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.

 

 

Transformation: why you should start phasing out that word

“The problem with transformational change is that it implies ordinary change has no change in it whatsoever”. So quipped the comedienne Sandy Toksvig on this subject.

If comedians are using one of your key business terms for their material, isn’t it time to reflect?

The problem is that the word transformation is now so deeply ingrained in the grammar of business language that’s it’s scarcely conceivable to imagine its absence.

If you type the word transformation into the search box of LinkedIn the result is shocking. The word is attached to everything from job titles to programmes. It’s ubiquitous.

But why shouldn’t it be? Why shouldn’t job titles include that word? What’s wrong with a bit of tautology if it encourages improvement? Does the use of language really matter?

It’s easy for comedians to joke and business writers to pontificate but it’s people like you who have to “deliver, execute, and step up”. And if you don’t, you’re in trouble. So for you, on a daily basis, this is no joking matter.

That’s why I invite you merely to consider phasing out the word, not dump it. Because it won’t be easy.

But you should consider doing so because it will make your life so much easier in the longer term and it will improve your business faster. I say this for three reasons:

First, there’s the slightly embarrassing reason  that the use of the word is, literally, ridiculous. And why would you want to be associated with anything even remotely ridiculous?

I mean how many transformations have you actually witnessed, heard about or “delivered”?  Few, I suspect, because transformation means changing one thing into another. It’s about alteration or conversion. These are lesser spotted.

I recall a brand of  toy our kids played with called Transformers. These looked like innocent toy cars but then, with a twist here and a yank there, they could be transformed into scary monsters. They were what it said on the box: transformers.

But few transformation programmes are sufficiently well funded, supported or thought through to be worthy of the name.

What they really mean is change. And change,  I’m afraid, is part of BAU. Calling it transformation helps no one.

Ryanair is an example of transformation. Michael O’Leary and his team contributed to the transformation of the airline market. Time was that flying was for a certain class of person and cost a small fortune.

Mr O’Leary, and other similar airlines, decided that this could be transformed and they did. But Mr O’Leary was called a CEO, not a transformation director.

Some  IT transformation programmes are genuine transformation programmes but most are change management programmes where the greatest roadblock is the behaviour of users. Believe me, behavioural transformation is as rare as hens’ teeth.

Between 1995 and 2000 I worked at ITN the UK news provider. I witnessed and was a minor player in the conversion of the newsroom from analogue to digital. That was a transformation programme.

While at ITN my job was to manage and exploit its moving picture assets which were significantly large and grew daily.

It took me five years to lead change in the behaviour of how moving pictures were used on the news bulletins and how their secondary rights were exploited. While I feel proud that I facilitated significant business and behavioural change, I transformed nothing.

So why use a word that will set you and the people you lead up to fail? The reason is that most people in business are terrified of behaving normally and feel that they must use abnormal and grandiose language.

And it’s certainly not normal to say you will transform something when you know you can’t.

You wouldn’t say at home that you have transformed the family culture by persuading everyone to sit around the table for dinner and chat instead of watching the telly. You might feel like you had done so but you know that if you do, you’re  just doing your job.

The second reason is that the word undermines trust in any change process. And without trust there is no change. If people don’t believe that change is possible and desirable they won’t buy-in. So why undermine your own change process?

The third reason is that it reminds me of Original Sin. If you are a Catholic or come from that culture you will know what I mean. If you don’t suffice it to say that the word transformation carries with it an implicit dollop of shame about how things are now.

If we need to transform then we must not just be bad, we must be terribly bad. And some business leaders are pass masters at creating feelings of shame.

The problem is that many so called transformation programmes fail because of implied shame because people don’t like to be shamed and are not motivated by it.

And if you’re trying to change something but call it transformation you might fail because of shame. And that would be a shame.

Purpose: why you should use that word carefully and sparingly

If you are reviewing your career and or organisational purpose you may find it a useful exercise to reflect on the meaning of the word purpose, it’s use and frequent abuse.

The word purpose is a noun meaning, according to The Oxford English Dictionary,  “the reason for which something is done or created or for which something exits”. The example given is: “the purpose of the meeting is to appoint a trustee”.

So far so straight forward. But the purpose (sic) of management-speak, with which we are bombarded daily, is to render meaningful words as emotionless as possible.

Emotion, which is the expression of feelings, is the mortal enemy of management speak because feelings make us question orthodoxy. And mainstream management orthodoxy doesn’t always brook questioning.

So, the word purpose which was going about its business contributing beautifully to our sentences down through the ages was recently hijacked by management speak and converted into a proper noun as in “purpose-led, purpose-driven and purpose based”.

