Waking up the Board | Orange Paper

Waking up the Board

WAKING UP THE BOARD

The first crowd-sourced orange-paper from S&S

Authored by Ken Towning & Adrian Stalham Ken Towning & Adrian Stalham

Waking up the Board

INTRODUCTION Executive Board (ExCo), Senior Leadership Team (SLT) or Management Board (MB). The company ‘Boards’ are known by many titles, but they all have the same responsibility running and managing an organisation. They are integral to directing a business, making sure it is achieving its strategic goals, whilst also championing its people to be aligned on the journey too.

Like any high-performing unit, the Board is at its best when it operates as a ‘team.’ This means that the challenges the Board face are no different from that of any other team - goals, dynamics and performance. Except with one crucial difference, the stakes are higher.

These stakes typically involve stakeholders, such as private owners, multiple shareholders or other business investors. Much of the Board member mindset is conditioned to predict, reflect and respond to the needs of these stakeholders usually in the form of revenue, growth and returns.

So what…?

As a leader yourself, as either a member of a Board, a non-executive or even reporting into one, you almost certainly have stumbled across challenges including: z The ‘Simon Says’ boss; someone who knows all the answers and just requires teams to deliver to their view of the world. Typically, these individuals are closed to outside suggestions, even in adversity due to their own extensive ‘experience’ or ‘ego’ z The market or a key competitor moving to offer different propositions z Business and operating models not being reviewed or revisited in the digital age z Inertia; hierarchy and bureaucracy hampering progress One of the most significant, which is rarely spoken about, is the Board not listening as they focus on short-term gains for stakeholders.

Wanting to visit this almost unchartered territory, S&S invited some of the best and most experienced brains to an event at its HQ, to unpick and share insights on how to tackle decisions, behaviours and priorities and even non-executives in the boardroom.

From this ‘power of the crowd’ session, five key themes (on the right) were uncovered to deal with a stubborn, oblivious or stagnant Board.

This orange-paper will delve into these themes, unlocking the techniques, tactics and best approaches.

Ken Towning and Adrian Stalham Sullivan & Stanley (S&S)

Ken Towning & Adrian Stalham

Waking up the Board

1. Context 2. Language 3. Human dynamics 4. Influencers 5. Approach

Ken Towning & Adrian Stalham

Waking up the Board

CONTEXT Understanding the wider challenges facing a Board will allow you to place your interactions correctly Understanding the challenges In many organisations, the Board is dealing with any number of non-public challenges from merger and acquisitions, separation, disintermediation and diversification to consolidation and even external forces such as Brexit. So, when preparing for the Board, it’s important to be mindful of these possible hidden agendas.

In the first instance, you may need to go right to the source, seeking advice from an individual Board member or non-executive to understand some of the current challenges. By having clearer knowledge around the context, you can consider the most important factors at play and tailor your approach. In response, this will give you more weight to what you say in the Boardroom.

How is the Board measured?

Context can include non-public tangible elements impacting the company. Boards preparing for an exit or merger may be concentrating on asset building for example, something they would not be overt with. Yet it may be driving priorities.

It’s important to get to the source of what they are being asked to deliver, so you know whether you’re supporting or challenging them.

Negative outcomes As we break down ‘context’ further, we can see how it can also be a breeding ground for undesirable traits. The most significant of which is the inability to keep momentum, also known as inertia.

The source of inertia is almost always ambiguity, which can come in many forms from goals, objectives and outcomes to priorities, personalities, capabilities, funding and accountabilities.

If you don’t get to the root of the ambiguity, by looking into the context around what could be driving it, it will be another hindrance to preventing the best actions.

This is why it is vital to get back to the source of the challenge, instead of just dealing with the symptoms. By aligning the Board on how to solve the ambiguity with a clear understanding of context, you can quickly overcome inertia.

Another source of inertia can come from different parts of a business operating at different speeds. This leads to inaction to get things done based on a belief that one party dictates or cannot change their pace. By opening the conversation with the Board, as they may be unaware, can help them agree on the constraints and how to overcome them.

Ken Towning & Adrian Stalham

Waking up the Board

Is there misalignment?

Another context dynamic to look for is that the Board itself may be dysfunctional or misaligned as described in the book by Patrick Lencioni: Five Dysfunctions of a Team.

