High Trust, High Performing Boards
How many Chief Executives really want a high performing, high added value Board?
I can think of a number of CEOs over the years who’ve said:
- “My Board hardly adds any value to this business”.
At first I would look shocked (“You can’t be serious”).
Once I had heard a few other CEOs use almost exactly the same words I would try to look surprised (“Really?”).
Nowadays I’ll just say, “That’s down to you, isn’t it?”
Of course, where a Board adds little value this is down to both the Board and the Executive team. But this isn’t how they see it. Each “side” tends to blame the other, with:
- The Chair and Non-Exec Directors complaining to almost any who will listen that the Exec team don’t bring anything really important or difficult to them until they’ve made up their minds about what they want, at which stage they expect the Board to rubber-stamp what they’ve already decided
- The CEO and top team complaining to any who will listen that the NEDs hardly ever offer positive feedback and spend far too long on technical minutiae rather than big strategic issues.
The reason this matters is because it usually ends up with performance suffering. And yet it can be left behind.
The key is to find ways of enabling the Non-Executive Directors and Executive team to discuss:
- How they think their behaviours towards each other are affecting their leadership of the business
- And what sorts of changes in behaviour would enable them to add more value to the business.
“We try to keep problems away from the Board”
So often the way an Executive team manage their Board reinforces the pattern of low trust behaviours that drive down performance.
Here are two examples of the sorts of things said by a good number of Exec teams:
- “We like to keep problems away from our Board and only give them bad news when we absolutely have to”
- “Before Board meetings the Execs work through anything tricky as a team, and then we go into the Board with a united front. We never disagree with each other in front of the NEDs”.
Executive teams that like to go into their Board with a “united front” are nearly always the ones who complain about the Board not being as supportive as they should be.
And when they try to restrict the Board’s information diet to good news, is it any wonder that some Non-Execs become rather suspicious of what’s always on the menu?
Once they’ve done a little grumbling I will ask:
“Can you tell me the last time you went to the Board and asked for their views about something, on the basis that you really wanted to know what they thought?”
They will usually tell me the story of an issue where the Execs had a pre-agreed position. So I try again:
“What I’m trying to find out is when you last consulted the Board on something where you weren’t sure what answer you wanted, because you were genuinely after their advice and wise counsel.”
“I see what you mean. That’s rather a new way of looking at how we handle our Board...”
If you want advice and wise counsel you need to ask for it!
If CEOs genuinely want their Board to offer them some advice and wisdom, they do usually need to ask for it. If they don’t, what they get back from the Board won’t be thoughtful, strategic advice. It’s more likely to be nit-picking and ‘control dramas’.
This issue nearly always comes up when I facilitate special Board sessions to assess their performance. Typical comments from NEDs are:
- “We rate our CEO and top team highly, but you wouldn’t think so by the way they manage us. They say that we can be risk-averse but they don't take any risks with us!”
Think how impressive it is, as seen through the eyes of Non-Exec Directors, if the CEO brings a really tricky problem to them and explains that the Exec team have been weighing up the pros and cons of two possible options, this is the one they favour for these particular reasons - and do they agree or might there be some sort of Option C?
Think what a powerful statement of trust that represents for the NEDs!
If one of them has a view about a better way to tackle the problem, they can now volunteer this to their Execs, who don’t have to say that they want to go with the idea. Far from it. All they need to do is agree to take it away and consider it along with the other ideas they’re working through before bringing a firm proposition back to the Board.
The Execs are leading by sharing with their Non-Execs how they’re handling some of the most difficult challenges on their agenda and seeking their advice about the best way forward.
The Board are being careful to respond thoughtfully and appropriately, because the Execs are treating them as people whose views MATTER.
The Exec team are showing trust in them and they’re keen to reciprocate. Two-way trust...
How individual behaviours can undermine performance
There are potential tensions in any relationship between an Executive team and their Board.
Below are four quotes that I have selected because they’re not as obvious as the more generally discussed behaviours such as defensiveness and aggressive challenging, yet they can be very undermining of a Board’s performance. At first sight, they’re not a big deal, which is why they can quickly become habits that get in the way of higher business performance.
Please click on each one for a fuller explanation:
1. “I don’t like conflict and generally try to avoid it”
I’m constantly struck by the number of CEOs and Board Directors that are conflict-averse. This can have huge implications for the way a Board works and yet it’s hardly ever discussed in an open way.
