CEOs: are you the biggest problem in managing this crisis?

“Leaders must recognise people’s grief and assist them in finding meaning,” writes David Kessler in the July-August 2020 issue of Harvard Business Review in an article titled “Helping Your Team Heal”.

By grief, he means “the loss of control, the radical change in how we were living, the anticipatory grief we felt as we imagined future job losses and possibly the death of loved ones”. He goes on to explain how leaders can use the five stages of grief, plus a sixth – meaning – to “take care of their workers”.

In the same HBR issue Kevin Sneader, the global managing partner at McKinsey, talks about choosing “candour over charisma”; Chuck Robbins, CEO at Cisco says that “…The culture of organisations, and their people, and how leaders show up during the moment – all of that will define who’s going to be successful in the future”.

Peter Scoblic, Principal, Event Horizon Strategies writes that “…at the very moment when the present least resembles the past, it makes little sense to look back in time for clues about the future”.

These insights are all helpful, especially Scoblic’s emphasis on “scenario planning…to anticipate possible futures while still operating in the present…to build a dynamic link between planning and operations”.

But I fear that the “emerging from the crisis” industry will result in leaders repeating the errors made during the 2008 Global Financial Crash after which they pathologised “their people” and introduced a raft of downwards focused “reforms” to “fix them” without pausing first to look at themselves in the “leadership mirror”.

The result, according to many surveys, was that little changed in terms of behaviour, especially in the financial services sector. It appears that everyone, except taxpayers and the lowest-paid workers, got away with it.

Not this time. This crisis is not the same as the Crash, which was caused by unchecked conduct. This crisis was caused by a virus which has changed the nature of the body politic.

So, as the CEO you can decide to focus entirely downwards – no one will stop you because you are the boss.

Or you can give yourself a year – yes, a full 12 months – of personal purpose, strategy and behaviour reflection, reframing and relaunch.

A year because you will need at least that amount of time to reflect, to take feedback in real-time to reframe your leadership and to relaunch yourself as a credible “cum-COVID19” leader with the humility, nous and emotional intelligence to make the tough calls and to manage relationships in a manner which will not send your organisation into an uncontrollable tailspin at worst or lead to missed opportunities at best.

I propose three steps:

Step 1: Review your personal purpose

  • How has the pandemic changed your personal purpose? 
  • If not, how can it not?
  • Are you somehow immune from the psychological impact of the pandemic because you are the boss?

Step 2: Reframe your personal strategy

  • Having decided on a new personal purpose, how will you achieve it?
  • What fresh approach will you use?
  • What leadership strategy got you to pre-COVID-19 and how can you change that strategy now, because you must?

Step 3: Relaunch your personal behaviour

  • How will you heighten your empathy, because your “people” need it?
  • How will you deepen your self-awareness, because you risk making irreparable mistakes if you don’t?
  • How will you negotiate your needs productively because people won’t give you the discretionary effort you desperately need if you “drive change” rather than lead it?

I have developed a one-year programme to assist CEOs, leaders and NEDs in avoiding being “the naked emperors” in their organisations, to prevent unforced errors and to emerge from the crisis feeling more fulfilled, reputationally enhanced and whole.

Please contact me at cfenton@ciaranfenton.com for further information.

Ciarán Fenton

GCs: relaunch, don’t cut, your law department cum-COVID-19

Everyone is talking about post-COVID. This is wishful thinking. There will be no post-COVID. Ever. Vaccine or no vaccine. As one client put it: it will be forever “cum-COVID”, not post. We will live with this pandemic and its impact for the foreseeable future.

As after World War II, nothing will be the same again. Only worse. At least during that war the foe was in plain sight and the pubs were open.

COVID-19 has changed everything. All the assumptions in your organisation’s target operating model are now up for questioning.

  • How, will your customers’ needs have changed? For they surely will.
  • How therefore will your strategic resources required to meet those changing needs, in turn, need to change, especially your people? And how will these have changed, irrespective of changes in your customers’ needs?
  • How, therefore, will you alter your strategic processes to apply your resources to your customers’ new demands?

