal and external stakeholders and can guide consistency of messages. Director due diligence pre-appointment will often involve making judgements on the clarity and resilience of an organisation’s purpose.

Culture – what we believe and how we behave

Our values are evidenced by what we choose not to do as well as what we do and how we do it. Shrewd Director candidates use every opportunity to establish the extent to which beliefs, principles and values are embedded in an organisations’ practices. Beyond a menu of fine words is the reality of what is acceptable behaviour. Valuing difference underpins the practices which deliver diversity and inclusion. 

Strategy – what we aspire to be and how we will deliver that aspiration 

Multiple metrics arrive in the boardroom. Newly appointed Directors are in the privileged position of contributing to and observing strategic decision being made. Astute individuals notice what really drives strategic decision making and the success with which the organisation balances the requirement for short term performance with the need to build long term stability. Understanding the board’s appetite for risk and change and the level of organisational agility, helps newly appointed directors to challenge effectively.

Stakeholders – who we choose to work for and with

Our brand is a promise to our stakeholders. In a transparent world, all stakeholders can see the promises we make to each other. We are judged on whether our promises are fair and whether we keep them. If we can’t keep our promises we are judged by the clarity with which we explain why. In today’s turbulent world, demonstrating an understanding of  the attitudes, aspirations and intentions of organisational  stakeholders is one of the most critical strengths a newly appointed director can evidence.

Responsible business

Government, regulators, investors, talent and consumers are among the many stakeholders calling for clarity on the ways organisations make strategic decisions, prioritise and implement those decisions. Evidence is required to demonstrate materiality, commitment, action and the impact of initiatives.  The way in which a board formally and informally reports progress and performance is critical in developing stakeholder perceptions of the voracity of the board. Being a director is not for the faint hearted.

The art of conversation

We have learnt different ways of communicating in the virtual or hybrid world of work.

We try to create opportunities to talk and listen.

We try to notice how people are feeling.

We try to encourage others to share insights.

Our efforts are partially successful but we regret the ease with which these activities took place when we were together in the same place.

Are we mourning reality?

How does our age and tech savvy level impact our migration to this new world?

How depleted are our reserves of confidence and resilience?

Trust is the liquid which eases these conversations.

So which path will we take through the woods and who will walk with us?

2021 – A year to reflect on

As many of us return to being a largely ‘home bound population’, we may reflect on how well we have navigated our organisations through 2021. My ABC of strengths which differentiate successful leaders in the boardroom are:

Authenticity

Bravery

Curiosity

Being yourself and being courageous usually get a thumbs up from business founders and across the wider director community. They make sense. They come naturally.

Giving yourself permission and the time to be curious is often less instinctive. For some, curiosity is a natural strength. For others is needs to be nurtured. Curiosity sits behind so many ways in which effective directors think and act. Formulating strategy relies on the curiosity to scan the horizon; reviewing risk appetite involves the curiosity to build an understanding of different perceptions in and of the boardroom; inclusion relies on curiosity and a genuine interest in other perspectives.

Curiosity drives the places you go and the people you talk to; the times you stop and listen to someone who you haven’t heard before; the organisations you visit to see how they do things.

Curiosity is also about the holes you stop and look in; the skies you look up at; the puddles you jump in; the leaves you look under. Recapturing that childlike inquisitiveness can pay dividends in the serious world of business.

Being curious is often measured by the number of publications and information sources you read. Successful business leaders like Warren Buffett share their extensive daily reading regimes. Business publications signpost authors and articles. Strategy houses and academic institutions consolidate insights from multiple practitioners. We may simply resolve to read more in 2022.

In addition, we may embark on the year ahead with a determination to wonder and smile at the ingenuity of nature and mankind.

Now, soon and the future

Multiple research reports counsel against short term thinking and decision making in boardrooms. Regulation seeks to prevent directors capitalizing on short termism. Governance codes highlight the importance of balancing short term performance with long term stability. Working across different time horizons is recommended.

When a crisis occurs like a global pandemic, thinking beyond survival becomes more difficult. It is a brave board which sponsors significant changes in strategic direction and major investments. We will hear the stories of these brave boards, navigating their organisations through transformational change. We may hear less about the teams who enabled their informed bravery.

Behind every high performance board are professionals from many disciplines, accountable for providing intelligence to inform strategic decision making. Working in partnership with the board, they enable holistic questioning and are responsive to constructive challenges. From disciplines including corporate governance, compliance, strategy, risk, legal, internal audit, investor relations and communications, these experts enable board effectiveness.

To sustain a range of initiatives which simultaneously maximises short term survival/performance, while planning changes to the current business model and exploring innovative and transformation changes, calls for courage, imagination, stakeholder engagement and excellent programme management.

The Board’s future thinking is often overtaken by the time required to solve problems in the ‘now’ and ‘soon’. A recent McKinsey Sustainability at COP26 event predicts the emergence of ‘50 new Tesla’s’ led by innovative technologists engaging multiple stakeholders in their ambitious plans.

