Leadership: why directors should not imitate Mr Mourhino and Mr Ferguson

Jose Mourhino is the current manager at Manchester United Football Club and Alex Ferguson is a former manager of the same club. Both are famous. To some, that’s an embarrassing understatement.

But not everyone knows and loves football. I don’t love it. But that doesn’t mean I don’t like it or understand it.

A client recently sent me a link to an article about these two managers because he felt that I would be interested in the story from a leadership perspective. He was also clearly assuming that I had no interest in it from a football perspective.

To be fair, he has grounds for this assumption: he knows from our sharing of respective life stories that I was not sporty at school, was always last pick in playground footie and my nick name was “four eyes”. You get the picture.

But in my advancing old age I’m now getting tired of the assumption by friends, colleagues and clients that I know nothing whatsoever about football, rugby and cricket. The reverse is the case.

I’m a veritable walking-encyclopaedia of sporting trivia. Why? Because I get invited to major sporting events where, because I’m not deaf, I have to listen to endless punditry and I pick things up.

I’ve also spent a lifetime in pubs with blokes, quietly nursing my pint, whilst they willy waggle about their sporting knowledge as in: “ …no mate, you’re wrong..t’was the Forwards wot won it”. Occasionally I would get a sideways pitying glance but never asked for my views.

I would quietly think things but not say them: a) t’was hardly the Backs that won it for them b) why the necessity to collapse into Estuary English? The speaker was posh and had a First from Oxford and c) the Forwards, er, need the Backs.

I know lots about sport, actually: I could bore for England on “the slope” at Lords; I know, because I’ve been told a million times, exactly why England won the Triple Crown a million years ago – t’was because they were made to watch dots move on a laptop.

And, because I’m a closet Arsenal fan – I can’t come out because you have to be following a club ”man and boy” to have any street cred – I know and indeed agree that their forwards have an irritating tendency to “fanny around” the goalmouth.

But I will never be taken seriously on sporting matters. Indeed one mate was so outraged with envy when he heard that I was invited to a major rugby international he said that “I had no right to be there; that I know nothing about the game and that I simply do not understand that sport is tribal”. Yeah, tribal. I let it pass.

I enjoyed the game but didn’t lie awake reliving each phase.

I also know a bit about leaders in sport. Enough to know that they are poor models for leadership in business.

I read Alex Ferguson’s first book and concluded that he was a genius at understanding and nurturing world-class football talent. But for me he was not a leader business people should emulate and for three reasons.

First, his context was exceptional. Most leaders are not dealing with uniformly world-class talent and in the public eye.

Second, and to state the obvious, managing a football team is not the same as running a business and Mr Ferguson did not run the business side of the club.

Third, and I may be wrong, but I got the impression that he used persuasion techniques that would not entitle him to membership of The World’s Top 20 Emotionally Intelligent Leaders.

I also know a few facts about Mr Mourinho. He too is a talented football manager but I won’t be sending any of my leadership clients to sit at his feet and learn how to lead. A resolutely unsmiling persona works well on the touchline, but not in the boardroom.

The link that my client sent to me was to reported comments by Jose Mourinho saying that the Club had not evolved since Alex Ferguson’s departure and was stuck in time. My client was making the point that organisations need to evolve too.

I agree with this and also agree that one personality can dominate an entire organisation, even after they leave. Culture is reflected in conduct which is observed behaviour over time. And it takes time for behaviour to change. And in that, football and business are alike.

But just as the rules of football don’t apply to business, neither do the rules of business apply to football. And this applies to the timings of the departure of leaders. In business they should serve short terms, develop and then make room for others.

Sport is different. And in this regard I believe that Arsene Wenger has been right to hang in there. He is the Obama of The Premiership. He believes in the supremacy of people being the best they can be over winning. And, despite what my mates say, winning isn’t everything. But what do I know?

http://www.ciaranfenton.com

 

 

 

 

 

 

 

Board relationships: what if everyone on your board stopped lying?

Members of operating boards are constantly lying. Not about the business or dodgy behaviour, tho’ they sometimes do, but mostly they lie about themselves.