As if these questions were not enough, the fundamentals of capitalism, already under scrutiny pre-COVID-19 via the ESG and other movements, will come under accelerated pressure as the societal consequences of the size of state bail-outs of businesses in furlough and other schemes become clear.

One consequence is that your organisation will come under accelerated pressure from society – which includes you, the people who work for your organisation, who buy from it, who sell to it, who sue it and are sued by it – to prioritise the environment, society and governance issues before profit.

The society Genie is not going back into the business bottle. COVID-19 is the final nail in Milton Friedman’s coffin. And if you doubt this ask yourself why the Black People Matter campaign took off so instantly, so virally, and so viscerally, given that Mr Floyd was not the first victim of police brutality and mobile phones have been around for some time?

One part of the answer is, as an Observer editorial pointed out, that “…The disproportionate impact of the virus on black people, in terms of death and infection rates, has unforgettably dramatised the corrosive inequality at the heart of American society.”

So, when this phoney war against the virus is over – by phoney I mean when the furlough money, cash balances and state intervention monies are all gone – we will have the mother of all depressions with unprecedented levels of unemployment – and in those circumstances, society will not tolerate extreme Friedmanesque behaviour by any organisation. And it won’t be polite about it. And society includes you and the people in your organisation.

So, it’s against this dystopian background that you are leading the legal function in your organisation. You are the CEO of Legal whether you have a team or whether you are a sole GC or Head of Legal and whether you like it or not.

You may be tempted to react to your organisation’s inevitable call for cuts by faithfully taking an axe to your legal budget, doing even more for even less and performing the “diving catch” more frequently and more masochistically than before.

Don’t do it. You, your organisation and society will regret it. Don’t cut. Instead, relaunch your law department using these seven steps and remembering that your purpose is to enable better decisions using excellent legal counsel and process. You are now mission-critical to your organisation’s cum-COVID-19 survival.

  • Step 1: help your organisation relaunch it’s “PSB” – its purpose, strategy and behaviour plan
  • Step 2: decide, don’t ask, what ten things the business needs in terms of legal counsel and process to relaunch itself
  • Step 3: set up a Legal Operating Board which includes “non-lawyer” experts in finance, IT and internal communications to run Legal as a break-even business
  • Step 4: sell to your Board the purpose of Legal as an enabler of better decision-making for the good of society and “the business” in the light of COVID-19; be ready to walk away if they don’t buy it; you’d be unwise to stay in those circumstances, and don’t bluff
  • Step 5: invest in relationships with Law firms to help you negotiate the gap between you and the C-Suite; if you say there’s no gap then you are part of the problem
  • Step 6: negotiate a business plan, using zero-budgeting, with “the business” which meets its needs and its responsibilities to society while honouring Legal’s purpose
  • Step 7: acknowledge that you the GC are the CEO of Legal, whose job is to deliver the ten things for ten dollars and not ten for seven.

I have set these steps out in more detail in my ebook InHouse TOM – a new target operating model for the law department, law firm & C-Suite relationship which you can download at https://www.ciaranfenton.com/downloads-tools.

Also you should read Section 4.12 of the recently published Mayson Report if you want to get ahead of the direction of travel of legislation in the provision of legal services. Recommendation 20 of the Report is that law departments be the set up as separate business units.

Currently I am facilitating the implementation of these steps with a number of GCs in the UK and in the U.S.A.

Please email me at cfenton@ciaranfenton.com if you would like to hear more.

Ciarán Fenton

What should COVID-19 CEOs do about The Mayson Report Section 4.12, if anything?

On the morning of June 11th. 2020 The Centre for Ethics and Law, University College London, published a report written by Professor Stephen Mayson with the title: “REFORMING LEGAL SERVICES – REGULATION BEYOND THE ECHO CHAMBERS – FINAL REPORT of the Independent Review of Legal Services Regulation”.

This Report almost certainly did not form part of the bedtime reading of most CEOs, board members and management teams that evening. 

It should have done.

Or, at the very least, they might have read or yet might read to their advantage pages 147 to 152 which relate to “Corporate legal departments and in-house lawyers”. 

