Why business plans should include director behaviour forecasts

It’s the holiday season, and operating board directors like everyone else are setting their Out of Office email modes to On. But while they may be demob happy, many are not happy at work at all. Not one bit.

Typically the cause of their ennui is the dominant poor behaviour of other directors, as they see it, towards them on their operating boards. It often keeps them awake at night. It makes some even weep. Over the years I’ve identified three broad categories.

First, there is bullying behaviour. It can be conscious or unconscious, but the effect is the same: other people suffer. And usually, that means the business suffers because the business is a collection of people.

Second, is passive aggression. This too can be conscious or unconscious but has the same impact as bullying does on people and the business.

The third is hubris. You can be neither a bully nor passive aggressive to exhibit hubristic behaviour. Exponents chief behavioural trait is that they appear to listen to you but not a word you are saying is getting through. They are often very nice people, and for whom the glass is always not just half full, but overflowing.

Very little upsets them. But, as one client put it, “they are capable of extreme levels of unconscious cruelty” towards others. The impact on the business can be disastrous.

While we are all capable of each and all of the behaviour listed, my focus is on the impact of those whose dominant response is just one of the above and is extreme.

So, even if only half of what I say is true regarding the impact on the business, why don’t operating boards try to predict director behaviour in their business plans? Surely it would make commercial sense to do so?

The answer is partly that the bullies, passive aggressors and hubristics (sic) sign off the business plans and partly because there is no business planning language to cover off this nebulous issue.

I propose that the solution to the second part of this problem is to have a section under the SWOT heading in the business plan that addresses poor conduct i.e. poor director behaviour over time is a top risk.

This solution may help to solve the first part of the problem because any Threat in the SWOT section of a business plan is a risk and there is precedent for including mitigation of risks in business plans as a matter of good practice.

So is this not an opportunity for business planners to put in place, at the outset, processes and governance structures that at least reduce the impact of the risky behaviour?

And of course, business planners can avoid the thorny issue of naming the behaviour in the business plan. All they have to do is to name the potential risk attached to it.

For example, one risk is the failure by any director to call out their concerns on any issue at operating board meetings which could lead to significant risks to the business.

Therefore the business plan should include processes to mitigate that conduct risk. I propose the appointment by rotation at each operating board meeting of a Devil’s Advocate whose sole purpose at that meeting, and with the full permission of the other directors, is to spot and call out conduct risk by drawing attention to behaviour at that meeting which could give rise to such a risk.

Now that step would require courage – a behaviour which is the greatest mitigator of all risk events in business. And courage thrives where directors “have each other’s backs”.

So, as you set your email to OOO for your summer break can you honestly say that your colleagues have your back or, indeed, you have theirs? What can you do to improve that mutual support when you return? What might stop you?

Perhaps you might feel better if you gave these questions some thought on the beach. At worst you might be able to make small changes that could make a big difference.

Happy holidays. Happy returns.

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