They are afraid to tell each other who they are and so they lie. All the time. So much so that they don’t realise it. They don’t necessarily have to speak to lie and so most of their lies are silent because those are the easiest to tell.

Logically, they know deep down that their behaviour doesn’t make sense. The success of their business is almost wholly dependent on the quality of their relationships with their fellow directors. Therefore you would think that they would do everything to maximise the quality of those relationships.

And nothing improves the quality of board relationships more than even a small improvement in trust. Trust thrives on truth, not lies. Again, that’s logical.

But when have you known logic to drive board behaviour? I’m regularly staggered by the number of operating board members, ExCom members and function team members I encounter who work together closely for years and years and haven’t a clue about the truth about each other.

By the truth I mean “the truth about the thing”. And we all know what “the thing” is. It’s whatever has caused most pain in one’s life. If ever you have had the privilege, as I have through my work, of hearing about peoples’ deepest pain they often start by saying something like “The thing about me is…”.

Even people who initially protest that they’ve had a halcyon life ultimately admit that it’s not true and that they too have had deep pain of one sort or another. Because pain is at the heart of human existence.

So what has all this to do with improving board relationships and therefore board performance and a sense of fulfilment? The answer is that, as the great philosophers tell us, confronting pain is the gateway to achieving potential or as some people rather elegantly put it: promise.

Promise is a sweet word because it captures both potential and commitment to doing what you say you will do.

So imagine what would happen to your board if everyone on it had the courage to admit their deepest pain thereby creating the possibility of achieving their greatest potential and therefore keeping their promises to be what they can and should be on your board. What’s not to like?

The answer is that some would prefer to chew their own hands off than open up about personal issues to colleagues. Others, more sadly and indeed more frequently, are not connected to their feelings, to a greater or lesser extent.

To them they have nothing to communicate. To them, all this reads like so much mumbo jumbo and psychobabble.

But it isn’t. Fortunately, recent advances in research into emotional intelligence means that the most fervent deniers of the impact of “soft issues” have been outflanked. Work on improving EQ/EI on boards is now, not just commonplace but, mandatory.

In my experience, denial is not the problem. It’s not knowing what to do. The “transformation” obsession in business is the root cause of this “rabbit in the headlight” situation about behavioural change.

Transformation in business is as rare as hens’ teeth. Small changes in behaviour, on the other hand, are not. If facilitated they can lead, in aggregate, to big impacts on outcomes.

At your next post operating board meeting lunch or drinks why not risk telling your colleagues who you really are. What’s the worst that can happen?

 

 

 

 

 

Business or personal strategy: which dominates your board?

What is it with our obsession with strategy? We are respectful of words like profit and loss but somehow treat strategy differently.

After 15 years consulting and nearly 20 years in corporate life, it is the word which stands out for me as the most abused because it appears to mean wholly different things to different people.

Conversations, which tend to be liberally peppered with it, bear this out: “I’m hiring someone to do the day to day stuff, so that I can concentrate on strategic stuff” or “We have just hired an awesome Head of Strategy” or “Frankly, and strictly between you and me, the problem with Joe Bloggs is that he’s not very strategic”.

Worse is when strategy is confused with purpose and execution as in “we intend to be the best in the world by hiring good people”.

Being the best in the world, if you mean it, is a business objective and is not a strategy. Hiring good people is as basic a leadership behaviour as breathing. Strategy, it ain’t.

But why the confusion? Strategy means how your board achieves its purpose. That’s it.

It should be decided once and, while it may change, it should stay fixed for a reasonable period to allow for its implementation.

Therefore there should be no need to use the word strategy in any context other than “since our agreed strategy is X then we are doing y or we should do z”. Or not, if those actions are not congruent with your strategy.

For example, Ryanair’s objective was, it appears, to be the best and most profitable no frills airline in the world – or words to that effect.

Its strategy appears to have been to train the market  to expect nothing but a safe and cheap flight. Its execution behaviour – love it or loath it – was to do everything to lower market expectations of airline service which had been raised over a generation which believed  flying was for a certain “class” of person. Ryanair broke that myth.