Even if you are a “COVID-19 CEO” – i.e. a CEO trying to get your business through the pandemic – with no legal department or in-house lawyers you should read these few pages because many of your customers and/or your suppliers will have law departments. 

In any event, you will have dealings with private practise lawyers. These are connected to in-house lawyers with whom they maintain almost umbilical cord closeness because most in-house lawyers started their careers in private practice and because the system does not allow that cord to be cut for reasons which become clear if you read the other 315 or so pages of the Report.

These pages also go some way to explaining why you call your in-house lawyer your “in-house lawyer” a term you do not use for any other executive in your business. For example, you don’t call your CFO your “in-house accountant”, do you? 

So what is this Report about?

Helpfully, Professor Mayson includes a section headed “In a nutshell” in his Preface as follows:

“The current framework for the regulation of legal services in England & Wales has its origins in the self-regulation of the legal professions. As a result, it is superbly (and rightly) designed to preserve and protect those legal services that are critical to the rule of law and the administration of justice, and the integrity of the practitioners who provide them. The downside is that this regulatory approach is then applied to all other legal services and all other providers. In practice, lawyers have consistently estimated that on average only about 20% of their work falls into the category of services that are ‘reserved’ exclusively to them – though it will be higher for most barristers…The conclusion of this Review is that the regulatory framework should better reflect the legitimate needs and expectations of the more than 90% of the population for whom it is not currently designed. The current arrangement of ten front-line regulators, plus an oversight regulator, is cumbersome…this Report proposes that we should in future allow the registration and regulation of all providers of legal services, whether legally qualified or not. Registration and regulation should be the responsibility of a single, sector-wide, regulator to ensure a common, consistent and cost-effective approach, subject to a statutory duty to apply only the minimum necessary regulation. The nature of the regulation applied to registered providers would be founded on the public interest of furthering the rule of law and administration of justice…”

I suspect the 90% revelation will shock you as much as it shocked me as will as the ten plus one regulators involved who I expect will be a bit cool about the suggestion that they should be replaced by just one.

In his Preamble, he goes on to say, inter alia:

“… The legal profession’s echo chamber is a comfortable and comforting place for many of its members and representatives. The reverberating belief is that all is fine, that citizens are best served by qualified lawyers, and that the world would be a better place if all providers were like them – in fact, better still if they were the only providers…There is talk of lawyers versus the rest – ‘us’ and ‘them’ – where the latter are variously described as ‘non-lawyers’, the ‘unregulated’, ‘para-legals’, and ‘support staff’. In short, they are labelled by reference to not being lawyers. The individuals who provide legal services in law firms are more likely to be introduced as ‘fee-earners’ rather than as legal advisers, who will work ‘chargeable’ hours. They do so in order to generate ‘profit per equity partner’. The insidious consequence of this language is that employees appear to clients to be engaged to baffle them with technicalities and to earn money from them rather than advise; to maximise time that can be charged to clients (often at the expense of developing relationships, support, and meaningful and timely communication); and to charge for the input of time, irrespective of the value of the outcomes of that effort. The problem with the lawyers’ echo chamber is that its beliefs and opinions are shared by so few others. It matters not whether those beliefs and opinions are ‘right’…

Lawyers may agree or not with Professor Mayon’s tough analysis but if he is right, shouldn’t that worry you, yor board and management team?

There then follows a list of 13 “Findings” and then no less than 46 “Recommendations” in respect of which Recommendation 20 on page 151 will be or should be of interest to you, your board and management team for it states:

“An in-house legal department should be capable, for regulatory purposes, of being registered as a distinct business unit, so that the department’s delivery of legal services would be subject to the same regulatory obligations as any other registered provider. Individuals within such a registered in-house unit should also be registered personally if they carry on activities for which before-the-event authorisation or personal accreditation would otherwise be required.”

