Can you think of a business strategy which does not include people? I wager you can’t because there isn’t one.
Your board’s business strategy is about how you and your colleagues intend to achieve your business objectives. No matter how hard you try you will not be able to exclude people.
Yet consider how the art and science of business has attempted to help you to airbrush real people from your business strategy.
People have been rebranded as human capital assets, human resources, hires, direct reports, and, silkily of all, leavers. Yet, doggedly, they refuse to act other than what they are: unique individuals with unique lives.
And, of course, you are one of these people too. Your board is merely a coalition of individuals, including you, for a relatively short time.
Do you and your colleagues refer to yourselves in the dehumanising terms above? Does your chairman ever turn to your CEO and say: “And now our most senior human resource, our CEO, will report on the quarter”?
Has your CFO ever reported to your board on the valuation or revaluation of “our human capital assets” which has its own line on the balance sheet somewhere between fixed and intangible assets? Of course not.
And has anyone ever asked anyone at your board meetings as to how their personal lives fared in the previous quarter? Did your minutes include under agenda item “personal lives” any of: birth, marriage, death, health scare, shoe lace tying, coming out, anniversary, or lotto win?
Work and personal lives should be kept strictly separate I hear you say. Not least because some unscrupulous director will take advantage of a personal weakness to advance their agenda.
And, you might say, capital is king and he – usually a he – waits for no personal life. And, you might add, lots of HR stuff is being done around “mat and pat leave” and other “people policies”.
You may be right but it’s not making a blind bit of difference to the overall catalogue of quiet human suffering that comes with work these days and especially, if like you, you sit on a main or operating board, ExCo or function team.
In a recent article in the Financial Times, Pilita Clark wrote about a CEO she met whose “underlings” did not know she had children. Apparently in some organisations it pays “to have kids if you are a man and costs if you are a woman”.
This isn’t sustainable. And while many organisations are implementing positive people policies, they don’t go far enough nor do they integrate personal lives – not just family life – into the core of their business strategy.
Your board might consider a business strategy which says “We will support at home and at work the network of people who work within and alongside our business to thrive so that we can be the best in the world at xyz product or service.”
Imagine if your board extended that strategy to you as one of its directors. Imagine if you felt wholly supported in your unique circumstances by your board. Imagine how much happier and more fulfilled you would feel.
Then imagine how much more effort – the famous 10% left at Reception – you would be willing to put into your business and into your personal life. And if you extended this approach to the people who report to you, would they not be willing to do the same.
T’will never happen, the naysayers respond. The providers of capital will see to that. Because capital is all powerful and power always wins.
But does it? Do you not see a shift, as I do, both in attitudes amongst progressive directors on boards and in the zeitgeist? Who would have thought that women would rebel in large numbers across the globe against institutionalised sexual harassment? Well they have.
And I believe this is only the start of the counter revolution to the extreme right and extreme left movements of recent times.
In Gestalt terms – opposing opposites – the Weinstein affair is the opposite of Trumpian sexism. I predict 2018 will present us with similar counter revolutions. A centre party figure will bring some balance to the polarised and coarse Brexit process.
And, I predict, there will be more movement in the workplace towards a balance between the needs of capital providers and the personal lives which suffer to deliver a return on it.
Watch this space.
“The cabinet has not discussed, let alone agreed, precisely what kind of relationship with the EU the UK should be seeking” writes James Forsyth in The Spectator (2 Dec) and he made the same point at a panel discussion on a review of 2017 and a preview of 2018 hosted by DLA Piper in London recently.
During the Q&A session at that event I asked him, from the floor, if he agreed that the decision-making reforms recommended in The Chilcot Report after the Iraq war have not been implemented in Cabinet.
Chilcot called out the negative role “sofa” decision-making processes played in Mr Blair’s approach.
Mrs May doesn’t use a sofa, we hear, but neither does she appear to make full use of the boardroom either. But to be fair to Mrs May, is she not doing what many Chairs and CEOs do “up and down” the country: that is to pay scant attention to the Noddy basics of good corporate governance?
These basics include a) meeting regularly b) a democratic agenda and open discussion including welcoming and hearing contrary opinions c) a decision which everyone backs, and if they can’t they must resign.
How many boards do you know that come anywhere near that standard? Few, I assume. And yet we expect our politicians to behave in a manner we eschew.
Whether in the Cabinet Room or The Board Room the cost of ignoring basic corporate governance is potentially catastrophic.
The Iraq example is well documented, and when historians come to write the story of Brexit – or if, as some believe, a public enquiry into the manner in which the Referendum was conducted – I suspect that the decision-making processes in Cabinet will become a subject of scrutiny.