Ideally, you should understand if any of these dysfunctions exist, but you may not necessarily be able to solve this issue. Instead, you can approach individuals and appeal to them with something that resonates. For example, where there is an absence of trust you can be the intermediary that brings about a joint view despite that lack of trust. The Board dysfunctions themselves can only be solved by self-analysing and correcting as a united Board.

Is the Board working from the truth?

From experiences in the expert session, it was revealed that in many cases, the Board was reacting or acting against inaccurate information or views. Misleading PMO reports was cited as a key reason for misalignment, where PMO and project colleagues would understate status to prevent being hauled in front of a governing board. Another reason was an over dominant Board member presenting a picture that would not be questioned by the others, leading to a united but incorrect direction.

This is why the context is vital, some of which may be externally sourced. Always make sure you understand the information the Board has as a basis for leading conversations on change.

Changing priorities can be really difficult to influence but there are other ways of increasing the profile of an issue or opportunity as described below.

Inattention to Results

Avoidance of Accountability

Lack of Commitment

Fear of Conflict

Absence of Trust

Patrick Lencioni: Five Dysfunctions of a Team

A quote from the discussion by Adrian Wakefield, Transformation Director; “Instead

of challenging the number one priority of creating shareholder value, how about asking the Board what is their second most important objective and use this to steer the conversation and help wake up the Board to other very important challenges or opportunities”.

Ken Towning & Adrian Stalham

Waking up the Board

LANGUAGE Change is hard in itself. But talking about the change in an articulate, frequent, consistent and respectful way adds another layer of complexity. This is why using the right language is key.

What are you saying?

Too often we communicate with phrases, words and sometimes jargon, only specific to the change. This means we can end up unintentionally alienating the Board, through a lack of understanding or even miscommunication. So, what’s the solution?

Do you simplify the language, removing technical phrases or words? This approach means full inclusion across the Board, rather than just the CIO understanding the IT-specific change.

Or, do you spend time educating the board on the most important words and phrases? This allows everyone to reach a common ground and feel wholly part of the process.

The sole mission of either approach is to help the Board clearly understand the change initiative you’re working on. The outcome will be a Board that will not only champion the change but can also effectively cascade the right messages.

But why is this so important? Unclear communication causes two enemies of change ambiguity and misinterpretation. When this festers, it can create a misalignment between the goals of the Board and that of the people within the organisation. The result - employees not getting behind the change. So, it is in the Boards interest to be as clear and transparent consistently throughout, to make sure everyone understands and feels part of the journey.

How do you deliver it?

Now we understand the full impact of how we communicate, it’s time to break down how we deliver it. This applies as much to a Board as it does to colleagues, as the tone of voice and words used is critical to how the message is perceived.

Appearing open, transparent and collaborative in your language with words such as we, us and colleagues is more likely to draw someone in to listen while being negative, separate and secretive saying I, them or you will push them away.

Another great quote from the discussion:

“Babies find change the easiest and even they go through it kicking and screaming!”

Ken Towning & Adrian Stalham

Waking up the Board

Ken Towning & Adrian Stalham

Waking up the Board

HUMAN DYNAMICS As people dealing with Board members, which is often a group of people who don’t act as a high performing team, you need to understand humans and how they work. Like a closet psychologist if you will.

Ask the right questions Human dynamics in the context of a boss with learning/survival anxiety otherwise known as the Simon Says boss; a boss who already has the answers to problems and just requires others to execute. Often a boss of this kind will not take onboard ideas or initiatives from others unless you can engineer it as their idea.

This engineering process often takes patience and a truckload of emotional intelligence (EQ as opposed to IQ). The key being to ask a subtle couple of innocuous questions about them, soften the ego a bit, and assess their mood. See framing a solution in the ‘Approach’ section for more detail below.

Where are you positioned?

It’s very useful to think about the human dynamics in the room. Who is sitting where? How can you position yourself to get a different effect?

The term “right-hand person” is derived from a reality effect where most people will listen more convincingly to people on their right-hand side. So when attending a session, try to engineer that position to the decision-maker.

Ken Towning & Adrian Stalham

Waking up the Board

Additionally, it works in reverse. Trusted relationships have seen the decision-maker wanting to subconsciously sit that person on their right-hand side, which reinforces its authority.

