Three reasons why #Boards should consider an informal behaviour review alongside their Board Effectiveness Review #governance

boardmeeting

Board Effectiveness Reviews are now commonplace. Their outputs are included in annual and other board reports.

But are they designed to assess underlying behaviour – good and bad? Will they flush out a tyrannical board member or a culture in which it’s difficult if not impossible to “call out” unacceptable behaviour? I doubt it.

There are three reasons why #Boards should consider an informal behaviour review alongside or after their standard effectiveness review.

First, a behaviour review will deliver a higher return on the investment in the Effectiveness Review process because it will address underlying behavioural cause, not just symptoms. Even a small change in behaviour is likely to lead to better commercial and sustainability outcomes.

Second, on a divided board – which is more common than often acknowledged – the effectiveness review is a good excuse to sort out damaging board conflict without further fuelling discord.

Third, behaviour reviews are not just about dealing with the bad behaviour but replicating the good. Since effective reviews are strongest in their highlighting of er, effectiveness, then a process which captures, replicates and enhances that behaviour must be good for the business.

Many boards carry out formal Effectiveness Reviews because they feel they must. A bit like CSR. Of course many do so for the right reasons but they are likely to be the least in need of remedial action.

So, hard-as-nails CEOs are unlikely to welcome any scrutiny of their behaviour which might suggest that they should change it. Unless of course – psychopath CEOs aside – they might welcome an excuse to do so, especially if they can see a link between their behavioural change and improved commercial and personal outcomes.

In my experience even those CEOs and NEDs who exhibit low EQ often secretly harbour a desire to improve it but don’t know how.

The process for an informal board behaviour review – note lower case and the importance of informality – is straightforward:

Step 1: one to one interviews by an external party with each board member. They would be invited to comment on the best and worst behaviour of each of their colleagues using real examples.

Step 2: a facilitated plenary session or sessions addressing organisational purpose, strategy and behaviour and how it fits, or not, with the personal purpose, strategy and behaviour of each of the members of the board.

Step 3: the facilitation, mediation and supported implementation of behavioural change agreements between board members as well as, gently, legislating for their breach.

For some readers the likelihood of their CEO agreeing to such a process might seem laughably remote. In which case the weakness of their formal Board Effectiveness Review is already exposed.

Ciaran Fenton

January 2017

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Want to talk leadership? Contact me through my website or call me on +44 (0) 207 754 0335

#CEOs, #CXOs and #NEDs: consider three New Year #smallchange resolutions, especially as the UK will trigger #Art50 in Q1

The “Phoney War” will end in Q2

I don’t buy The Times leading article argument (Jan 2) that “the triggering of Article 50 will be followed by more phoney war” because Brussels’ attention will divert to the elections in France and Germany and the Brexit negotiations.

On the contrary, I believe the mood in the UK will change, icily, on April 1st, 2017, the day after the UK legally commits to Brexit. Once you agree to another’s deadline in a negotiation, you are as we say in Ireland, fecked. People will feel this reality acutely on April Fool’s Day, especially in business.

Brussels will play out the negotiation up to and past the deadline in 2019. Why would they do anything else, unless they are incentivised to do so? Either way, since the UK is selling, not buying the UK, not Brussels, will have to make the bigger concessions.

Meanwhile on January 20th. 2017 Mr Trump will become President of The United States of America and its Commander in Chief. I don’t concur with those who say our worst fears regarding his Presidency will prove groundless. They will prove conservative.

It’s against this grim background that CEOs, boards and non-executive directors return to work this week and prepare for their January board meetings. Any time is a good time for them to consider changing their behaviour to reduce risks and maximise opportunities.

But this is an especially good time for them to do so even if only 50% of my gloom is warranted and even if you are one of those who believes (and you may well be right) that there will be short term pain and long term gain by these changes.

I, therefore, propose Boards adopt three resolutions at their January meeting:

Resolution §1: The Board prioritises behaviour over performance

The default behaviour of most boards under stress is to cleave to “the numbers” which measure performance against plan. The problem with this approach is that it ignores the fact that behaviour drives performance not the other way around.

Performance is an outcome, behaviour the route to that outcome. It follows that behaviour trumps performance as a priority. Therefore the Board should map the behaviour required of everyone which is most likely to maximise the probability of success and minimise risks.

Resolution §2: The Board expects continuous behavioural change

In every human endeavour, constant improvement is key to success. This truth is most obvious in sports where the link between behaviour and performance is painfully evident.

Last week Manchester City lost 1-0 to Liverpool after a run of three wins. City’s coach Pep Guardiola made no attempt to hide his pain in the post match interview. All excuses aside, it was individual behaviour which led to their loss and Liverpool’s win.

Andy Murray’s open and tortured relationship with his behaviour is further proof, if proof needed, that our main competitor is ourselves.

Yet Boards rarely put out a message saying that it will do all that it can to help the people who work in their organisation to be what they can be by helping them to change continuously.

Resolution §3: The CEO, CXOs and NEDs will model continuous behavioural change

Many CEOs, Boards and NEDs believe that behavioural change must start beneath them. They forget that even small change by them as individuals, with each other and in their role as leaders has an exponential impact on those who work for them.

By small change, I mean changing a minimum of ten actions in every hundred from default behaviour, just 10% change. That’s small change.

• If, as CEO, you have a tendency to speak over colleagues at board meetings, try doing it ten times less.
• If, as CXO, you have a habit of pointing, not fixing – notice your behaviour and then try to make a small change.
• If as a NED you sometimes fail to call out issues you know you should, notice why you don’t and then try to do so ten times more often.

If the CEO, CXOs and NEDs all change ten interactions out of every hundred, the aggregate impact within the Board and throughout the business will be bigger than the sum of the changes. But small change is hard. That’s why it’s worthwhile in sport, business and at home.

It may even reduce your risks and maximise your opportunities and fulfillment in 2017.

Ciaran Fenton

January 2017

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Want to talk leadership? Contact me through my website or call me on +44 (0) 207 754 0335