How to turnaround an unhappy board of directors in three steps

With apologies to Tolstoy, all happy boards are alike; each unhappy board is unhappy in its own way.

Unhappy boards consist of unhappy directors. This is obvious. But since people speak of boards as if they are people – anthropomorphism, to give this behaviour its technical term – they need reminding that they’re not. It’s the directors who are unhappy, not the board.

Happy boards outperform unhappy boards because unhappy, stressed and frustrated directors don’t perform as well as those who are content, energised and empowered.

The reasons for unhappiness will vary from director to director. But directors share one systemic grievance, also shared by their workforce, which is that work in the 21st Century is often not very fulfilling, at all. The happiness at work surveys, which make for grim reading, bear out this assertion.

If directors can address the systemic issues between themselves on the board, can you imagine what they can do for the rest of their workforce?

I believe the world of work can be fulfilling. Not 100% of the time of course, but I believe in the 75% rule that three-quarters of the time you should be able to say: I’m happy at work. But the world of work is still not what it could be especially for those who sit on boards.

We have only ourselves to blame. In the 20th century we permitted a framework for work to develop which created three components that ensured people became and continue to be trapped on a treadmill:

  • The maximisation of shareholder return as a primary purpose
  • Human capital management designed to serve that purpose
  • Exploitation of human and other resources as the main focus of boards

But the movement towards a new model has been building for some time. Everyone knows that the shareholder framework is no longer fit for purpose but have struggled to break its grip.

As far back as 1994 Charles Handy published The Empty Raincoat to set out a “…philosophy beyond the impersonal mechanics of business organisations…if economic progress means that we become anonymous cogs in some great machine, then progress is an empty promise”.

Even mainstream human capital writers like Jon Ingham were trying to humanise thinking in the early part of this Century in his book Strategic Human Capital Management – Creating Value through People, recognising that value can’t be created through any other means.

In what has been considered a “ground-breaking book”, Frederic Laloux’s Reinventing Organisations (2014) set out a thesis that “a new shift in consciousness” is underway which could help us invent “a more soulful and purposeful” way to run our businesses.

He sets out what he calls a “Teal” approach to this new way. This includes self-management rather than cumbersome management structures, bringing the whole person to work and what he calls ‘evolutionary purpose” focusing on what society wants from the business and not on the bottom line.

These are just three of many writers addressing these issues. Their work has been augmented by the growth of “not just profit” movements, which sprung up after the Global Financial Crash in 2008. These include Blueprint for Better Business (of which I am one of several advisers); B Corporations and Tomorrow’s Company.

Many of these use “top down” approaches that have strengths and weaknesses. My contribution to this canon is to take an individual rather than a corporate approach. I believe in individual change as an agent of, so called, organisational change, using the following steps:

First, while I agree with others that the purpose of organisations should be to make all stakeholders equally happy – shareholders/other risk takers, workers, suppliers, their families, their communities and future generations through the proper use of the physical environment involved in the business – I nevertheless believe that they will do so only if directors unilaterally grant themselves permission to do so.

The block so far is that directors are afraid of the investor. But if investors are educated to understand that they are not getting as good a return on investment without conceding to equal stakeholder happiness, then they are likely to give it. The first step, therefore, is to take responsibility for enlightening them.

Second, It has always struck me as odd that companies motivated – red in tooth and claw as it were – by profit, continue to allow their workers, especially their highly paid directors, to leave large chunks of their value at reception because boards have failed to create an environment which encourages them to bring their whole selves to work not just the part circumscribed by their job description or, more often, by the culture of the organisation.

The reason of course for this is linked with the first step, but also because they may not know how, precisely, to deal with the whole person. As one delegate quipped rhetorically at a people conference: “Do we really want people to bring their “whole selves” to work? Really?”

Third, is what I call the “paradox of small change” which is that small changes lead to big outcomes. Changing just ten interactions out of every hundred is just 10% change.

