Why your board’s business strategy should include personal lives

life balance diagramCan 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.

Does Mrs May’s Cabinet decision-making processes reflect a wider malaise in UK corporate governance?

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“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.

 

Organisations don’t have DNA, people do

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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?”

What’s PSB?

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

Three leadership lessons CEOs can learn from Gordon Brown’s autobiography, My Life, Our Times

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If you are a CEO or an aspiring leader wishing to improve your leadership skills, you will not waste time reading the recently published autobiography, My Life, Our Times, by Gordon Brown, former United Kingdom Prime Minister and Chancellor, if only to learn what not to do as much as what to do.

I attended the book launch chaired by Jonathan Freedland, at Westminster Hall with mixed feelings. I had not warmed to him when he was a leader but I admired his conviction. I left with the reverse view: I liked him more and was surprised to find myself shocked by his values.

The audience was partisan and clapped throughout. I didn’t, but I did find myself laughing out loud at his stories, his mirth and surprisingly engaging manner. It’s a shame we didn’t see more of that when he was in power. This point links to the first of three lessons.

He writes that he couldn’t do “touchy-feely” politics and never mastered the ability “to sculpt my public image in 140 characters”. Initially I misinterpreted this as an expression of regret and wishfully thought the statement contained in it an implicit warning to other would-be leaders not to repeat this error.

But it becomes clear that he believed that “what mattered was not what I said about myself, but what our government could do for our country”. Taken at face value this suggests a humility that places government or the organisation above its leader.

But it did matter what he said about himself because people buy people first and need to see the spirit of their leaders revealed if they are to follow them. I’ve never liked the phrase “touchy-feely”. In two words it seems to diminish the courage it takes to be honest.

Once I facilitated a leadership conference, having won the pitch to do so against a competing facilitator, on the basis of my manifest belief in clarity of feelings only to find that on the first day of the conference the boss warned me off making the event too “touch-feely”.

I had sympathy with his fear but wished he had had the courage to overcome it. I ignored his warning and proceeded to “do” touch-feely anyway and he was very happy with the outcome.

What concerned me about Mr Brown’s view was that he wasn’t regretting his attitude but regretting the fact that it didn’t work. The lesson for you as a leader, whether you like it or not, is that clear and frequent communication about you, your values and plans are not optional.

The second lesson is around his views about what he did and didn’t know at the time of the decision to go to war in Iraq. “Beyond questions of financing” he writes, “The Treasury had little involvement”. He’s saying he wasn’t in “the room”. When he said this to Jonathan Freedland in the Q&A session I was so shocked I could no longer laugh at his jokes. Why wasn’t he in the room? Who stopped him? Why didn’t he force his way in?

This is unacceptable behaviour. The Chilcot Report rightly called out the “sofa style” governance errors of the Blair decision-making process. That Mr Brown wasn’t on the sofa was as much his abrogation of corporate governance as Mr Blair’s.

The third lesson is one that acknowledges Mr Brown’s clear sense of purpose on matters he cared about. He cared about the poor and acted on their behalf. His belief in the importance of a health service “free at the point of delivery” was laudably unshakable, if weak in execution.

And few would argue that his intellectual rigor in dealing with the financial crisis in 2009, probably, saved the world from financial meltdown.

The lesson here is to have clarity of purpose. He rightly received applause in the hall for this. That said these successes don’t compensate, for me, his failure to confront himself, as we all have to do.

David Hare, in his review of the book in The Guardian, finds this aspect of Mr Brown’s character “endearing”: “Brown has in abundance what the rest of us have to some degree – a haunting ignorance of our own place in the picture. The fact that, to judge by this book, he remains unaware of this failing makes it all the most affecting”.

I disagree. It’s not endearing. It’s shocking and dangerous. Lack of self-knowledge is as human as it is ubiquitous. But leaders need to work hard at confronting their worst behaviour because it conceals their greatest asset: unique hidden potential.

Had Mr Brown been supported in accessing his inner “touchy-feely-thing” (sic) he might have realised that vision, conviction and intellectual rigor are not enough to lead any endeavor, successfully. He would have connected with his and our vulnerability and found a way to communicate in his brilliant, funny and engaging style the plans which people could have executed, not just ideas to cheer. And, had he done so, wouldn’t we all now be safer?

Why boards should use HBR’s list of Best-Performing CEOs in the World 2017 with caution

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Harvard Business Review has recently published its annual Best-Performing CEOs in the World rankings.

Pablo Isla, Martin Sorrell and Jensen Huang are in first, second and third place respectively. Sean Boyd, Jean-Laurent Bonnafé and Ian Cook are placed 98th, 99th, and 100th.

Does this mean that your board should favour the first three over the last three as benchmarks for your CEO? The rankings suggest that you should. I disagree.

HBR has ranked CEOs using a weighting system, which favours financial performance over the other factors using an 80/20 ratio. “To calculate the final ranking, we combined the overall financial ranking (weighted at 80%) and the two ESG rankings (weighted at 10% each), omitting CEOs who left office before June 30, 2017”.