Proof that its poor treatment of customers was “strategic” is the manner in which it reacted almost overnight to the introduction of a business class product by rival Easyjet. Suddenly, Ryanair became user friendly, introduced its own business class product and sales went up by c 20%.

That’s a story of a simple purpose, sophisticated strategy and clean execution behaviour in action. There was no confusion whatsoever about the meaning of those words. The results bear this out.

The problem on many boards however is that there isn’t a shared business purpose nor, in addition, are the directors upfront about their personal purpose.

If your business purpose is not shared by your colleagues on your board and if your and their personal purpose is also not clear then it’s not surprising that your business strategy will be weak, at best.

Some clients “push back” on this by saying that “our purpose is to make money, everything else is strategy”. To which I reply “it’s no wonder you all have a different spin on strategy since making money is, again, as essential as breathing. It is a collateral benefit, not a purpose.”

The reason purpose and strategy are problematic is because they are difficult to get right. It is a truly challenging task in complex markets to get your purpose statement right and then to follow through with choosing the right strategy to implement it.

But, and perhaps surprisingly, this can be made much easier if your directors are upfront about their personal purposes.

After all, the purpose of any organisation is inter dependent with the purposes of each of the people working in it and, particularly, with the members of its board.

Initially I find this a hard sell. Directors  find it  difficult to accept that they constitute the business. They speak of the business in the abstract, as if it were a third party. But it isn’t.

It is the sum of their individual purposes brought to bear on a market need. But often the personal purpose of one or two individuals can dominate or skew business objectives and therefore strategy.

Once I get a board to address the matter of their shared business purpose in the light of their personal objectives, I find that business purpose and strategy can be reframed much more cogently.

Your CEO is key to the success of this reframing process. If he or she is willing to share their personal purpose and strategy honestly and openly they will be a catalyst for the others to do the same. This is called leadership.

There are three steps to harmonising business and personal strategy on your board:

First ask each director to articulate their personal financial and fulfilment needs and objectives and how these fit with their understanding of business purpose and strategy.

Second, in the light of these shared insights your board should work on the precise wording of business objectives and which all directors are happy to sign.

In my experiences this process can be difficult and can surface deep and painful disagreements. But it’s worth the pain because future disagreements will be more easily resolved by reference back to agreed objectives.

Finally when, and only when, there is absolute shared clarity on business purpose and one that fits with the articulated personal objectives of each director, can you move on to addressing strategy.

Then, often to everyone’s pleasant surprise, agreeing a good and robust strategy becomes relatively straight forward. Are you surprised?

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Impostor Syndrome: anyone on your board suffering with this?

Impostor Syndrome – the ever present fear of being found out as a “fraud” – is, according to recent research, more prevalent than we thought.

But if you or anyone on your board is suffering from this how would you or they know? Why does it matter and what can be done about it? Here is my take, based on my experience with directors:

The problem with some sufferers on boards is that they hide behind a veneer of super confidence. The glass is not just always half full, it’s ever overflowing.

Part of this confidence is often grounded in their formative  years in which they were the apple of their parents’ eyes – particularly their mothers’. A mother – or father – who gives a child unconditional love throughout their formative years gives them a gift worth more than gold.

But where this can go wrong is where this love is not tempered by boundaries and especially help with developing empathy towards others.

Children of doting parents often speed to the top of organisations because they don’t “do” the self-doubt that hinders others.

Yet something happens to them along the way which can be deeply unsettling: to their shock and horror they realise that their peers, bosses and underlings don’t see them as “God’s gift”. Suddenly their confidence is dented more grievously than many an alpha male (in particular) would be willing to acknowledge out loud.

How they process this shock determines the extent to which they suffer from impostor syndrome.

Many “plateau” and underachieve in their careers,  fearful that any further stretch will mean they will be found out.

If you suffer from this syndrome you can google remedial actions. It is more tricky if you suspect that one of your colleagues on your board is a sufferer and doesn’t appear to be self-aware.