That’s small change. But it’s hard to do. You must start with yourself if you want others and your world of work to change; then you must accept that organisations don’t exist, except in law and in the minds of people who work in them, save that they are groups of individuals who are struggling to be who they should be.

If your board is unhappy and you’re serious about doing something about it, start by demanding equality of return for every stakeholder in the business; then find out what each director needs to be happy, 75% of the time and, finally, negotiate the behavioural small changes required to create an environment in which these are met. That’s it. Simple.

Three steps to unblocking road blocking behaviour on your board of directors

Last week The Times reported that the term “roadblock” was used to describe a surgeon at the centre of a shocking medical malpractice case in the north of England.

Colleagues, apparently, had to “work around” him and concerns about his behaviour were either ignored by him or buried by others. The case reminded me of how prevalent this story is in business.

Although the roadblock cases we all witness on boards may not be as devastating as that one, they can nevertheless cause grievous harm to people and businesses.

But what can you do? These are often bright, effective and key people in the business. They may be robust in their dealings with colleagues but charming with clients and, crucially, they deliver results.

Challenging them is difficult. They are powerful and don’t use, shall we say, Queensbury Rules during difficult exchanges. In short, they bully.

It’s not easy to tackle this problem but it’s not impossible. In fact the issue itself is simple: how to deal with bullying behaviour. The problem is in mustering the courage and enlisting support to deal with it. I use a three step approach in my programmes which I hope you find helpful.

Step 1: Ensure that each director, including the “roadblock”, has a shared, and agreed, understanding of the objectives and strategy of the business.

More often than not, I find there isn’t such a shared understanding save that everyone wants to make as much money as possible. That doesn’t count in my book. That’s like breathing. It goes without saying.

Ask each director to come up with a more sophisticated objective than making money and a strategy to achieve it. The outcome can be surprisingly positive, productive and unifying. At the very least it will clarify any misunderstandings.

It’s crucial to ensure that the “roadblock” signs up to the strategy too. Don’t move to the next step until they do. You may find that this process leads to some softening by the offending director. Or not.

Step 2: Check that there is unanimity amongst all the directors on the roadblock issue. Unless everyone is saying the same things, the problem could be something, or someone, else.

If there is unanimity then agree that everyone on the board not only has the right but also the duty to call out the behaviour on the next occasion it arises. Then, crucially, the person who does call out the bad behaviour must be backed by the others.

This is not about “ganging up” but an important step in reinforcing the agreed approach in dealing with the roadblock which is about always coming back to business strategy and objectives, not personality differences. This is good corporate governance, not corporate politics.

Step 3: Is to make a small change in how everyone deals with the roadblock at board meetings. The principle here is that the other person won’t change unless you change first. A commitment to small change in behaviour, over time, is easier to secure than so called “transformational” change which is a lesser spotted occurrence than some commentators would have us believe.

On the next occasion and at a fully attended board meeting – ideally an operating board meeting, not a main board meeting because procedures tend to be more formal there – when roadblocking behaviour occurs, then one director must muster the courage to enquire how that behaviour helps implement the strategy to achieve the agreed objective. I say “must”, intentionally.

The response is likely to be a strong, if not brutal, push back or to obfuscate or both. Each director should in turn ask the same question or otherwise indicate that they back the questioner. It’s as simple as that, even though it may not feel that simple.

Unless you have chosen the wrong battle to fight or someone lets you down in the room, this approach should work, over time. You will find that on each occasion the other party is challenged to explain the link between their behaviour and business strategy to which, after all they have signed up, they will struggle to maintain the roadblock behaviour in the face of such ongoing unity of purpose.

If their behaviour is unconscious they may even see the light. On the other hand, if they are successful narcissistic bullies they will try everything to bully their way out of the challenge.

If every director sticks to their guns and quietly and calmly return, each time they are rebuffed or traduced, to the agreed business purpose and strategy the other party will have to relent, ultimately.

