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.

 

 

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