In my experience, those people who can be quite pushy by nature tend to have a good knack for sensing which members of the group have difficulty coping with conflict. Often it’s not at all difficult, and sometimes you can see those who hate conflict literally pushing their chair slightly away from the group to distance themselves from something that they find quite distasteful.
Some Directors will occasionally push hard for a proposal knowing that it will generate opposition from others, thereby causing those who are uncomfortable with conflict to become more than a little amenable to some sort of “compromise”.
Hey presto, a compromise is proposed as the best way of ensuring a consensus among the Board and the sheer look of relief on the faces of those who were dreading an imminent bust-up can mean that it goes through within seconds!
When I’ve been facilitating a Board and seen the signals that this is about to happen, I have found that the best response is to acknowledge that some people are having difficulty with what they regard as a possible conflict within the Board.
I bring it out into the open in a way that is respectful and sympathetic.
I then ask their permission to keep this difficult discussion going for a little longer in the hope that we will yet achieve an acceptable outcome, even if this is a majority rather than a unanimous view.
No-one has yet challenged this proposition.
Those Directors who were conflict-averse were reassured before they got to the stage of pressing their ‘panic button’.
This enabled the Board to engage with some real choices, knowing that any compromise would need to emerge naturally, and not as a way of winning over those who hate disagreements.
2. “I’m not comfortable with risk and most people know it”
Another comment that often comes up at Board self-assessments is that “we tend to be risk-averse”.
As we open it up, we usually find that there are one or two Directors who feel honour-bound to raise the fact that they're “not comfortable with the risks involved” as soon as anything risky comes up for debate.
Others instinctively want to keep those who are risk-averse happy and so their instinct is to say that whilst they quite like what’s being proposed they also think that the scale of the risks should be reduced, even though this sometimes means that what’s being proposed can’t go ahead because it’s simply impossible to reduce the element of risk any further.
When this sort of issue comes up, I make a point of asking whether those NEDs who feel that the Board tends to be too risk-averse would be more willing to challenge the ‘no risk group’ in future. I stress that sometimes the “right decision” is the one that feels risky for some, rather than the one that is low risk all round and perhaps very low impact in terms of future revenue.
The answer is usually a hesitant “yes”.
Why the hesitation?
It does feel risky challenging those who are risk-averse.
The longer you postpone it the harder it is, since the risk-averse Director can speak on behalf of the whole Board. “We have always been wary of taking risks...”
3. “I’m a detail person and get irritated by woolly decisions that mean different things to different people”
Every successful top team needs at least two perfectionists on board!
Perfectionists bring huge gifts. At the same time, some of their instincts can play havoc with team decision-making.
By their very nature, perfectionists like things to be as tidy as possible. They want “maximum clarity”, which is absolutely fine, except that it’s not always the way the process of building a consensus works.
Sometimes there is broad agreement about a general direction of travel, on the basis that once this has been agreed many of the details can be filled in over an agreed period of time. Perfectionists, however, can easily be dissatisfied with this, wanting the I’s to be dotted and T’s crossed as part of the process of taking the big decision to move ahead.
Pressure from them for more detail to be agreed there and then can easily result in the whole decision being postponed, with potentially serious consequences for the business.
This sort of behaviour often isn’t too difficult to manage so long as people are open with each other about what’s going on and the behaviours are seen to be the natural behaviours of a perfectionist.
When necessary, perfectionists need to be supported with moving slightly out of their “comfort zone” for the sake of the Board as a whole.
4. “I don’t like being bounced into something during a meeting; I like to be given time to think things through”
I occasionally support teams with conflict resolution, usually in moments where a crisis has come to a head after an underlying problem has been ignored for years. I can think of one example a few years ago where the CEO faced near insurrection from his top team. It took quite a few hours with him and the team to understand what had gone wrong.
It was some words that he used to describe his way of working that provided the key:
“If I go home on a Friday worrying about a problem it might not be until the Monday morning that I know what I want. Over the weekend I turn it round and round in my mind. I then go to the Exec team and say we’ve got to make this happen, and I can get really annoyed when they don’t share my sense of urgency.”
Some people like to keep their thinking processes very private. Of course, that’s their right! The problem is, though, that when teams are asked to co-own a solution they usually like to co-own at least the core of the analysis that led up to it.
The point about a lot of problem-solving is that the analysis isn’t about going from A to B, it’s more like going from A to Z with many twists and turns at various stages in the middle of the alphabet!
Exec Directors can behave very badly when they think their Chief Executive isn’t sharing with them how they got from such-and-such a problem to such-and-such a solution. That’s what was happening in this case and I’ve seen it a number of times since, mercifully not with such disruptive consequences.