And if they don’t then the directors have a choice: either to remove the roadblock or become part of it themselves. Sadly, too often the latter is the case but it doesn’t have to be so, if everyone has each other’s backs.

Why non-banking CEOs and boards should bother reading The Banking Standards Board second annual review

Last week The Banking Standards Board published its second annual review which received page two coverage in The Financial Times with the strange headline: “Bankers battle with ethics versus career quandary”.

The headline was strange not only because it implied that there are circumstances in which career considerations could trump ethics but also because, given that the 2008 crash resulted from unethical behaviour, these shocking results should have been the headline, not the quandary they seemed to present.

As reported by the FT, some of the results of the Review based on a survey of 28,000 employees at banks and building societies are jaw-dropping: “more than a third fear negative consequences of voicing concerns…one in eight had seen instances where unethical behaviour had been rewarded…[a large number saw] a conflict between their organisation’s values and how it did business”.

The impact of this environment on ethical decision-making must be grave, making another crash a certainty, if not highly possible. Certain because the results were not front page news; certain because we have become immune to such behaviour and, above all, certain because permission to behave well in banking is still not ubiquitous.

If the banks are heading towards another crash – so be it. But you and your board can avoid risks just as grim by giving your directors and their team’s permission to behave ethically. How can this be achieved?

You could start simply, by announcing that there will be zero tolerance on your board for the three behaviour examples below:

– the rewarding of unethical behaviour

– experiencing negative consequences for voicing concerns

– failing to confront conflict between our values and how we do business

The first of these might seem obvious, but if as much as one in eight has seen instances of such behaviour in the banking sector, the chances are that some of that behaviour is happening in your business and without challenge.

And this will persist if you do not support the second rule by encouraging people to speak the truth to the powerful. Of course, the best way to ensure an ethical culture is to create an environment in which people feel that they can speak up on normal issues i.e. those which have nothing to do with ethics or the law.

If your people feel comfortable challenging you on normal business issues, then they are more likely to feel comfortable calling you out on bad behaviour.

My guess is that those banks where people are afraid to voice concerns are also afraid to voice just about anything else which might not meet with approval from on high. Where this becomes seriously mad is when people start assuming what will and won’t be approved and are wrong. Then you have a truly sick organisation of your own making.

Emotionally intelligent boards can create emotionally intelligent businesses that are more likely to make ethical decisions which are right in themselves and also reduce risks and increase opportunities.

One way of creating emotionally intelligent businesses is to have zero tolerance for shaming language. Shame is a great mental killer in business, especially amongst men. Guilt means I’ve done something bad. Shame means I’m bad.

Over the years I’ve observed shaming language at its worst in many contexts. Once I worked in an organisation where the “D word” was the shaming weapon of choice at meetings, as in: “Joe Blogg’s quarterly results were very disappointing, indeed.”

This would be said as if Joe was not in the room. He was of course and would die a thousand deaths in that boardroom and had nowhere to go because of kids, mortgage and all of that.

Another example of shaming language is when a powerful person is reasonably challenged on a strategy or routine issue by a less powerful person as in: “Joe Bloggs, I think we need a bit more light than heat on this issue”. Withering.

Have you ever been that Joe Bloggs? I have. And I can tell you that there’s nothing more certain to discourage someone from voicing concerns about ethical or legal matters if they are shamed for voicing concerns about issues that are perfectly legal and ethical and, please, remember where you first heard about the next banking crash and its causes, if you read it here first.

Three reasons why #Boards should consider an informal behaviour review alongside their Board Effectiveness Review #governance

boardmeeting

Board Effectiveness Reviews are now commonplace. Their outputs are included in annual and other board reports.

But are they designed to assess underlying behaviour – good and bad? Will they flush out a tyrannical board member or a culture in which it’s difficult if not impossible to “call out” unacceptable behaviour? I doubt it.