Professor Mayson sets out his reasons for this Recommendation on pages 147 to 151. Of these, the following points may be of particular interest:

Most of the organisations that maintain in-house legal departments will not regard ‘legal services’ as their main activity. However, the principal activity of the in-house legal team will certainly be the provision of legal services to their organisation. Analysis of the legal services market shows that a significant and increasing volume of lawyers (about 20%) and legal services are now in in-house settings. There is little doubt that a tension is inherent in this relationship when the client for legal services is also the adviser’s employer. The usual expectation of ‘independent’ legal advice is often stretched….”

Think about that statement for a minute. Your company is your in-house lawyer’s client, not you. Yet they report to you, or to your CFO. You control their pay and rations, and you mark their homework in their annual performance reviews. Isn’t he right that there is an “inherent tension” here? If he is, shouldn’t that bother you?

He goes on to say:

“… those in-house advisers who are professionally qualified would typically prefer to maintain their professional independence, ethics and standards and not bow to any organisational or commercial pressures to modify their advice to make it more palatable to their internal clients. In these circumstances, it is arguable that those with professional obligations might benefit from further regulatory support… In principle, they should not be at risk of dismissal or disadvantage simply for observing their professional obligations….”

Is your in-house lawyer “at risk of dismissal or disadvantage”? Then think about his next statement:

“Further, effective corporate governance should ensure that in-house lawyers are able to function effectively and are supported in doing so….This might entail express conditions in their employment contract, and a direct reporting line to the Board (or to the chairman or a senior independent non-executive director)…”

Can you imagine that? Your in-house counsel not reporting to you and with different a contract to everyone else? How does that suggestion make you feel?

He goes on to say:

“..we should not presume that “corporate governance alone is sufficient to address the public interest – there will be times when general counsel need recourse beyond their board, to their regulator (e.g. when the concerns derive from, or are perpetuated by, behaviour at board level)”….[and]…since the officers are not the lawyers’ clients, we would expect lawyers to take steps to protect the company, which has no legitimate interest in violating the law or in becoming the victim of management illegality. But lawyers will be reluctant to antagonize corporate officers because their jobs, assignments, or retentions depend on their good will. Yet their duty is to protect their client….”

Can you see how some high and indeed low profile corporate collapses may have been avoided and may be avoided if a regulatory environment existed where it was easier for in-house lawyers to have “recourse beyond the board”? Maybe the collapse of your business could be thus avoided.

Professor Mayson goes on to say:

“… These are not just private or commercial matters, and we cannot afford to assume that effective corporate governance always exists and is always effective. Constant vigilance, and robust independent advice from in-house lawyers, is required….For a discussion about best practice, see Moorhead et al. (2019). “a tension is inherent in this relationship when the client for legal services is also the adviser’s employer”…As we have seen in recent years, corporate failures can lead to consumer and societal detriment. In-house lawyers have to be able to sound alarm bells without the chilling effect of potential reprisal. The public interest in effective and fearless legal representation is engaged in much the same way as it is in private practice….”

Note the words: “chilling effect of potential reprisal”. Are these words not chilling? Is it not shocking that the public interest, which lawyers are required to protect, is potentially not being protected in your organisation?

Section 4.12 goes on to explore how a separate legal business unit might operate. So what should you, your board or management team do about this Report, if anything?

Option 1: Don’t wait for any change in the law; voluntarily implement at least “the separate unit” aspect of Recommendation 20 as soon as possible because it makes sense for your organisation and for society for the reasons set out in the Report and especially at a time of pandemic and then actively promote the entire Recommendation to lawmakers.

Option 2: Ignore the Report until you have to deal with it when or if the law changes by which stage the more robust aspects of the Recommendation may well have been watered down by those who prefer the status quo. 

Option 3. Actively protect the status-quo and lobby hard against Recommendation 20. 

I’m sure there are other options and to that end and to discuss Section 12.4 in detail I am hosting a Webinar on September 17th. 2020 – details here: https://www.eventbrite.com/o/ciaran-fenton-8237635611

Professor Mayson has kindly agreed to be the principal speaker on the webinar and he will be joined by panellists and attendees drawn from the C-Suite, law departments and law firms.  

Meanwhile, I encourage you to think the unthinkable and choose Option 1 now. Why?