What’s wrong with those terms you may reasonably ask? Isn’t the intended meaning clear? Is it not pedantry to challenge a well intentioned use of a word, albeit ungrammatical?

Well it does matter not only because grammar matters but because the use of the term “purpose-driven” may assume that we share the presumed definition of their purpose. And we may not.

There are of course many organisations whose purpose is to promote better behaviour in business and who use the word as a shorthand for a higher purpose. This works provided everyone has a shared understanding of what that higher purpose might be.

Your business purpose may be to maximise shareholder value. Another might see that merely as a collateral benefit of providing excellent products and services. A third might view their purpose as neither of the above but to be the best in the world at what they do. And so on.

The point is you can’t be told what your purpose is. It’s yours. You can be led or driven by your purpose but not by purpose itself.

The precise use of the word matters for a second reason: it’s imprecise use can contribute to conflict in the boardroom because conflict is reduced when board members have a shared purpose. A purpose can’t be shared fully if there are preconceived ideas as to its meaning.

The third reason you should use this word with care and sparingly is because it has a direct impact on strategy, another mightily abused word.

If purpose means why you do what you do, then strategy means how you achieve that purpose. It doesn’t mean anything else. As the OED helpfully points out, strategy serves purpose.

So if there is confusion about your business purpose then your strategy will be flawed. If some of your directors feel that purpose is a proper noun with an inherent meaning and others don’t well the board is going to be at, er, cross-purposes.

This happens more frequently than you might think. I’m often taken aback in my work  at how often boards, particularly operating boards, do not have a clearly articulated purpose and a strategy which serves it other than to make money which is neither a purpose nor a strategy but a result of both in combination.

If you treat the word purpose almost as a sacred term you will derive more benefit from it for yourself and for the people you lead and for the organisation for which you work.

Jim Collins in his bestselling book Good to Great set out a framework for what he called your business BHAG: a big hairy audacious goal. I call it purpose.

His framework requires your board to answer three questions: what can we become the best in the world at? what can we become passionate about? and how will we drive profitability?

I think his is an elegant framework for figuring out your purpose whether personal or organisational and I commend it to you provided you use the widest definition of profitability which can be intangible as well as tangible.

So, there is nothing wrong with board members wanting to be purpose-driven or led provided they all share the same meaning of the word. The problems occur when the don’t.

But communication in boardrooms is frequently constrained by interpersonal politics. This often results in confusion. The word purpose is a special word and should be used carefully and sparingly. Purpose matters.

Taking stock of your career: an alternative approach

You, like many who lead busy lives, probably take stock of your career at holiday time. Or, like others, you may do so more frequently and more formally using a variety of career management tools, books and even leadership consultants like me.

I offer the following approach as an alternative to these and, in some cases, complementary to them:

First, decide on your life’s purpose. That’s a tall order. And it’s completely different from “objective setting”. It can’t be done in five minutes but it can be done. And unless you carry out this step properly your career review will be flawed.

You don’t have to decide on a life purpose forever, just for now. You can change it later if you like. What’s important is that you have one.

But how do you go about it, properly? What more can there be to it than setting clear medium term financial, physical, psychological and any other goals you feel are appropriate?

There’s nothing wrong with this list of goals. Indeed if we all attended to this list in a robust way we might all lead happier and more fulfilling lives.

But I propose a different starting point because it delivers better results: what can and should you be?

Abraham Maslow, creator of the Hierarchy of Needs, invited us to “be what we can be”. His invocation should be part of your answer.

But I propose an additional nuance to his challenge: what should you be?

If this smacks of paternalism it’s unintended. By “should” I merely mean “ought” as in “what should you do to make the best of what you can be”. Maslow + , if you like.

So what can you be? Well that depends on what you’re offering to “the market”. For the avoidance of confusion my analysis excludes those who are not engaged with the market in any way.

In other words, what are you offering the market as an employee, consultant or pro bono volunteer or NXD in return for cash and/or intangible benefits? What could you offer? What should you offer?

You could offer more of the same, less or raise your game and offer more. But what could you offer at a maximum and what should you offer as a minimum?

The answer to what you could offer is a function of the difference between your best behaviour and worst. I use the word behaviour in the widest possible sense. It includes what you can do as well as how you do it in relation to others.

The answer to what you should offer is the difference between what you need from your work in financial and intangible terms and the cost to you in those terms.

So let’s apply this analysis to you as if you were a typical client: a senior leader in a business or organisation, although my analysis applies to all levels.

You have a reputation, a set of skills and experience as well as a level of emotional intelligence. Together these constitute your perceived value in the market.

As part of this perceived value you are known to be excellent at doing X , and have domain knowledge of Y. But what about your potential, Z? What do you or the market know about that?