For example, and whether you voted Leave or Remain, I’m sure you would have expected a) a meeting of the Cabinet to come to a shared view on the future relationship with the EU b) a decision on how to address the DUP and Dublin issues and an agreement with those parties c) and these steps would have been taken shortly after the Referendum because the equivalent of a corporate risk register would have flagged those issues then.
Please let me know if you can think of any part of those basic expectations that are unreasonable. If you can, I can’t.
When I put this to James Forsyth he made the reasonable point that the Cabinet is so large that folding chairs are required to supplement the basic set. No danger of a comfy sofa, then?
But surely this problem is resolved by doing what most businesses do which is to have a Main Board and an Operating Board or ExCo for day-to-day matters, where the bigger number can be represented by a COO.
But even if the Cabinet operated an OpsBoard or ExCo system it wouldn’t make any difference if they continue to ignore corporate governance basics?
And why don’t Prime Ministers, CEOs and Chairs follow the rules? Is it because they feel that such rules restrict their power? Or is it because they fear being voted down?
The answer isn’t as obvious as it may appear because, apart from the psychopathic leaders, most have high enough IQ if not EQ to value input from others. Big egos don’t do corporate governance is an answer, but a superficial one.
The deeper truth is that they fear confrontation, are unable to negotiate needs productively, and deeply distrust the world outside their own framing of it.
What if by some magic Mrs May woke up tomorrow and suddenly realised that what she desperately wants but is clearly not securing could be secured by holding proper meetings, would she hold them?
I believe she would. But such magic doesn’t exist in government. However, in the business world you don’t need sorcery to run good meetings, just a modicum of trust.
This is the text of a talk I gave at a workshop that I hosted at the IOD, London on 29 November 2017. A video of the talk is available here: https://goo.gl/A5CFzr
Yes, this talk is about board effectiveness and, yes, I am a board effectiveness consultant and indeed there is great interest in board effectiveness – just Google it and see.
But over the last 15 years, during which time I have worked with scores of main and operating boards, executive committees and function leadership teams, I have never, but never heard a director or team member express the slightest interest in board effectiveness as their number one priority.
No. Only one common frustration comes up again and again and I wonder if that’s what you’re seeing too, and it’s this:
Why can’t everyone on this board do what I want?
But no one says this out loud because everyone pretends boards are about business needs and not their needs. That’s why management-speak twists adjectives into nouns.
So, rather than saying “we need everyone on our board to be effective directors” we use distancing language and speak of “board effectiveness” as if it were a subject to be studied and not behaviour to be embraced.
This denial of reality means that many if not most boards are crucibles of frustration, hotbeds of conflict and what could be achieved, doesn’t get achieved.
But what if your board acknowledged reality, said the unsayable and acted accordingly? What if there were a process to so this, safely?
And have you considered the cost of everyone around the board table pretending to care about “the business” as if it were in another room and not about themselves who are in the room?
The cost of this systemic duplicity is huge because we know that although directors talk about acting in the interests of “the business” they act, once they leave the room, consciously or not in their own interests.
But since these personal needs are rarely expressed or acknowledged it means that all the energy of the board that could be focused on a shared purpose, isn’t.
And that must mean that the business is not only wasting a lot of money it is also losing out on opportunities.
Every director understands the principle of opportunity costs to the business as an entity but do they realise that they, personally, are often responsible for the business missing out on exciting and worthwhile opportunities because they are leading a double life?
Their public persona, which the board sees, is the “revenue generating, cost reducing and shareholder enhancing director” – red in tooth and claw.
What the board does not see is the hidden reality: what the director feels deeply, needs deeply and desperately wants to do if they could.
I understand that you may feel that your board or executive committee is different but let me give you a sense of how I’ve seen this behaviour play out in organisations and perhaps it may resonate with your experience.
I’ve identified a range of behaviour, which I call “least likely to say behaviour”. You can try this out, at home as it were, with your own board.
Just go around the boardroom and see they if there’s consensus on what each of you is least likely to say.
For example, a micro-managing CEO is least likely to say: “Don’t mind me, just get on with it, all I need is the odd email”
Or the director who can never acknowledge a mistake: “Sorry!”
Or, that the bully is least likely to say “Please”
or the passive aggressive: “I disagree”
or the Pleaser “No!”
or the Narcissist “What about you?”
or those who feel that they must be the brightest in room: “I don’t know, what do you think?”
And, of course, we recognise ourselves in these too, do we not?
But how much better life would be in your organisation if the negative impact of these different types of behaviour were reduced if only by a small amount?
What costs could be saved, opportunities seized and how much more fulfilling and rewarding it would be to sit on a board that had found a way to deal with these seemly intractable personality issues and conflicting needs?