Because if the Legal Services Act is as dated as stated and if the context in which your in-house lawyers operate is as dysfunctional as this Report asserts then you should be afraid. Very afraid because it means that a system that is meant to protect your business and society doesn’t. And if you care only for your business’ profitability only in the short-term, you will find that COVID-19 has created an environment in which you will be out of step with the public mood in short order.

If you do decide to voluntarly implement the “separate busieness unit” aspect of Recommendation 20 now, I suggest you sit down with your in-house lawyers and their favourite our-of-house lawyers and together create a new target operating model for your law department. 

Over several years I have piloted such units with in-house teams and have developed a framework which you can use here: https://ciaranfenton.wordpress.com/2020/03/22/in-house-tom-index/

But even if you decide to do nothing, decide to do nothing with full information and read the Report. Then, at least, you can justify your decision to do nothing, and you won’t fall into the compound ignorance trap of not knowing what you don’t know.

Ciarán Fenton

COVID-19 CEOs: Is your use of your “Leave Meeting” button causing “ZOOM cruelty” and damaging your business?

Feelings of shame, hurt and anger, to name just three, were merely business as usual (“BAU”) at and after pre-COVID meetings at which people were physically present.

When I had a “proper job” in corporate life, I recall leaving meeting rooms and boardrooms in one of three moods:

  • Red-faced with shame: “And unlike Joe Bloggs, whose results were stunning, Ciaran’s department’s revenues were very disappointing indeed last month”. The D-Word used with devastating effect.
  • Beaming with pride: “And of course if only everyone in the business took a leaf out of Ciaran’s innovation book…” No turn left unstoned.
  • Rigid with boredom: “Ok, listen up everyone – my 30-slide deck on next year’s strategy is inspiring…” KMN.

But at least “back in the day” when a meeting ended, it didn’t stop. There was the ritual of the gathering of papers enabling football/opera/soap-opera conversations [delete as appropriate], snatched conversations with allies, snarls at enemies and, outside in the corridor/cafeteria/pub [or all three], an opportunity for fevered gossip:

  • “You got a right kicking there, didn’t you mate, LOL [or the nineties equivalent of LOL]…”
  • “Whose teacher’s pet this month…”
  • “I’m sure I must have zoned out at Side 3…”

The spectrum of boardroom and meeting-room behaviour was broad, from the Kafkaesque – see Chapter 12, The Fear Culture in Shredded on RBS by Ian Fraser – to the most benign and holistic – see Maverick! By Ricardo Semler.

But now at a time of “back to back of Zoom meetings,” everything has changed, utterly. The spectrum has morphed into something we don’t yet fully understand.

Academics and researchers are on to it. You will find a rich list of articles, many of them on “fatigue” if you Google “the psychological impact of video meetings during COVID-19”.  

But I know from my work that people feel upset, depressed, angry, confused, misunderstood, ashamed, and bullied after they press “Leave”.

And they are alone with their feelings at a time of global pandemic, with existential fear now part of “BAU”.

CEOs can’t afford to ignore this new reality from a human perspective and from a business perspective. Not that remote working is new. It’s that remote working by everyone at a time of pandemic is new. And ignorance of your unintended cruelty is not good enough. If you are a CEO, high emotional intelligence is no longer optional. At least if you want to survive a pandemic, it isn’t.

While we wait for the outcome of this research, I offer three simple steps CEOs can take to minimise the risks to their colleagues, employees and customers of “Zoom Cruelty”, intended or not:

Step 1: Leave five minutes at the end of each meeting for feedback.

Step 2: Give permission to all at the start of the meeting that no one should leave the meeting with “an itch unscratched”.

Step 3: Set up parallel systems for 1-1 feedback.

I facilitate 1-1, one to few and one to many Zoom meetings daily. Also, I have started to replicate, in part at least, “off-sites” for which demand remains strong.

While I can’t replicate the country house hotel experience on Zoom I can spread the “off-site’ over several 90-minute video sessions over many weeks and with heavy use of parallel systems: 1-1 email, What’s App and Slido, for example, for polling.