More commonly, I have seen some CEOs go out of their way to stop decisions being made by their Board or Executive team when they themselves hadn’t thought the issue through to that particular outcome before the meeting.
Whenever a CEO tries to close something down prematurely at the Board, this can be handled by a good Chair, sensitively but firmly.
It can be altogether more difficult for Exec Directors to handle this when they’re meeting with their Chief Executive, who’s chairing the team session, and find that any new idea that the CEO isn’t fully on board with is liable to being postponed or vetoed.
This can slow teams up a lot at precisely those times when the last person who should be slowing up progress and movement forward is the Chief Executive.
Closing down tricky discussions before any decision can be taken is one of the ways some leaders have learnt to keep control and this behaviour needs to be challenged and renegotiated with some care.
Acknowledging the impact of our behaviours when they COMBINE
When these sorts of issues come up as part of a Board self-assessment, some of the best learning comes through discussing how these behaviours can combine with each other and create powerful combinations that block all sorts of change:
- The NED who is risk-averse teams up with one who is conflict-averse
- The perfectionist who wants the details sorted out at the same time as the big picture teams up with another NED who wants to avoid a decision until they’ve had more time to think the issues through on their own.
These combinations can be formidable and the process of persuading some Directors to rethink the ways in which they forge alliances with each other is itself quite a challenge.
Seeing Boards as single teams
Underpinning discussion about each of these behaviours is the simple proposition that high trust, high performing Boards require their members to own their behaviours quite a lot more than many Directors seem to be willing to do at the moment.
When this happens, they experience the benefits pretty immediately, in terms of quicker decision-making, greater sign-up to these decisions and more relaxed challenging of each other.
It is these benefits that spur them on to wanting to work more closely together as a mutually supportive single team.
The perfectionist can’t stop being a perfectionist. But they can exercise a little more self-restraint and try NOT to apply this instinct to every aspect of the work of the Board.
The CEO who likes to think through just about everything of any significance before it comes before their team might well never change. But the rest of the Board can help them through those moments when they show signs of jumpiness.
In my experience, high trust, high performing leadership is about being willing to discuss how our behaviours affect the team as a whole and prepared to challenge each other if and when they get in the way of business performance.
Where people feel that the challenge is generous, they will often respond very well indeed.
Talking NOT about individual behaviours but about shared habits
For any Board, the most difficult challenge is to open up discussion about these behaviours in the first place.
It’s the Boards that are so polite towards each other and so anxious not to cause offence that often have the most elaborate “dances” that stop them discussing anything that’s significant and difficult about leadership behaviours.
How do you break the ice with them?
I have found that the best way is to talk not about individuals’ behaviours but about shared habits.
This helps to ensure that no-one feels they’re being picked on, whilst enabling one to “call the behaviours”. For example:
“Have you noticed that the moment someone says they’re uncomfortable about the risk involved with something, some of us immediately put ourselves in the same position – and no-one really asks the question WHY?”
The fact that it might be the same person each time who says they’re feeling uncomfortable about the potential risks of doing something is neither here nor there.
The point is that there is a collective response of taking fright when the word ‘risk’ is mentioned, instead of pausing to ask how great the risks really would be and what other dangers might need to be faced if the Board opt for the ‘do nothing’ or ‘do as little as possible’ options.
Even where you feel that you need to mention someone by name, if you go on to emphasise that everyone is caught up in a group habit it makes it much easier for the person concerned to take your message on board without feeling that they’re being picked on.
If you appear to over-personalise what you’re saying and trigger some sort of justification from them for why they don’t like risk-taking, you’ve almost certainly lost it!
This is why whenever I do conflict resolution work I always include “No self-justification” as one of the key groundrules. It’s essential to ensuring that you don’t grind to a halt as one or two people offload some personal “baggage” that then blocks your way ahead.
Giving ourselves permission to behave differently
Whenever Boards are trying to let go of behaviours that they know to be unhelpful but part of a pretty well established habit, each Director needs to feel that they’re being encouraged by the others to let themselves behave differently.
Feeling that others want us to be able to behave differently is so often the key to us giving ourselves permission to behave differently.
During this process, it is essential to make a point of assuming the best of other members of the Board.
Assuming the best is at the heart of any Board culture in which members are encouraged to speak out on “difficult stuff”, in a spirit of openness and generosity. It is key to higher trust working among any team, as explained on the page on the seven keys to higher trust working.
Pete Ashby
pete.ashby@2waytrust.com
01364 631310