By two ESG rankings, they mean environmental, social and governance analytics as reflected in two scores: Sustainanalytics and CSRHUB. Directors who are shareholder-value merchants, red in tooth and claw, might wince at the inclusion of such wet factors. I argue the opposite: the weighting for the ESG factors is not high enough.

For example, Pablo Isla, CEO of Inditex, headquartered in Spain, is in first place while Ian Cook, CEO of USA based consumer goods company Colgate-Palmolive is in 100th place.

Let’s look at their comparative rankings: Isla scored 18, 76 and 142 for FINANCIAL, Sustainanalytics and CSRHUB respectively, whereas Cook scored 186, 167 and 89.

These suggest that while Pablo Isla outperformed Ian Cook in FINANCIAL and Sustainanalytics scores, Cook outperformed Isla in CSRHUB scores significantly. So what?

Let’s look closer at the providers of the ESG scores: “Sustainanalytics is a leading provider of environmental, social and governance (ESG) research and analytics that works primarily with financial institutions and asset managers and with CSRHUB which collects, aggregates and normalizes ESG data from nine research firms and works mainly with companies that want to improve their own ESG performance”.

CSRHUB is obviously the “softer” of the two ESG scores. Why has it the same weighting as the other ESG score? Why is governance, a crucial internal board matter conflated with environmental and social matters, both external issues?

Who decided on the 70/10/10 ratio? Why not 60/10/20? Or why not split out governance and give it a score of its own? Surely any board would link good corporate governance with risk reduction and maximizing opportunities?

Would you not be a tad miffed if you were Paul Polman, CEO of Unilever, ranked 82nd with a 177/168/17 score? His CSRHUB ranking of 17 comes as no surprise. He is famous if not infamous for his focus on non-financial performance factors. It was he who refused to report to the market on a quarterly basis.

Should he not be further up the “performance” rankings? He is, by all accounts in the financial press, trying to balance performance with developing capability and with ensuring sustainability in all its forms. But did his financial score suffer because of his CSRHUB score?

And what are we to make of his Sustainanalytics ranking of 168 against Pablo Isla’s score of 76? On which environment, social or governance (ESG) factors did he underperform his betters in the rankings?

Isn’t it the case that these rankings should be taken with a large pinch of sodium chloride? Should HBR not use just one crude financial performance score and not attempt to take account of the ESG factors at all or look again at how it addresses non-financial performance?

I have sympathy with HBR’s dilemma. Society is increasingly vocal on behavioural matters. It’s right that HBR should reflect this. But their rankings will continue to be flawed unless and until boards catch up with society and incentivise their people on behaviour as much as performance. This shift would be reflected in the rankings since these merely mirror back what boards value. What’s measured gets delivered.

In work I do with boards, I find that those whose financial performance is strong, often suffer from hubris. Perhaps HBR should include a hubris score in their next rankings. It would be useful, if not amusing, to see what that would do to the current list.

 

 

Confronting bullying on boards: how to get your colleagues to back you

boss and employee.

According to a recent Sunday Telegraph report, The Royal College of Surgeons in Edinburgh (RCSE) says there is an “endemic culture of bullying” in the medical profession. Research by the College found that one in six trainee surgeons are suffering “from battlefield-type Post Traumatic Stress Disorder”. Fear “was forcing junior surgeons to cut corners”.

Boards, executive committee and function team members are no less susceptible to bullying behaviour.

Much of this behaviour in business results in a conspiracy of silence, even amongst businesses with in-house lawyers. For these General Counsel, their status as Officers of the Court does not prevent them from being subjected “to elevated ethical pressure”, as reported in a 2016 survey of 400 in-house lawyers by University College London.

The dire consequences of the abuse of power in all facets of life have recently come to light – in television, film, churches, sport, medicine, schools etc. – and their impact should prompt boards to act. But they don’t, because the people affected don’t come together to demand action.

If all trainee surgeons supported each other and refused to be cowed, as a group, the senior surgeons who bully them would quickly find that they can’t do their jobs without them.

In-house lawyers, bullied into silence by their corporate bosses, could form a tighter bond with each other and face down their oppressors.

Board members frequently humiliated – often by powerful CEOs, CFOs or Chairs – could stand up for each other at Board and ExCo meetings.

When I say this to clients, I’m told: “It’s easier said than done”. Indeed it is. It requires courage. Mustering courage is hard. But there are some small changes you can make in your behaviour, which can help.

First, improve your influencing skills with those whose minds and behaviour you are trying to change. In this regard, Professor Richard Thaler recommends persistence; knowing precisely the other’s point of view; having all of the facts; and that you try to intrigue the other party.

By this, according to Tim Harford in the Financial Times, “Prof Thaler realised that most of us are lazy. Most of us don’t want to think hard about our beliefs, or challenges to them. His solution was to make sure those challenges were simply too intriguing to ignore”.