Beyond auditing the time investment each board makes in operational problem solving and designing the future, exploring board health and dynamics is often an effective means of identifying the quality and effectiveness of strategic thinking, decision making and monitoring. With better understanding of their effectiveness and the support of internal stakeholders, each board is well equipped to improve their strategy formulation process and outcomes.

Building Board effectiveness

Across the private, public and third sectors, organisations are seeking support from governance professionals to do more than ensure regulatory and legislative compliance. The boards aim to deliver and be recognised for delivering governance 

Far from expecting instant engagement, it is important to work from a board’s current intentions and invest time and energy in developing collective understanding and commitment.

Some boards exist in name only at Companies House, signing annual documentation.

Other boards set their intention as compliance, investing little or nothing in a stewardship and governance agenda.

Boards with governance professional support are likely to develop frameworks, practices and codes to deliver compliance and governance.

Those boards with an intention to embed governance, recognise the significant investment of time and effort required to create and sustain common purpose and behaviour.

Working with Boards and Governance Professionals provides me with heart-warming insights into the contributions each make to building board effectiveness. Here are the three most frequently referenced ways in which they do so:

Boards 

– Value the  independent professionalism of their governance support team beyond regarding them as a mechanistic function.

– Invest time and energy to build a trusted relationship and ask for help. 

– Collaborate to co-create their governance framework, processes, practices and agendas. 

Governance professionals 

– Anticipate issues and plan approaches to avoid repeat problem solving. 

– Enable their boards to ask the right questions and listen to a broad range of voices. 

– Enable better conversations between board members based on a real understanding of what each can contribute. 

Building Better Boards

Multiple lists specify the knowledge, skills and experience that boards need in order to perform their role effectively. There is no universally applicable formula for building a better board. Good approaches suggest that establishing a framework relevant for your own organisation is the foundation for succession planning, development and recruitment of directors. Excellent approaches also provide granular strengths analysis to specify the diversity of attitudes, beliefs, thinking approaches and behaviour that contribute to board performance. 

Enabling directors to play to their strengths improves contribution. Effective Chairs recognise the different strengths which each individual could contribute and create the environment in which imaginative discussion and constructive challenge take place prior to decision making. 

The canvas of strengths is broad and complementary. For example, to deliver a robust strategic process, your board requires a range of different strengths to analyse your organisation and environment, explore different strategic options, choose a path to the future, excite stakeholders to join in that journey and track progress and performance. 

Over the last 18 months, the level of external scrutiny of strategic process, board decision-making and behaviour has increased. Focusing on one aspect – Attitude to problems – astute observers ask: 

“Where are your problem anticipators, your opportunity spotters?” 

In times of crisis, problem solvers often get most headlines. They are the individuals who are quick to act to recover difficult situations and mitigate risks. Stories are told of their success, they prosper.

Less overt are the individuals who quietly prepare plans to take advantage of strategic change, selecting the opportunities to maximise value and minimising the risks associated with the changes. 

Whether on the board or informing the board, both sets of strengths are essential. Well done to the Chairs who enable a board culture that allows both approaches to be heard and applied. Their boards invest concurrently in modifying their current organisation model, developing new models and designing innovative approaches to the emerging macro environment.

Coaching for Governance

In boardrooms around the world, members have been busy navigating the global pandemic and the multiple consequences for their organisations. Emerging from the background are the professionals who enable those boards to govern effectively. Inspirational stories are told about the contributions they have made and awards ceremonies have recognised their efforts.

Expert at planning, organising and problem solving, governance professionals are increasingly recognised for their ability to provide individual and collective support to board members. As technical experts, support is based on signposting and sharing knowledge. As enablers of governance, the ability to create and sustain trusted business relationships involves developing an ability to coach board members. From on-boarding new members to facilitating smooth succession planning and implementation, the calm, purposeful and independent presence of governance professionals is appreciated by wise board members.

Governance professionals are in a unique and privileged position to observe board dynamics and track the impact of board decisions and behaviour. Learning how to use those insights effectively is a universal development priority. Governance professionals provide value by enabling each board members to understand the impact which their own beliefs, strategic decision-making and behaviour have on the organisations they lead.

Coaching at board level enables good governance by recognising the regulatory environment, the multiple roles which individuals are required to balance and the complex dynamics involved at that level.  The potential impact that changes to decision making and behaviour can have on the whole organisation system is significant. The principles and approaches that define good governance vary globally from the rules to the principles based and the locus of power varies across unitary and two-tier boards with all the attendant complexities this brings to strategic decision making. It is therefore safe to assume that the approach which has been successfully adopted in one situation by one individual cannot be automatically translated to another.

Experienced coaches provide support by enabling individuals to explore the situations they face, the strategic context in which they intend achieving their objectives and the range of stakeholders they expect to engage. Board members refer to the value delivered by coaches, providing a highly personalised sounding board as they plan, act and reflect on their impact and results

The Chartered Governance Institute highlights the way in which excellent governance professionals coach their boards. They act as patient, objective and wise counsellors, use their insights to anticipate issues, exert subtle influence and ensure robust discussion and strategic decision making.

For an opportunity to discuss that contribution, join me at the roundtable. 

CGI Annual Conference 2021