Saturday, August 30, 2014

CEO Overassurance: “Far Rosier Than Reality”

I’ve asked dozens and dozens of seasoned CEOs and board chairs, “If you could get a do-over, what would you do differently in your early years of board leadership?”  

Here’s a collection of their thoughts—and insights from the governance literature:

A CEO told me: “I wouldn’t lie to my board!” (On the expressive side of the four social styles, this leader painted a picture far rosier than reality.)

The co-authors of Boards That Lead caution directors, “Most chief executives are constitutionally optimistic, and since by definition their role is to surmount challenges, the tenor they bring into the boardroom is likely to be relentlessly upbeat. Taking executive overassurance into account will aid directors in detecting nascent troubles ahead, but it is only one piece of a very complicated puzzle.” (Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, by Ram Charan, Dennis Carey and Michael Useem)

Another CEO, wishing she could revisit missed opportunities, responded, “I would spend more time with individual board members.”

“When asked what they would do differently, retired CEOs most often say, ‘I would give more time to developing the board,’” writes David L. McKenna in Stewards of a Sacred Trust: CEO Selection, Transition and Development for Boards of Christ-centered Organizations.

And here’s my answer to the re-do question: “I would have been more intentional in mentoring and inspiring board members with niche books. That would have created greater ownership of our vision and mission.”

“Avoid Management-by-Bestseller Syndrome that requires everyone to read this month’s trendy book. Instead, build a management library in your office and recommend specific titles to specific people for specific problems or opportunities.” (See The Book Bucket chapter in my book, Mastering the Management Buckets.)

You can create a life-long learning culture on your board by inspiring at least one board member, per meeting, to give a five to seven-minute book review on a key topic: governance, spiritual discernment, leadership, trends, risk, finance—whatever your need is.  Leaders are readers!

Carl Bard said, “Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending.” (Wow. That’s the Good News!)

QUESTION: If you could get a do-over, what would you do differently in your early years of board leadership? What will you do in the next 90 days?

Tuesday, August 19, 2014

Rooting Out Boardroom Dysfunction

Board leaders “can anticipate at least one major crisis during their tenures,” predict the co-authors of the excellent book, Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, by Ram Charan, Dennis Carey and Michael Useem.

Can you prepare for your next crisis? Yes. The first step is to “Root Out Dysfunction,” which is also the title of the fourth chapter. The authors explain:

 “In our experience, as many as half of Fortune 500 companies have one or two dysfunctional directors.” They identify three types:
     • “Some see themselves as the smartest person in the room.
     • Others seek recognition.
     • Others are frustrated would-be CEOs.”

They add, “Whatever their personal motives, they tend to micromanage or take boardroom discussions down dark alleys. We have seen a director interrupt the first five minutes of a CEO’s boardroom presentation and sour the mood of both board and management for the remainder of the day. The result is to impair, even negate, a board’s capacity to lead the firm. As in any group, a dysfunctional member can sabotage the entire team.”

The book cites a study of board members in Australia which summarized dysfunctional directors into these colorful categories:

  • Nonstop talkers: board members who “sought to demonstrate their exceptional knowledge”
  • Hobbyhorse jockeys: directors who are “overly focused on the one topic they knew well”
  • Hand-grenade throwers: board colleagues who “were contentious and obstructive”
  • Captives of compliance: this group “stressed rules over judgment”
  • Egocentrics: the “self-referential” types on your board
  • In over their heads: those directors who “simply did not understand their firms challenges”

Charan, Carey and Useem add, “That such excesses emerge in even the bluest of the blue-chip boardrooms is not surprising. Directors bring the same array of human foibles to the boardroom as do people to any room, though one would expect that the oddest of the oddballs would have been screened out.  What is more surprising is that so few steps are taken to limit the damage.”

So what should Christ-centered boards do when dysfunction is alive and well? First, read this chapter. It’s excellent. Next, ask your board chair to address the issue with the offender in a one-on-one conversation. According to corporate coach Marshall Goldsmith, every leader has blind spots and it’s possible your dysfunctional board member has never been graced with frank feedback.

"Love should always make us tell the truth.
Then we will grow in every way
and be more like Christ, the head."
(Eph. 4:15, CEV)

QUESTION: The authors suggest that “a boardroom norm on acceptable discussion and personal behavior can be of special value here, guiding directors on where their leadership ends and management begins.” Do you have a boardroom norm that every board member has affirmed?

Tuesday, August 12, 2014

Resigning from the Board: The Tipping Points

Is there a tipping point in board service when it’s time to exit the board?

How should board members spiritually discern if their engagement is inadequate (or even mediocre) and a resignation might be in order? How do you know when it’s time to free up space for new board blood and new energy?

Attorney Jon Ruybalid says there are “thought patterns and questions that can help a board member determine if the time has come to resign.” In his August/September 2014 column, “In the Name of the Law,” in InSite® magazine, published by Christian Camp and Conference Association, he gives five poke-in-the-rib statements to consider:

  • You have stopped reading the board meeting materials in advance.
  • You realize that you use board meeting discussions to challenge other directors, find errors in their thinking, criticize decisions and try to gain negative support.
  • You do not recognize names of staff members or programs that are brought up at a board meeting.
  • You wonder to yourself if board membership is worth it because you are not getting much out of it.
  • You are not able to support board decisions that are inconsistent with your preferences.

If you’re not getting much out of board service, says Ruybalid, who has represented nonprofits for almost 20 years and serves as CCCA’s legal counsel, he adds,
“Board service may have become [more] about your personal benefit rather than the benefit and service to the organization,
staff and those impacted by its ministry.”

Are you at the tipping point yet? Is there someone on your board who needs a God-honoring nudge (or wake-up call)? According to the ECFA 2012 Governance Survey, with responses from 1,600 CEOs, board chairs and board members of ECFA-accredited organizations, asking under-performing board members to exit was the “most challenging problem” of 20 effectiveness indicators.

Heed King David’s aspirations for his son in 1 Chronicles 29:19 (The Message):
“And give my son Solomon an uncluttered and focused heart so that he can obey what you command, live by your directions and counsel, and carry through with building The Temple for which I have provided.”

QUESTION: Are you fully engaged—with an uncluttered and focused heart—in your role as a board member? If not, what are you going to do about it?