The head of the table is also a power position. If it’s expected to be a confrontational session, it’s better to go for this seating. Besides, it’s a great position for seeing all the faces and ensuring eye contact. Try to never sit in the ‘bus queue’ along the side of a long table.

Keep everyone’s attention It’s been proven that people are much better at making bold decisions in the morning, especially after eating. An example of this is eight Israeli parole judges whose cases over a 10 months revealed some shocking statistics.

The chances of being paroled just after breakfast were 65%, while the chances of parole just before lunch fell to 0%. It was apparent that the judges simply did not make the same types of decisions when they were hungry.

No-one had ever looked at these human tendencies before. While we may think that we are rational and professional, we are in fact not; we are predictably irrational. Time of day, drinks, snacks and breaks all gear the human interaction and attention. So make sure you always take this into consideration - a simple coffee and a snack, in the morning, may get you a much quicker solution!

Conversation killers come in all forms. From activity outside a window to allowing personal devices during meetings. This is why you need to allow breaks for devices and mindwandering to improve attention.

Is everyone engaged?

Ask questions, don’t just present and test the understanding in the room. Attempt to cocreate outcomes leaving all involved feeling they have been used as counsel, contributed and recognised. Ensure you have the all members, their roles and angles covered. Even go as far as to make sure everyone will actually be present for that day.

Non-verbal cues Finally, learn to read and respond to body language. It can be useful for understanding what people are really thinking or for gaining rapport.

There is a wealth of information on typical interactions - whether that’s a happy facial expression, rapid blinking due to distress, a clenched fist to show anger or simply hands on hips to show control.

Many body language experts and sources seem to agree that between 50-80% of all human communications are non-verbal. Are you tapped into this secret language of the Boardroom, (yes we said Boardroom) ?

Ken Towning & Adrian Stalham

Waking up the Board

INFLUENCERS Many people forget there are different allies and influencers within a business.

The right interactions, in the right situations, with the right people who can influence, can be a useful weapon in bringing people onboard and developing trust.

NEDs If you look at Non-Executive Directors or NEDs, for example, apart from often opening their own network and experience, their specific purpose is to be approachable and open-minded with the remit to challenge the status quo.

NEDs can be approached on or off-the-record, as they are carefully selected for their experience and discretion. So, if you have consulted a Board already and have not seen any change, it is sensible to approach a NED, provided that you cover the context, evidence and outcomes and not the activities.

Water-cooler conversations Similarly, never underestimate the power of corridor (or water-cooler) conversations. When Board members ask “how is it going?�, take the opportunity to reply with a question of your own to seek clarity, priority or awareness. Make them see that you have the best interests of the business and avoid talking about personal ambitions unless asked specifically. This will build a rapport and trust for the future.

When engaging in corridor conversations with Board members, it is important to get around as many as possible, preferably all. Creating a minimum of two allies is recommended before you present formally in a Boardroom. Not everyone may agree or understand so be very careful not to miss anyone out; no-one will like surprises in the Boardroom.

HR Directors HR Directors typically have a special relationship with CEOs and other Board members, which can be useful in helping with context, direction and any nerve hitting points to avoid.

The HR directors are aware of the dysfunctions and dynamics of personalities in the Boardroom and can offer useful tips on how to navigate them. Additionally, they will appreciate the steps you have taken to prepare.

Additional allies Many Board members also rely heavily on a number two, or their personal assistant. These roles are key influencers and great sounding boards for checking in with on how to approach a Board member or indeed, the entire Boardroom. Very often they are less guarded than you might think and will show empathy as well as provide advice. Invariably, a key route to waking up a Board is to percolate messages through the direct reports and personal assistants.

Ken Towning & Adrian Stalham

Waking up the Board

APPROACH The environment you create both physically and emotionally is imperative to how you approach conversations and sessions with the Board.

Choosing your time of day carefully, or thinking where certain people or even you should sit in the Boardroom, whilst offering snacks and drinks before starting are all good ideas. These may seem insignificant, but have a huge impact on the level of engagement received.