In addition you have a known outstanding behavioural weakness at work A, and other career contextual weaknesses B and C comparative to others. The latter might include – though they shouldn’t and are illegal – age, race or gender. The extent to which these issues are abused is truly shocking.

Perfectly legal comparative weaknesses might include education, years of service, or a narrow range of experience. Whatever your weaknesses, your task is to manage them not ignore them.

The two most important components of this model are A and Z. Your outstanding behavioural weakness at work, as agreed by others, masks your deeper potential.

You have skills, competence and passions which no one has seen but which only you can reveal. Furthermore no one else owns your potential. That’s an awesome competitive advantage. And one which we rarely exploit fully.

If you can confront your outstanding behavioural weakness and commit to making small changes in it then you will soon find your hidden potential. It’s your hidden potential that is most valuable to the market. It is this you should focus on in your career review.

Once you have confronted your “A and Z” then you can figure out what you need from your work and at what cost.

For example, if you need high levels of autonomy, complex problems to solve and plenty of people around you but are not willing to “work all the hours” then you have to find a context that will deliver that outcome.

In rough terms I believe that if you can say 75% of the time “I love my job” – then that’s as good as it gets, except for those who make a living from their hobby.

If your self score is today less than 75% then the cost of what you are getting isn’t worth it. Often scores of less than 75% are reported to be related to a person or persons who are “making my life a misery” and “not to do with the job per se”.

This doesn’t stack. Managing relationships is what work is about. Either you find a new way of managing these or you should leave.

Either way you deserve your 75% and it’s there for the taking. The catch is that you must be willing to make the small changes necessary to achieve your true potential. Anything less is selling yourself cheap.

Zen and the Art of Being Alyssa Mastromonaco

I know it’s August, a time for light and fluffy business stories but this, I assure you, is not one of them. I’m deadly serious. Leadership development has to soldier on, even on the beach. It stops neither for sangria nor sun cream.

I have a crow to pluck with the Observer newspaper about its recent review of Who Thought This Was a Good Idea?, a new book by Alyssa Mastromonaco, who worked closely with Barak Obama for many years.

I have a very high regard for Mr Obama and, by extension, anyone he rates. My children roll their eyes at my Obama-isms: “yes you can”, I would say to them before school. And they would roll their eyes.

My children roll their eyes at my stories all the time. Like the story about the time I met Nelson Mandela – I did, in Cape Town in 1994. Unimpressed – or is it because of the frequency of my telling that story? I dunno – they roll their eyes.

Or my story about the time I performed the Heimlich Manoeuvre – I did, on a train at Victoria Station in London about ten years ago. At that one, they roll their eyes and at the same time they make gagging gestures.

Perhaps my children feel that my stories are thinly disguised virtue signaling. They’re so wrong. I’m merely trying to use stories to help others. But, as the Bard said, “sharper than a serpent’s tooth is the ingratitude of a child”.

Anyway, enough about me, and back to Alyssa Mastromonaco. Gawd I love her name. Don’t you? Why don’t I have a name like that? Ciarán Fenton doesn’t quite roll off the tongue like Aly-yssa-Mastro-mon-aco. I could roll that name around my mouth all day.

All that was by way of a circuitous introduction to address the critique the Observer reviewer gave Alyssa’s book with the damning summary: “It all gets a bit ‘Dear Diary’, giving the book a dated “Bridget Jones in the Oval Office” feel”.

That’s a bit harsh. T’is true that the book is heavy on personal anecdote, light on deep Obama insights. Yes, there are several pages of fine detail on how she managed to get the first Tampon dispenser into The White House, which left me blushing on my own, but that’s a statement about me, not she.

To be fair, she makes very clear, from the outset, why she wrote the book and what the book is about: it’s not only about the truism that “hard work and a good attitude” gets you far it’s also about how to do it, which she demonstrates through anecdote. And there are lots of good Obama stories.

And yes some of the anecdotes are a bit pedestrian, but work is sometimes a bit pedestrian, even in The White House.

I’m enjoying reading this book and recommend it, not only to those starting off their careers but to everyone interested in how to work under extreme pressure.

It contains useful “in the moment” descriptions about reactions to crises. I particularly liked her riff on her anger at being referred to almost like a “travel agent” by the Press on one occasion. She describes her feelings and her actions and how others reacted to them including how POTUS told her off for sending a “snippy email” about the incident. How many of those have you or I received or sent?

But he didn’t just tell her off. He told her she needed to “realise the power of [her] words” and she learned from him that “developing self-awareness is a lifelong process”.  It sounds like President Obama was a good boss.

I hope my children don’t read this. They will roll their eyes and make gagging gestures. Then again, they haven’t yet started work. And it ain’t easy.