There are three reasons why #Boards should consider an informal behaviour review alongside or after their standard effectiveness review.

First, a behaviour review will deliver a higher return on the investment in the Effectiveness Review process because it will address underlying behavioural cause, not just symptoms. Even a small change in behaviour is likely to lead to better commercial and sustainability outcomes.

Second, on a divided board – which is more common than often acknowledged – the effectiveness review is a good excuse to sort out damaging board conflict without further fuelling discord.

Third, behaviour reviews are not just about dealing with the bad behaviour but replicating the good. Since effective reviews are strongest in their highlighting of er, effectiveness, then a process which captures, replicates and enhances that behaviour must be good for the business.

Many boards carry out formal Effectiveness Reviews because they feel they must. A bit like CSR. Of course many do so for the right reasons but they are likely to be the least in need of remedial action.

So, hard-as-nails CEOs are unlikely to welcome any scrutiny of their behaviour which might suggest that they should change it. Unless of course – psychopath CEOs aside – they might welcome an excuse to do so, especially if they can see a link between their behavioural change and improved commercial and personal outcomes.

In my experience even those CEOs and NEDs who exhibit low EQ often secretly harbour a desire to improve it but don’t know how.

The process for an informal board behaviour review – note lower case and the importance of informality – is straightforward:

Step 1: one to one interviews by an external party with each board member. They would be invited to comment on the best and worst behaviour of each of their colleagues using real examples.

Step 2: a facilitated plenary session or sessions addressing organisational purpose, strategy and behaviour and how it fits, or not, with the personal purpose, strategy and behaviour of each of the members of the board.

Step 3: the facilitation, mediation and supported implementation of behavioural change agreements between board members as well as, gently, legislating for their breach.

For some readers the likelihood of their CEO agreeing to such a process might seem laughably remote. In which case the weakness of their formal Board Effectiveness Review is already exposed.

Ciaran Fenton

January 2017

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Want to talk leadership? Contact me through my website or call me on +44 (0) 207 754 0335

CEOs: top job but still feeling unfulfilled? Tis the season to reflect…

stressed-businessman

…on why, what can be done about it and how.

The level of human misery at the top of business and the professions is one of the best kept secrets of modern life.

The happiness statistics on those in the middle are well documented. Pressured from the top and bottom their stress levels are high for obvious reasons. Their distress comes as no surprise.

But surely CEOs, CFOs, function heads and top lawyers and accountants must be scoring high on the fulfilment scales? Surely, having worked hard (oh so hard) to get to the top all is tickety boo?

I haven’t seen any credible studies on this. I’m not sure they are possible. Having worked with scores at close quarters I feel that many are in denial, most are getting by and a few love what they do.

The good news is that their plight is remediable – at least for those not in denial. The deniers are in a tricky position. They’re stuck. They’ve got to start by unsticking themselves. Most will need help to begin that process.

Let’s say 20% are stuck, 10% feel truly fulfilled and 70% are getting by. To the latter I recommend the following steps to help them reflect.

Start by confronting all, not just some, of the negative feelings about your role and dig deep. For example: When “he”, “she” or “they” behave like abc, I feel xyz:  I wish my role encompassed X as well as/instead of y:  I feel constantly exhausted. Or is it something else?

I use an intangible income and expenditure account process with clients to help them pin down, precisely, what they want from work and what they’re getting and not getting.

They want intangible income ABC and are willing to expend effort DEF to achieve it – usually hard work and reasonable travel. But the income side varies considerably from leader to leader.

For some it’s about autonomy, for others it’s about teamwork or success. Whatever the requirements I find that the happiest are those who are in surplus about three quarters of the time. That’s as good as it gets.

About quarter of our work is mundane unless you’re lucky to make a living from your hobby. Sadly, a significant number of senior people are in deficit in intangible income. Certainly some feel they should be paid more money but it’s not the main driver of dissatisfaction. I find that it’s usually the intangibles that hurt the most.