You can’t over-communicate with people working remotely from each other.

So, next time to you are about to press your “Leave Meeting” button, pause and be kind.

Ciarán Fenton

CEOs: a 7-step COVID-19 business re-launch plan

Last week I worked with a CEO who leads a rapid growth multi-site retail business trying to figure out how to “re-launch” after his employees come back “from furlough”. If you are in a similar situation, I propose:

7-step COVID-19 business plan process

Step 1: Bin all previous plans

Don’t be tempted to re-forecast the current financial year’s P&L in the light of COVID-19 using your pre-COVID business plan’s revenue and cost budget. They’re out of date. Everything has changed.

Step 2: Draft a new PSB Statement

Start with a “clean page” and write a “brand new” PSB Statement: by which I mean your reframed business purpose (P), strategy (S) and behaviour plan (B) in the light of COVID-19.

Step 3: Develop a new target operating model (TOM) from “scratch”

A target operating model consists of at least three elements: market needs, strategic resources and processes to meet that need.

Step 4: Draft a zero-based revenue and cost budget

Don’t refer to the previous budget but build a line by line new budget as if a start-up.

Step 5: Circulate the new PSB, TOM and Budget

Gather as much feedback as possible

Step 6: Appoint a Devil’s Advocate

They must have permission to challenge everything.

Step 7: Sign it off

If you have a board, have a formal vote. There should be no hiding place nor should you drive the plan through on the nod.

Developing a COVID-19 PSB Statement

A COVID-19 PSB Statement answers three questions:

First, how will your business purpose (P) change in the light of the pandemic?

You may say that your business purpose hasn’t changed at all. You may say that your purpose remains exactly the same: maximising return for shareholders.

But that assumes that your customers, employees and society are content that your mandate to trade remains the same as before when there’s a strong possibility that it won’t. The environment, society and governance (ESG) movement which was well underway before the virus will, I suspect, resurge if perhaps after an initial falling off in “ethical” investing. Even if you feel that ESG will lose favour in the face of the harsh realities of a recession, you should have the courage to include that prediction in your PSB Statement and be judged on it.

In the case of my CEO client, his business, as it happens, is likely to benefit from increased customer need for his services because of the pandemic but he will have to be very careful indeed how his market proposition articulates that benefit. Any hint of exploitation could be very damaging to his brand.

So we worked together on what language to use to reframe his organisation’s purpose, how that change would feed into his marketing plan; how he would have to change his leadership behaviour in articulating that purpose to customers and all stakeholders, particularly in interviews, blogs and on social media.

Second, how will your business strategy (S) change in the light of your reframed purpose?

If your business purpose changes, even a little, your strategy to achieve that purpose must change at least a little.

In the case of my client, we are exploring a new strategy which focuses on contributing to customers recovery from lockdown.

Third, how will your business behaviour plan (B) change in the light of your new strategy?

This refers to the broad behavioural expectations on everyone in the organisation in implementing the new strategy to achieve the reframed purpose.

In practice, this involves throwing your pre-COVID-19 business plan and operating model in the bin and developing a new COVID Target Operating Model or TOM.

Developing a new COVID Target Operating Model “TOM”

So, three questions:

First, how will your market need change in the light of the pandemic?

  • In my client’s case, his customers’ need for his service will potentially increase, but how and where they want to experience it will change.

Second, how will your strategic resources change?

  • In my client’s case, these consist of people, sites and kit all of which may need to change for one reason or another. He may need to add new resources or substitute resources because of these changes.

Third, how will your strategic processes change?

  • In my client’s case, the main change is likely to be home delivery of the service and significant change in the sales and marketing processes.

When you have drafted your new PSB and TOM statements and zero-based budget circulate these widely and get feedback on them.

Before your board signs off the new budget and operating plan appoint a Devil’s Advocate with explicit permission to pick holes in the plan and don’t sign it off before it passes the Devil’s Advocate’s test.

For the avoidance of doubt, as lawyers like to say, you can’t be the Devil’s Advocate.

Ciarán Fenton