The problem is that they often behave in a manner which does not attract empathy. They drive colleagues away using behaviour which smacks of arrogance and hubris.

Yet they are often “dying a thousand deaths inside”. One way around this – and it really matters because you need your leaders to be mentally healthy – is to create an environment where, in private, board members can express their vulnerability to each other honestly.

If you feel that on your board this simply would never happen, think again.

Who would have thought that Martin McGuinness and Ian Paisley would become friends? Who would have thought that Nelson Mandela and F.W. deKlerk could do a deal on apartheid?

If they could do the unthinkable, your board can. Brené Browne in her book Daring Greatly advances empirical evidence supporting the link between showing vulnerability and personal and organisational success and fulfilment.

Every board member carries some emotional baggage. That is the nature of human existence. For boards to ignore this reality is to miss a trick in their Target Operating Model (TOM).

A TOM is defined as the processes an organisation employs to deploy its strategic resources to meet a market need.

There are few more powerful “strategic resources” than the relationship between members of your board. After all, nothing gets done without them.

It follows therefore that it is in your personal interests and in the interests of your organisation to maximise the effectiveness, conduct and behaviour of your board members.

One way to achieve this is to work actively to improve your relationships with each other.

And if one of your number suffers from impostor syndrome it is empathy they need, not attack. It’s “arm around” not digs in the solar plexus they need, no matter how much they push those approaches away by their faux cocky behaviour.

One motivation for you to try this is that if you  don’t suffer from impostor syndrome you are most likely to be suffering from some other emotional challenge which no human being can avoid.

Aren’t there times when you could do with some empathy, support and encouragement? Unless of course, for you, there are none. In which case this won’t make any sense to you at all.

Your conduct in your boardroom: good, poor or bad?

If conduct is defined as “observed behaviour over time” then the conduct in your boardroom must be the observed good, poor or bad behaviour of you and each of your director colleagues, over time.

But who’s to decide what good, poor or bad is? And why have I not allowed room for calibrations like “satisfactory”, “excellent” and, wait for it, “outstanding”?

Good is good; poor is poor and bad is bad, provided you and your colleagues have a shared view of what those words mean in your boardroom. But the other words imply a comparison with others which can’t be done accurately and are therefore meaningless in this context.

Your board exists only in law. The word board is defined in the Companies Acts. But your board doesn’t and cannot “conduct itself”.

Board conduct is used as a term because it’s easier to say than saying “my conduct as a director is a function of my behaviour in the boardroom over time and our aggregate behaviour over time constitutes, in shorthand, our board’s conduct”

That doesn’t quite roll off the tongue, does it? But that doesn’t mean it’s not true. Moreover, the reason we use shorthand and management speak is because plain simple English would expose our fears.

And our fear is that if you own up to the truth about what goes on in in your board room you will he exposed and vulnerable because some people in the boardroom won’t play fair.

This argument would stack if the current arrangement were delivering results. It isn’t. You are more vulnerable in your dysfunctional boardroom – if it is – now than you would be if you all were to sign up to the fact that your board’s conduct is a function of your individual behaviour.

And what might incentivise you to take what might be considered to be a politically foolhardy step? The answer is threefold:

First, there is a direct correlation between good conduct and effective boards. It’s in your personal interests to have an effective board rather than an ineffective one. Sorry to state the obvious.

Second, it is in the interests of your organisation and society, which allows you to operate, that your board is effective.

Third, your mental health and wellbeing – and that of your colleagues and people in your organisation  – is directly dependent on the quality of your behaviour and your colleagues behaviour in your boardroom.

The last point above is the most important one of the three because it is the foundation of the other two.

So, what constitutes good, poor or bad behaviour in your boardroom?

For example, some of your colleagues may not share your definition of bullying behaviour. Some might take the view that they are merely “not suffering fools, taking no prisoners, or calling a spade a spade”. And other similar code for thuggery.

I don’t believe, for a second, that there is any room whatsoever for intellectual discourse on the definition of bullying at home, school, work or in your boardroom. If you are struggling to understand the term, chances are you are a bully.