Take the lead Once the environment is right, you can then set the tone of the session for example “here is a starter for ten” or “we are looking for further input” or “we are sharing progress on.” Where ‘we’ implies a greater force than just yourself. Your ambition is to get one of two outcomes; that the Board believes they have either co-created the solution or direction with you or even created the solution or provided direction for you.

Know your audience Understand the Board, their characters, what is driving them personally and commercially. You may need to behave like a chameleon adapting to their styles.

If for example, you’re working for a ‘Simon Says’ Board member, ideally you need to frame a solution, but not actually talk about a specific solution. Give them the opportunity to fill in the blanks. Once this idea has been spouted, the Board member will take away and believe they were the source, so will back it wholeheartedly.

Subconsciously, they know you contributed and it ‘felt’ good with you there when they came up with the answer. That feeling won’t disappear, so you will be seen as a crucial and positive influence on developing the change.

Quote from the discussion:

“When we work in a crisis, we are at our best, so how do we make this moment feel like a crisis”

Ken Towning & Adrian Stalham

Waking up the Board

What is the best route to take?

There are several approaches that can work with a Board that will convince and then ensure support.

Phrases like; we made a good decision in the past which has paid dividends, now the business, market or world has moved on, we must change too.

Finding the common goal; what vision, outcome or objective will all Board members recognise and get behind. Can you relate their role, one by one to those aims?

Cascading the vision, purpose and goals is paramount. The same language consistently applied and at a frequency that reminds everyone why a change is happening.

In some cases people need to know there is an ultimatum to prevent drag in a change; people will need to decide whether or not they are on or off the bus. This is a very succinct message and at the same time ensuring people know there is an option.

The goal or prize might be huge but it is essential to start small and gain momentum; be prepared to describe what this might look like with each Board member.

Are you listening? No, are you really listening? What are members really worried about and perhaps not saying in words? Be sure you are able to get your point across at the right time only after you are sure you’re addressing their concerns.

If you are not about to address the concern, don’t carry on with your lines. Suspend, offer to come back or ask for other opinions in the room but don’t pretend the concern wasn’t raised in the first place and nor should you address it with waffle. You will gain more trust in taking another approach like those above.

Dispelling the myths; using references or reference sites from competitors or similar businesses and encouraging site visits. There is nothing more compelling than seeing something in action.

Finally, the currency of the conversation should be ‘outcomes’ not activities. This means selling the ‘afters’ first. You can then cover any hurdles and support you can foresee.

Ken Towning & Adrian Stalham

Waking up the Board

IN SUMMARY

Boards are like any other team with different personalities and different responsibilities but ultimately share the same goals (or they should do).

Ken Towning & Adrian Stalham

Waking up the Board

SUMMARY As our session revealed, there are five key areas to address to get the best from your Board interactions and even in waking them up.

Context - what is the remit they are working to, how does your topic relate?

Language - people hear different things from a single sentence, what do you want the Board to hear?

Human dynamics - there are different personalities in the Boardroom and there are different behaviours also, how can you influence these, by feeding them, sitting the right side of them or paying attention to them.

Influencers - not all influencers are in the Boardroom itself. Non-Execs, Personal Assistants, number twos can all help get the context, language and understanding of the dynamics. Then there are the vital Boardroom members and approaching them offline and ahead of meetings to gain more than one advocate before entering a boardroom.

Approach - from corridor conversations, through setting common goals to building on previous wins, there are many ways to approach topics with the Board, even the controversial ones.

Waking up a Board using the above formulas may be less painful and less careerthreatening than it might otherwise have been.

This is a crowd-sourced orange-paper courtesy of Sullivan & Stanley. S&S wish to give its heartfelt thanks to the following contributors;

Birenda Agarwal Chris Tomlinson Adrian Dates Kevin Holian Nigel Bainsfair Ken Towning

Duncan Stott Gareth Nutt Christian Tye Helen Bliss Trina Jackson Adrian Stalham

Chris McLarnon Margot Daly Nigel Lemmon Jevern Partridge Adrian Alexander Adrian Wakefield

Ken Towning & Adrian Stalham

Waking up the Board

Ken Towning & Adrian Stalham

Waking up the Board

The Change Society BUSINESS TRANSFORMATION, TRANSFORMED

Get in touch with the S&S team at hello@sullivanstanley.com

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