The advantage of pinning down your intangible income and expenditure needs is that it forces you to address what you want from work and why you do what you do.

For some it will be the first time that they really address why they do what they do. For others they have completed this task, are happy that they’re in the right job but feel they are in the wrong role. For those who have not addressed their purpose it can come as a shock to find that they are driven by factors which originated in their formative years.

Some are still playing out the pressures put on them when they were young and haven’t come to terms with the fact that they are now adults and can do what they want to do. These dynamics are well documented in psychology and research into emotional intelligence.

Wherever you are on the continuum of clarity of purpose it’s important to realise that you have no hope of true fulfilment unless you figure out why you do what you do. Where are you now, why and where you should go to make the best use of your unique talent?

Clients are initially dismissive when I talk about their uniqueness. But when I help them to connect with the reality that they are unique there is usually a brief flicker of recognition quickly dimmed by the realisation of the chasm between that truth and the relentless experience of work which appears to respect nothing other than lowest common denominator.

I encourage them to work on protecting the flicker from extinction by connecting with what politicians call their “ism”. We’ve had Maoism, Thatcherism and Mayism. Why not you-ism? And for benign not malevolent purposes?

You-ism is about bringing your whole personality, backstory and dreams to your leadership. Sounds corny? If it does maybe you’re stuck. But all you have is your story. Once you are clear on this it’s surprising how easy it is to decide on your personal purpose, and thus your strategy and behaviour for achieving it.

Do that and you will be in grave danger of being fulfilled. Help those you lead to thrive and as a collateral benefit grow your business better than you would otherwise. Because your business is made up of you, them and your respective “isms”. Nothing more.

Ciaran Fenton

December 2016

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Want to talk leadership? Contact me through my LinkedIn profile or call me on +44 (0) 207 754 0335

Three reasons why #CEOs should change their behaviour, help others change theirs and, together, agree a shared purpose #smallchange

You want to be a successful leader. You know what that means to you. Delivering the biggest bottom line? Being the best? Changing the world? Whatever.

But do you know why? If you don’t, then you’re not driving. You’re being driven. You are marching to another’s drumbeat. So who’s the voice in your head, if not yours?

A real test of the extent to which you are being driven is to find out what others feel your main behavioural weakness at work is. They’ll tell you if you dare ask. A humorous way to do this is to ask them what they think you are least likely to say. Their answer will be a bull’s eye on your behavioural weakness.

Most CEOs I meet are, as one wit famously said, not entirely displeased with themselves. Most tend to be sure of themselves, at least on the outside. This confidence is part of the reason they’ve reached the top. Somehow they have developed a belief in themselves.

So why would I recommend that they spend time changing themselves? Why would I suggest that they risk failure if they don’t? Why, if they ain’t broke, do they need fixing? And why should they spend any time at all helping others to change?

The first reason is that all success is based on striving to be the best you can be. Since this is, by definition, an endless task, you simply cannot be the best you can be without constantly changing. And your business or organisation won’t, if you and your team don’t. They comprise the business.

The second reason is that the skills that got you to the top are not necessarily the ones that will help you make a success of it. Your self-confidence, intellect, sharp elbows or whatever combination of personal, intangible assets propelled you to the top has done its job. It’s time to stop striving and start leading.

The third reason is that because you may have natural self-confidence or whatever doesn’t mean that each member of your top team has those attributes in equal measure as you do. It follows therefore that, logically, your business can’t thrive unless your team thrives. You and they can’t do that without changing.

No, I hear some say in response this. Just hire the “right people” and let them get on with it. No need for all this woolly, soft and intangible stuff. “I didn’t get me where I am today…” as Reggie Perrin used to say. Indeed. But this is the 21st, Century, not the 19th and things are changing. These days, when the going gets tough, it’s the soft get going. By soft, I mean those with high EQ, not just IQ.