Conduct is not a word we heard much about until after the Global Financial Crash. In the UK the government established The Financial Conduct Authority to tighten regulation on the conduct of banks.

I’m not sure how successful the FCA has been but I do know that the use of the word conduct in its title has been a mixed blessing. Good because it raises awareness of conduct generally and bad because the minute you give a noun a capital letter in business you half its power.

Your board exists to take collective decisions. The quality of those decisions depend on your conduct and that of your colleagues. That conduct is about your and their behaviour over time. Is yours good, poor or bad?

www.ciaranfenton.com

Your Board Effectiveness Review: fig-leaf, genuine diagnostic or neither?

In what circumstances would you or a fellow director not want to know how effective your board is? None surely, except of course if you and or they are part of the problem.

That’s why board effectiveness reviews are not embraced as fulsomely as logic would dictate.

After all, your objectives as a board depend to a large extent  on the quality of the relationships between your directors so why wouldn’t you want to know what’s getting in the way of success, if only from self-interest?

The answer is the same answer people give when self-interest would suggest they should eat and drink less and take more exercise, which is “it’s hard to do”.

Indeed it is but that’s no reason why you shouldn’t try. But, whilst I’m not trying to find excuses for you, it is nevertheless true that a number of factors work against you attending to this matter, effectively.

First, management speak doesn’t help. Note how business language distances you from the problem. It turns everything into a noun. Instead of encouraging you to find out how effective your board is, as in “very”, “middling” or “not at all” it forces  you to address a concept called Effectiveness.

Concepts like these are remote and somewhat fungible. Effectiveness can be in the eye of the beholder. It is a mass noun meaning the “degree to which something is successful in producing the desired result” allowing users to drive “a coach and four” through its meaning.

Then add two more nouns: put the noun “board” before it and “review” after it and, hey presto, you have three  serious nouns together giving the impression that you have measured the effectiveness of your board.

But we all know that most companies who publish these do so only because of the Code and that the information published tells us nothing substantive about how successful or not the board is in producing results or what the underlying problems are.

This outcome occurs despite the vast amounts of high quality information produced by skilled consultants who carry out the reviews and evaluations.

It’s not my area of expertise but I know from the reports they produce that they invariably surface key issues which boards do not address.

These issues typically relate to roles, composition, dynamics, relationships with the executive and stakeholders, as well as the performance of the committees, the chair and the secretariat if there is one.

One area in which I have experience is in supporting behaviour change. Frequently board effectiveness reviews reveal a need, indeed a desperation amongst some directors, for that type of change.

I propose three steps that you and your directors could take immediately which would make a significant impact on performance through behaviour change:

First, that you submit to a voluntary board effectiveness review annually whether you are listed or not, main board, operating board, executive committee or function management team. In other words, if you are part of a group that makes key decisions then embrace a review.

If you honestly believe that you and your colleagues are taking important decisions which will directly impact outcomes then why wouldn’t you want no stone unturned to clear a path to success?

Second, ensure that the review contains the most painful behavioural data available, otherwise it’s a complete waste of time. By this I mean the review must contain language like “The relationship between X and Y directors is at breaking point”. Everyone will know this, so why not make it official?

The important point is to have a plan and a process for dealing with “the elephant” once named.

Third, don’t publish anything save what’s required by law and even then, the blander the statement the better. In the case of listed companies I don’t believe that the current trend of having two beautifully produced pages in annual reports telling readers that the board is doing what it’s technically paid to do is adding any value.

Boards are like families, as recent research (HBR) bears out. And families rightly don’t want to squabble in public. Tempers fray. Often there’s more heat than light.

But if people have shared objectives then they shouldn’t mind shared feedback, no matter how painful, in the service of better personal and organisational fulfilment.

Do you agree, or are you part of the problem on your board? Either way, would you not like to find out?

www.ciaranfenton.com

Permission: the golden word directors should use more often

“I decided I would seek forgiveness rather than permission” is a statement I have heard depressingly frequently from directors and senior leaders regarding decisions they have taken.

