This is the text of a talk I gave at a workshop that I hosted at the IOD, London on 29 November 2017. A video of the talk is available here: https://goo.gl/A5CFzr
Yes, this talk is about board effectiveness and, yes, I am a board effectiveness consultant and indeed there is great interest in board effectiveness – just Google it and see.
But over the last 15 years, during which time I have worked with scores of main and operating boards, executive committees and function leadership teams, I have never, but never heard a director or team member express the slightest interest in board effectiveness as their number one priority.
No. Only one common frustration comes up again and again and I wonder if that’s what you’re seeing too, and it’s this:
Why can’t everyone on this board do what I want?
But no one says this out loud because everyone pretends boards are about business needs and not their needs. That’s why management-speak twists adjectives into nouns.
So, rather than saying “we need everyone on our board to be effective directors” we use distancing language and speak of “board effectiveness” as if it were a subject to be studied and not behaviour to be embraced.
This denial of reality means that many if not most boards are crucibles of frustration, hotbeds of conflict and what could be achieved, doesn’t get achieved.
But what if your board acknowledged reality, said the unsayable and acted accordingly? What if there were a process to so this, safely?
And have you considered the cost of everyone around the board table pretending to care about “the business” as if it were in another room and not about themselves who are in the room?
The cost of this systemic duplicity is huge because we know that although directors talk about acting in the interests of “the business” they act, once they leave the room, consciously or not in their own interests.
But since these personal needs are rarely expressed or acknowledged it means that all the energy of the board that could be focused on a shared purpose, isn’t.
And that must mean that the business is not only wasting a lot of money it is also losing out on opportunities.
Every director understands the principle of opportunity costs to the business as an entity but do they realise that they, personally, are often responsible for the business missing out on exciting and worthwhile opportunities because they are leading a double life?
Their public persona, which the board sees, is the “revenue generating, cost reducing and shareholder enhancing director” – red in tooth and claw.
What the board does not see is the hidden reality: what the director feels deeply, needs deeply and desperately wants to do if they could.
I understand that you may feel that your board or executive committee is different but let me give you a sense of how I’ve seen this behaviour play out in organisations and perhaps it may resonate with your experience.
I’ve identified a range of behaviour, which I call “least likely to say behaviour”. You can try this out, at home as it were, with your own board.
Just go around the boardroom and see they if there’s consensus on what each of you is least likely to say.
For example, a micro-managing CEO is least likely to say: “Don’t mind me, just get on with it, all I need is the odd email”
Or the director who can never acknowledge a mistake: “Sorry!”
Or, that the bully is least likely to say “Please”
or the passive aggressive: “I disagree”
or the Pleaser “No!”
or the Narcissist “What about you?”
or those who feel that they must be the brightest in room: “I don’t know, what do you think?”
And, of course, we recognise ourselves in these too, do we not?
But how much better life would be in your organisation if the negative impact of these different types of behaviour were reduced if only by a small amount?
What costs could be saved, opportunities seized and how much more fulfilling and rewarding it would be to sit on a board that had found a way to deal with these seemly intractable personality issues and conflicting needs?
Surely the obvious way to do this is for each director to come to an agreement that not only acknowledges the particular mix of behaviour on your particular board but some sort of agreement to start to change it?
And pigs will fly, I hear you say. No chance. Not on your board. “There’s no way that Joe or Josephine Bloggs on my board will change, Full stop”.
And you will rightly add that no amount of so-called transformational change programmes will change the fact that Joe Bloggs is a thug.
But are you sure that things are that hopeless? How do you know Joe Bloggs isn’t for turning or at least for shifting a little?
Who would have thought that Nelson Mandela and F W DeKlerk would find a way to avoid a bloodbath in South Africa?
Who would have believed that Ian Paisley and Martin McGuinness would become friends?
Who sets the limits to our ability to do the unthinkable?
But, you might argue, these are extreme situations where grand gestures are easier to muster. Easy or not they did change, and you can change, and your board can change, and you won’t know by how much or how little until you try.
And although the changing is hard, the steps are simple and there are only three:
Step 1: Figure out your PSB: “My PSB”
Step 2: Figure our your shared PSB “Our PSB”
Step 3: How will you and your colleagues make small changes in your behaviour “My/Our small change?”
It stands for purpose, strategy and behaviour.
Purpose means why; strategy, how and behaviour relates to the actions to implement the how to achieve the why.
So starting with Step 1 – imagine if each board member was willing to articulate to the others what their personal purpose in life is? And how they hope to achieve it. And what behaviour they will employ. That’s their PSB.
But, you may say, even if they were willing to share such intimate matters they, or you, may not know their PSB.
You don’t say? Now there’s a surprise. You mean that the directors around a board table may not know, precisely, why they do what they do or how or where they are going, or the meaning of their lives? You’re kidding me.
But I agree they sure as hell are not going to share any personal information of this nature unless they have an incentive to do so.
But what greater incentive is there than more personally fulfilling and financially rewarding work?
That brings us to Step 2: “Our shared PSB”
When I challenge an organisation to identify their purpose other than making money, which goes without saying, they struggle.
Yet when they attend to the question “Why, other than to make money, does your organisation exist” they invariably find an answer which is about people and not money.
As in “Our purpose is to develop people to make/sell XYZ for the benefit of stakeholders which include shareholders, employees, customers, suppliers, the environment etc.
There isn’t a business on the planet that could not use that purpose statement. Ultimately all organisations could be about helping people thrive.
Indeed, ironically, if they did so, they would make far more money.
What if your board agreed on a “why statement” for your business. So what?
The “so what” is that the purpose of your business is wholly interdependent with the personal purposes of the directors who direct it.
Let me be crystal clear about this: your business does not exist except “at law” and except to the extent that a unique group of people in a room decides it exists.
There are seven billion people on the planet. Each one is unique. That means each person on your board is unique. That means your board is unique.
A different group of people means it’s a different business.
Hell, just change out one of the directors on a board, especially if they are the CEO, CFO or Chair and the entire dynamics change. Overnight. You know it. You’ve seen it. You’ve been it.
That means there’s no generic solution to board effectiveness. There is no generic solution to making your board more effective.
There is only a unique solution to improving the performance of your board and that is to address the unique combination of the least likely to say behaviour on your board.
And the only way to do that is if everyone shares their PSB no matter how shaky, and if everyone agreed on a shared PSB for the business i.e. “our PSB” and then if everyone agrees to change their least likely to say behaviour.
And what, you may reasonably ask would incentivise an obsessive micro-manager to change?
The answer is they would – and do because I have witnessed it – if they feel that they could make small changes over time and if the benefit of doing so outweighed the effort of the small change.
And by small change I mean changing only ten interactions in every hundred. That’s just 10% change.
So, if each board member shared their PSB or, more accurately, their struggle with their PSB, and if the board agreed a shared PSB focused on helping people thrive and then if each director agreed to change their least likely to say behaviour by just ten per cent your board would become immensely “more effective” although that does an injustice to the increased sense of personal fulfilment, financial reward and community well-being that would accrue.
And why would changing least likely to say behaviour by only ten per cent deliver in aggregate such big changes?
The answer is that it’s the same 10% that people leave at Reception because organisations can’t deal with the whole person although they may pay lip service to it.
Beneath the least likely to say behaviour is the secret sauce we all posses: our hidden potential.
And why would any organisation not want to get value from the whole person since they are paying for that whole person? They would like to but often don’t know how.
And in the 21st. Century those organisations that get this will thrive and those that don’t, won’t.
Thanks for listening.
A video of the talk is available here: https://goo.gl/A5CFzr