Tag: Leaders & Leadership

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.

My thanks to Erika Percival, CEO of Beyond Governance for inviting me to join her for this fascinating conversation about a directors perspective on Situational Intelligence, Leadership and Governance.

Download AnnaBateson on The Situationally Intelligence Director

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 

In uncertain times we rely on our judgement to make ‘good’ decisions for ourselves, our organisations and our stakeholders. Very few of the decisions we make are binary. Navigating ambiguity comes more easily to those who tolerate uncertainty. For everyone, the activity requires energy. 

Individually, our habits and experiences impact what we notice and how we decide. To audit the quality of our decision making, we are advised to consider our behaviour and associated biases. This simple health check could be your starting point:

What information do we use to inform our decisions?

We create effective board intelligence processes but find that establishing what is good data and what is noise can be challenging. Common habits such as the tendency to ignore statistical evidence (Base rate neglect) and the mechanistic default to focus on easily obtained data (Availability bias) impact the quality of our decision making. A failure to ask probing questions to enable consideration of a range of options can result in partial, filtered board intelligence. 

Boards are advised to ensure that they think carefully about the nature and scope of the questions they need the business to answer.

Whose opinions and perceptions influence our thinking?

An invisible board habit of deferring to the most powerful person in the room and attributing weight to their words in the absence of evidence, is often present during board decision making (Anchoring and Authority bias). Our challenge is to check whether undue influence is being exerted by individual(s) with more authority/ power than us. We must be prepared to challenge statements to establish the intelligence on which others have based their opinions.

Other habits which draw us towards specific sources include our desire to create certainty where none exists and the inclination to filter out sources that disagree with our hypothesis (Confirmation bias). We like to belong to tribes and may want to fit in with the majority view, joining the bandwagon (Social Proof). However, most popular is not better or best and viral news can be false.

Boards are advised to create cognitive diversity in their decision-making forums.  When participants are encouraged to constructively challenge and express their alternative views, the quality of decision making improves.

How much does our experience hardwire our choices?

Our intuition may lead us to advocate or defend decisions and actions despite the absence of evidence.  Just because it worked for us before, does not mean it will this time. Our belief that because we have already invested resources we must continue with an initiative, may be flawed (Sunk cost fallacy). We believe we are adept at predicting the future and our arrogance can cause us to take uncalculated risks (Hindsight bias). If the experts we have invited to contribute have provided what we want to hear, then they reinforce our own views of what we think we know (Overconfidence effect).

Board members are advised to make a record of their experience and predictions in order to have a basis for reviewing their accuracy.

As we travel through unprecedented times, multiple authors provide checklists for leaders. They recommend mindsets and behaviours. The lists are long and may tempt us to focus on those we are missing. Instead, it might be more fruitful to understand our strengths and how we can deploy them appropriately. We can collaborate with other people whose strengths complement our own.

In January, MITSloan Management Review published research into the future of leadership entitled The New Leadership Playbook for the Digital Era. Defining leadership behaviours as eroding, enduring and emerging, the 24 behaviours reinforce the long term trend away from a planned and directive style towards an emergent and empowered approach. The research highlights the importance of developing the mindsets in which leadership is shared and individuals think like producers, investors, connectors and explorers to succeed in the digital economy.

In March, Eric McNulty writing for Strategy + Business urged that we put away the cape and tights of superheroes and focus on human behaviours. He recommended expressing genuine concern for those affected and creating the space and climate where collaboration, compassion and service are rewarded. Navigating with your moral compass and ensuring that values and ethics inform your decisions will engage those around you. His warning about avoiding decision fatigue is a powerful reminder that we need to take care of ourselves.

In June, Cappfinity CEO Alex Linley reminded us of the importance of listening to our whispered voice in order to understand our strengths.

“It is this combination of doing something well, something we are good at and that also being something we enjoy, that is energizing, something that we love to do, that is the authentic essence of a strength”.

Leading in these challenging times requires Situational Intelligence and energy. It is easy to become exhausted balancing multiple conflicting demands on our time and attention. This advice might help us make more time to do those things that make our hearts sing:

Making time to recharge our batteries is important.

Understanding our own strengths will enable us to deploy them effectively.

Focusing on our achievements together will enable us to build resilience.

True ‘customer’ insight  is a hot topic around boardroom tables, but often subsequent to a review of financial performance.  Strategic thinking involves understanding the perceptions and intentions of many stakeholder groups in order to create value propositions and engagement strategies. Failure to deliver perceived value to ‘customers’ tends to negatively impact the ability to deliver value to any other group of stakeholders. 

Who is the customer?

The first challenging question.  Determining who you want to provide value to may involve modifying the market segments you target. Identifying the customers you don’t want to serve is also critical. Consider inviting these elegant but invasive Green Parakeets into your garden and watch the small birds leave.

Who knows?

Decisions on who to target need to be informed by evidence so critical questions include ‘ how can we hear our customers first hand? And ‘who knows the history, perceptions and intentions of each customer?’

Who listens?

Consultancies and academic researchers have advocated an increased exposure of executive committees and boards to customers who reinforce organisational beliefs AND those that challenge assumptions. Listening to perceptions first hand can be educational but also uncomfortable.

Boundary workers with unique insights to share need to be invited to speak directly to strategic decision makers and supplement the real voices of customers. The voices of those who know may be filtered out before they reach the boardroom. 

Reliance on Big Data without the addition of human intelligence can lead to misinformed strategic decision making. Sifting messages from noise and recognising patterns is a critical board competence. 

Creating opportunities to listen to customers and boundary workers may require ‘Leading by Wandering About’ as opposed to MBWA (Managing by Wandering About). Physical and virtual wandering about are habits cultivated by effective directors and enabled by governance professionals.

What happens 

If you engage in conversations with customers, you build an expectation that change will happen. You also build an expectation that the conversation will continue. This presents challenges in establishing who is responsible and accountable for deciding and delivering changes and how performance and perception of value delivery will be monitored. 

Ensuring that change is visible and supported by necessary hard wiring and soft wiring of your organisation involves adopting systems thinking, understanding the inter-connectivity of all parts of your organisation.

Establishing which stakeholders are consulted before strategic decisions are taken and which stakeholders are informed after decisions are made, provides the foundation for an effective engagement strategy. 

So now after a year of courting a charm of Goldfinches to our garden, I am off to persuade the Green Parakeets to move on.