It implies a) that they assumed their boss would refuse their request with no hope of compromise b) that, nevertheless, they felt they were doing the right thing and c) that the rules of good leadership did not apply them, at least regarding managing upwards.

Worse than taking action without permission is taking no action without permission, the grave consequences of which are that a significant number of ideas and projects are not tabled at operating board meetings because a director assumes there’s no point.

“The board will never wear it” is another sad and often heard mantra.

The problem is even worse regarding issues around risk, compliance and ethics. If I were given a pound every time I heard that an issue under one of those headings was “not called out because of fear of doing so” I would be a wealthy man indeed.

I believe that many of the recent front page business scandals were avoidable if there had been a culture of “permission to call matters out” on their operating boards.

Furthermore, these scandals are only the tip of the iceberg. Many occur that never reach the front pages or any pages.

But the area where permission is most required has nothing at all to do with scandals and everything to do with being allowed to live and act humanely at work.

Many senior leaders I encounter live under inhuman conditions. That’s not an exaggeration. Their high remuneration comes at a severe cost to them, their businesses, their families and society as a whole.

By this, I mean that in most businesses the majority of people are just trying to get through the day.

Only a small number are shareholders, but the system is geared to “maximise their value”. That means everyone else has to serve shareholder needs as if capital were the only input into the business that should be valued. It isn’t.

But try saying that at an operating board meeting discussing a decision that may have an adverse impact on people, families, communities or the environment and a highly positive impact on shareholder value and let’s see how far you get. “Good luck with that one” would be the withering riposte.

And more regulation is not the answer. In the UK there is a growing body of regulation requiring companies to “have regard to” issues other than the bottom line, but they are as toothless as they are ineffective.

Nothing will change unless and until operating boards give directors explicit permission, support and backing to take a broad range of non-financial issues into account and to say things out loud that many assume “won’t go down well”.

The problem with cultures where there is no permission to say the unsayable is that each director has his or her view of what is unsayable. But what if they’re wrong?

I’ve encountered many situations where directors bury good ideas on the incorrect assumption that the board will “shoot them down”. I wonder how a CFO should value that opportunity cost on the P&L?

CEOs will protest that it’s not their fault if a director incorrectly assumes that an issue can not be called out. I don’t buy that defense.

The role of the CEO is to create an environment in which everyone can do their best work. Since everyone is different and has varying levels of emotional intelligence, then it is the duty of the CEO to get to understand the nuanced unique behavioural needs of each director and create a space in which they can be what they can and should be.

“I’m not running a f*****g crèche” is the sharp retort I receive from some CEOs when I say this.

Indeed they are not running a crèche. But the response implies that there is an expectation that everyone should behave like a “grown up”, that there is consensus on what that means and that there should be no need for “namby pamby mollycoddling” of individuals who need to “man up”.

This reminds me of the “big boy” letters which banks send out to customers about taking responsibility for risk. Apart from the sexism and infantilising language, the attitude just doesn’t stack as a strategy for delivering business objectives.

If it did why was there a global financial crash? Why are so many high profile brands paying out millions in fees on the back of poor conduct that should have been called out at the very first operating board meeting which tabled those decisions? Why are stress levels so high, mental health so poor and so many marriages and relationships wrecked?

Why if the dominance of maximising shareholder value is so successful are we in such a mess?

The answer, of course, is that nothing will change until enough people at the bottom or in the middle or the ranks of recently appointed board members ask for and receive permission to behave differently. This is not a top down solution, but bottom up. It starts with courageous individuals, not with organisations.

That said, perhaps there are a few wealthy CEOs out there who have fought their way to the top that feel safe enough now to consider helping to create a business environment in which boards will grant the permission of the sort I describe.

If you’re out there, please can you put your hand up? The business world needs you now. Your financial success may well have come at a cost to others or the environment at a time when the old model was in full force.

The old model is no longer fit for purpose. Sooner or later the people on whom the board relies to “execute strategy” will stand up and say – “No”. If enough of them do that, telling them “where to go” won’t be the right answer.

The right answer is to permit them to be what they can and should be in the service of a shared purpose which values all.