Surely the obvious way to do this is for each director to come to an agreement that not only acknowledges the particular mix of behaviour on your particular board but some sort of agreement to start to change it?
And pigs will fly, I hear you say. No chance. Not on your board. “There’s no way that Joe or Josephine Bloggs on my board will change, Full stop”.
And you will rightly add that no amount of so-called transformational change programmes will change the fact that Joe Bloggs is a thug.
But are you sure that things are that hopeless? How do you know Joe Bloggs isn’t for turning or at least for shifting a little?
Who would have thought that Nelson Mandela and F W DeKlerk would find a way to avoid a bloodbath in South Africa?
Who would have believed that Ian Paisley and Martin McGuinness would become friends?
Who sets the limits to our ability to do the unthinkable?
But, you might argue, these are extreme situations where grand gestures are easier to muster. Easy or not they did change, and you can change, and your board can change, and you won’t know by how much or how little until you try.
And although the changing is hard, the steps are simple and there are only three:
Step 1: Figure out your PSB: “My PSB”
Step 2: Figure our your shared PSB “Our PSB”
Step 3: How will you and your colleagues make small changes in your behaviour “My/Our small change?”
It stands for purpose, strategy and behaviour.
Purpose means why; strategy, how and behaviour relates to the actions to implement the how to achieve the why.
So starting with Step 1 – imagine if each board member was willing to articulate to the others what their personal purpose in life is? And how they hope to achieve it. And what behaviour they will employ. That’s their PSB.
But, you may say, even if they were willing to share such intimate matters they, or you, may not know their PSB.
You don’t say? Now there’s a surprise. You mean that the directors around a board table may not know, precisely, why they do what they do or how or where they are going, or the meaning of their lives? You’re kidding me.
But I agree they sure as hell are not going to share any personal information of this nature unless they have an incentive to do so.
But what greater incentive is there than more personally fulfilling and financially rewarding work?
That brings us to Step 2: “Our shared PSB”
When I challenge an organisation to identify their purpose other than making money, which goes without saying, they struggle.
Yet when they attend to the question “Why, other than to make money, does your organisation exist” they invariably find an answer which is about people and not money.
As in “Our purpose is to develop people to make/sell XYZ for the benefit of stakeholders which include shareholders, employees, customers, suppliers, the environment etc.
There isn’t a business on the planet that could not use that purpose statement. Ultimately all organisations could be about helping people thrive.
Indeed, ironically, if they did so, they would make far more money.
What if your board agreed on a “why statement” for your business. So what?
The “so what” is that the purpose of your business is wholly interdependent with the personal purposes of the directors who direct it.
Let me be crystal clear about this: your business does not exist except “at law” and except to the extent that a unique group of people in a room decides it exists.
There are seven billion people on the planet. Each one is unique. That means each person on your board is unique. That means your board is unique.
A different group of people means it’s a different business.
Hell, just change out one of the directors on a board, especially if they are the CEO, CFO or Chair and the entire dynamics change. Overnight. You know it. You’ve seen it. You’ve been it.
That means there’s no generic solution to board effectiveness. There is no generic solution to making your board more effective.
There is only a unique solution to improving the performance of your board and that is to address the unique combination of the least likely to say behaviour on your board.
And the only way to do that is if everyone shares their PSB no matter how shaky, and if everyone agreed on a shared PSB for the business i.e. “our PSB” and then if everyone agrees to change their least likely to say behaviour.
And what, you may reasonably ask would incentivise an obsessive micro-manager to change?
The answer is they would – and do because I have witnessed it – if they feel that they could make small changes over time and if the benefit of doing so outweighed the effort of the small change.
And by small change I mean changing only ten interactions in every hundred. That’s just 10% change.
So, if each board member shared their PSB or, more accurately, their struggle with their PSB, and if the board agreed a shared PSB focused on helping people thrive and then if each director agreed to change their least likely to say behaviour by just ten per cent your board would become immensely “more effective” although that does an injustice to the increased sense of personal fulfilment, financial reward and community well-being that would accrue.
And why would changing least likely to say behaviour by only ten per cent deliver in aggregate such big changes?
The answer is that it’s the same 10% that people leave at Reception because organisations can’t deal with the whole person although they may pay lip service to it.
Beneath the least likely to say behaviour is the secret sauce we all posses: our hidden potential.
And why would any organisation not want to get value from the whole person since they are paying for that whole person? They would like to but often don’t know how.
And in the 21st. Century those organisations that get this will thrive and those that don’t, won’t.
Thanks for listening.
A video of the talk is available here: https://goo.gl/A5CFzr