One of my clients was a member of an ExCo, whose CEO was bright but had a short attention span. He was also given to the occasional ritual humiliation of his directors. My client noticed that those ExCo members who piqued his interest with ideas were the least humiliated and the most successful in pitching their proposals to him.

Second, find common cause with your fellows. When I ask clients – business leaders, lawyers or other professionals – why they don’t get together and confront bad behaviour, the answer I receive is that they are often too much in competition with each other to co-operate. But what if you and your colleagues realised the incentive in doing so?

Once I facilitated peace between two warring private practice lawyers on a partnership board. It turned out that, once they realised that they could help each other on their revenue targets, they could make common cause on issues at partner board meetings on which they had never previously co-operated.

Third, and perhaps the most straightforward change to make in your behaviour is to reframe your purpose, strategy and behaviour plan – if you have one – so that you have zero tolerance for being bullied or, indeed, bullying. By this I mean you make this behaviour as non-negotiable as you do with other behaviour decisions such as never behaving in a racist manner.

The respect you extend to others should be extended to yourself. You deserve not to be bullied as a matter of principle. If your purpose excludes living in fear, as it should, then your strategy and behaviour plan should support that objective. You might be surprised to find that your colleagues are more ready than you think to support you. Why not ask them?

7 Small Changes to Achieve Better Board Effectiveness, Conduct & Leadership

ChangeThese are the seven steps I use to facilitate better board effectiveness, conduct and leadership on main and operating boards, executive committees and senior function teams:

Step 1: Acknowledge uniqueness

You and your colleagues are unique individuals. No two board members are the same. If you behave as if they are you cannot expect to get the outcomes you want. If each board member is unique it follows that your board is unique. Why would you use generic processes for a unique situation?

Step 2: Understand uniqueness

At work, the components of your, and each of your colleagues’ uniqueness are their skills and experience, reputation and emotional intelligence. Whilst many share aspects of these, no two board members share the precise mix. Why, therefore, would you treat yourself and your colleagues as human capital assets?

Step 3: Understand emotional intelligence (EI)

The most important components of emotional intelligence are empathy, self-awareness and the ability to negotiate needs productively. All three are important. While organisations may perform well for a while without these in harmony in each director, research suggests that organisations that fail to foster these, often struggle to develop long-term capability. In which case, why would your board ignore individual EI problems, even if those colleagues with issues are delivering good results in the short-term?

Step 4: Understand the negotiation of needs

Experts tell us that if your ability to negotiate your needs productively and safely was frustrated in your formative years then you will have taken a decision to deal with that frustration in a manner that was appropriate at that time. However they also tell us that humans have a tendency to extend formative years decisions into adult life. Even those people who experienced little or no frustration in having their needs reasonably met in their formative years suffer when they encounter those that did or when they experience significant stress in later life. The productive negotiation of needs as between members of boards and teams is key to success. Why would your board not pay attention to creating an environment in which members’ needs can be negotiated productively, even if this involves painful confrontation of personal issues?

Step 5: Reveal hidden potential through small changes

Experts also tell us that no one escapes emotional pain. Everyone carries one outstanding emotional painful experience. By outstanding I mean more than all other painful experiences. We compensate for these in different ways but these strategies invariably hide our potential. If this is true, it means that your board’s hidden potential is more than the sum of the hidden potential of you and each of your colleagues. The route to revealing the hidden potential of each director is for each to negotiate small changes in behaviour with each other. In aggregate the sum of the small changes is greater that each in terms of their impact on board effectiveness and conduct. Conduct is observed behaviour over time. Why would your board not seek to reveal the hidden potential of each member over time?

Step 6: Share your personal purpose, strategy and behaviour plan

You and your board colleagues each have, or should have, a personal purpose or objective at work, a strategy to achieve it and a personal behaviour plan to implement that strategy. Some do this process intuitively; others plan it whilst others drift. The more these issues are shared openly between board members, the more likely it is that business purpose, and strategy and behaviour will be successful.

 Step 7: Make personal and business purpose interdependent

The tension between the personal purpose of each of your board members and the purpose of the business negatively impacts performance and the development of long-term capability. It follows that these are interdependent and if so it further follows that it is worthwhile paying attention to the interdependence of personal and organisational purpose. It also follows that not doing so increases organisational risk and reduces opportunities.

I use three well-known emotional intelligence tools to help directors implement these steps:

Tool 1: Feel/Need/Do?

Regarding specific issues or behaviour or exchanges at board meetings what do you feel?; what do you need in relation to that feeling?; what are you going to do to meet that need?

Tool 2: Are you selling or buying?

In almost every board interaction you are either selling or buying. Know which and know how.

Tool 3: Are you in Parent, Adult or Child mode?

In almost every boardroom interaction you and your colleagues will, at various times, be in Parent, Adult or Child mode. Do you know which you frequently occupy and when? Do you know how to get yourself and your colleagues into Adult-Adult mode?

The steps and tools above together constitute The Fenton Model® which is a registered trademark of Ciarán Fenton Limited.

Ciarán Fenton

October 2017