CEOs should be doing only three things: creating an environment in which people thrive; growing the business and keeping stakeholders happy. The best way to help someone succeed is to help them deal with their greatest fears.

But you can’t do this if you are not dealing with yours. But what if you feel fearless? What then? Well, you must remember that you’re in a tiny minority. If only you could do everything in the business, then it would soar because there’s nothing in your behaviour you feel you need to change. But you can’t because you need others. That’s the rub.

At best the behaviour you need to change is your tendency to forget that everyone isn’t like you. At worst, you keep your members awake at night partly because of your behaviour and partly because of what it triggers in them. The latter isn’t your fault, but you need to attend to it if you want them to be the best they can be.

So, throw away the organisational chart. It won’t help you except to remind everyone about power differentials. They don’t need reminding of those. But they need frequent reminding and reassurance that you are there to help them be the best at whatever they do in the service of your shared purpose.

Shared purpose is the most powerful driver of success and fulfillment. It differs from team to team because each team is unique because each member is unique. Their ability to perform depends on your willingness to change yourself. An inconvenient truth, I know. But it’s a truth nevertheless.

Ciaran Fenton

November 2016

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Want to talk leadership? Contact me through my LinkedIn profile or call me on +44 (0) 207 754 0335

Many CEOs and function leaders achieve much less than they could because they hate the process of selling…

sell-an-idea

..themselves, their ideas, or even products or services because they fear rejection, are uncomfortable asking for anything and don’t know how, exactly, to sell well. These feelings are as career damaging as they are remedial. Even the most taciturn can learn how to overcome this problem, which pervades all leadership contexts including the top three: leading during complex change including business development, job finding and surviving the first 100 days of a new role. I have case study examples of each.

The fear of rejection is deep-rooted. It is linked firmly to the second driver, which is a dislike of being and appearing needy. Experts tell us that this revulsion indicates a history of difficulty in negotiating needs in formative years. If you were able to negotiate and satisfy your reasonable needs at home and school, then you are likely to be able to do so in adulthood leading to a natural ability to sell well when the need arises. The opposite early years’ experience, however, is more common.

Much of my work is in helping clients deal with this hard-wired behaviour because they have no option but to sell; not just in the business development sense but also if they are leading during complex change – restructure, M&A, conflict, adverse trading conditions, first 100 days, earn out or even trying to win at interview for a new executive or NED role – they must succeed at selling themselves and their ideas to people.

One client had a life-long difficulty with selling although this was not immediately apparent. I stumbled on the extent of the problem when I did my selling module with them, the key points of which I can deliver in about an hour. He seemed quite grumpy at the end of the session, and there was an insinuation that I had rushed it. I picked this up and did a Feel/Need/Do process which I use to surface any dissatisfaction with my sessions. Sometimes these can be subliminal.

I managed to get him to say that “All my working life I have felt uncomfortable selling; I’ve done it because I’ve had to but I hate it, I FEEL I’m no good at it but increasingly I must do it, so I NEED to get better at it and what I’m going to DO is to ask you to spend much more time on this than just an hour.” So I did.

I created a tailored programme for him over several sessions, focusing on those steps in the selling process with which he had the most difficulty. For example, he had a block around finding out what a target needed or might need. He didn’t know how to ask questions which surfaced needs.

Once he understood that he could ask open biased questions – who? what? when? where? how? – i.e., opening questions and how these linked with the closing steps, he felt much more comfortable. He learned that good selling is about genuinely putting yourself in the shoes of the buyer. It’s not about smoke and mirrors. I suspect his background would not have been one where intrusiveness was encouraged, so he confused gentle questioning with an intrusion. The result was that he subsequently did a pitch with a colleague who was astonished at his change in selling behaviour. The success was his. I was delighted to provide the framework.

Ciaran Fenton

October 2016

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Want to talk leadership? Contact me through my LinkedIn profile or call me on +44 (0) 207 754 0335