Published on 12th September 2011, BUSINESS STANDARDI have worked for twenty four years on company boards in many roles: as an executive and as a non-executive director, in India and overseas, as independent and non-independent director, and in international as well as in Indian companies.
I have worked for twenty four years on company boards in many roles: as an executive and as a non-executive director, in India and overseas, as independent and non-independent director, and in international as well as in Indian companies. I have surely not seen it all, but I have seen a lot. Here are a few mantras which may be useful to senior managers who are aspiring to be future leaders.
Directors seek ‘effective’ solutions whereas executives seek ‘efficient’ solutions.
Efficiency and effectiveness are different. Successful executives are trained to seek efficient solutions, which can be traversed in a straight line. Successful board directors are trained to seek effectiveness, which may mean a circumlocutory approach.
The code of an efficient organization would have characteristics such as:
The code of an effective organization would have other characteristics:
Consider the analogy of the common house fly. It does not fly in a straight line but moves in circles. Unlike humans with a simple eye, a fly has a ‘compound eye’—about 4000 immobile, fixed vision crystalline eyes, right along both sides of its face. The fly assesses its distance from a goal, makes a move, reassesses its
distance from the goal, adjusts its body again and keeps repeating this till it reaches the goal. The lack of sharp vision prevents it from moving in a straight line, the efficient path.
Like the fly, the anatomy of the organization’s ‘eye’ prevents a sharp vision from guiding the movement of the organization. Wherever there are people who are encouraged to think for themselves, there is bound to be a diversity of views. An organization is the sum total of these diverse viewpoints. Differing viewpoints
lead to differing agendas and these naturally serve as a source of great conflict among people. These differing views retard sour human relationships.
A further complexity comes from the fact that people in the organization may not express a genuine view in the formal meetings. If the view expressed at the table is different from the real view that the person holds, it increases the complexity. That is why any organization truly has a ‘compound’ eye and, therefore, a very complex agenda. It is not whether the compound view is good or bad, it is just that it is different from the simple view.
Learn to listen
Generally successful business executives are poor listeners. They also tend to be opinionated. Every human assumes he or she knows how to breathe. But a yoga teacher will easily show you that you do not know how to breathe. So also it is with listening. It is very tough to listen. During your career you may have been put through speaking or presentation skills courses, but I bet never through a course on listening. Bruno Kahne, a consultant, has worked with deaf people, who use sign language to ‘listen’. He offers five lessons.
Treat the directors as your senior friends.
Aspiring CEOs tend to think of the board as a group which approves the CEOs solution, not as a group which can help to choose a solution from amongst alternatives. They are regarded as some sort of obstacle which has to be overcome and as people who have to be convinced about some issue. This mental model results in behaviours which pitch the board on one side and the management on the other. However think of directors as a group of experienced friends, a group which is a readily available sounding board.
You get from the board what you are perceived to expect from the board. If you are secretive, they may also be so. If you don’t share issues openly, they will feel the need to ferret them out of you. If you try to play games, they too could do so.
Be respectful of their experience, age and views even if you do not agree with them on all matters.Don’t hesitate to show that you need advice or that you are unsure about which option you should pursue while addressing a particular problem. CEOs need not feel that they must present themselves as the great, all-knowing leader. After all, deep inside, CEOs know that they do not match that description.
I remember one director who insisted on being addressed by his first name. When I enquired why, he replied,” If they don’t address me by my first name, how will they ever be able to say to me ‘I don’t agree’?
Directors are fallible and human, but get the best out of each director.
Directors sit around the board table with their own world view. It could be functional (accounting, manufacturing, legal etc) or geographical (Indian, foreigner etc) or experiential (engineering, FMCG, software industry background) or even gender. Most likely, they are not experts on your industry or your function—remember, that is precisely why they are there.
Try to see their point of view. They may be supportive or sceptical. Treat both with respect.
I recall two companies when the CEO presented an acquisition proposal. In one case the board wondered whether the price tag was too high and the strategic fit was weak. The CEO later thought about it and dropped the idea. In another case, a senior director said to the CEO, “From what I understand of your business and from what I think you are saying, this may be one of the best acquisition targets in the industry.” The CEO was quick to agree. “In that case, if I were you, I would just get on a plane, sit out there and negotiate to buy,” said the director. And that is what the CEO did. The company made a fine acquisition.
Work off-line with the alpha arguers as well as the reticent.
In every board, 20 percent will be the outliers at each end while 60 percent will the regular participants. The alpha arguers can be such that nobody wants to ‘take them on.’ The reticent may open their mouth only to sip their tea, but it does not mean they have no contribution. In one board, a quiet director came alive when manufacturing and safety matters cropped up, both being hugely important in that industry. He served on committees and helped the management to be vigilant.
Ideally the chairman should go around the table to draw in the participation of all. Though it can be delicate, management also can try to seek views off-line—on the phone, over a drink or a cup of tea, not like a lobbyist for a point of view, but as genuinely drawing out the expertise of all directors. Try to assimilate their points of view. It is demanding of your time, but it is worth the effort. Managers are taught to identify and recruit supporters. Politicians are trained to identify their detractors and carry them. Aspiring CEOs must learn to do a bit of both.
Elicit views on long term strategy as you go along rather than wait for the ‘big discussion day.’
Directors like to be engaged on strategy. CEOs like to present the ‘grand strategy’ in a grand way. There is a fundamental disconnect. You feel you have thought of everything. The director feels he is hearing it all for the first time. Use chosen ‘nuggets of time’ to get a sense of each director’s view on strategy so that the
‘grand presentation’ is not wholly novel.
One CEO mastered it. He made it a point to have 3 or 4 chats with each director with the genuine intention of getting their ideas before he shaped his strategy into a form for presenting collectively and formally. Importantly he had a fair idea of any difference in approach among the directors. He allowed enough porosity in his presentation to genuinely accommodate each director’s view so long as all the directors could finally agree on a direction.
Do not become larger than you are
Successful executives always run the danger of behaving with an attitude of an exaggerated self-image. They overestimate the extent to which they control events and underestimate the role of chance and circumstance in their success. They have an unwarranted self image of their personal contribution to the company. These are generally detrimental, but become a huge handicap at the board level. These behaviours are red rags to directors.
Before shooting the arrow of your opinion, dip its point in honey.
This sub-heading is translated from an Arabic saying. It relates to how you can use a constructive approach to expressing a difference of opinion. Differ if you think differently, but state your difference in a constructive way. How did Vibhishana advise a furious Ravana about the incorrectness of executing Hanuman? Vibhishana first praised Ravana for his accomplishments; thereafter, he advised how inappropriate it would be to break the rules of diplomacy by killing a messenger.
Do not persist in constantly expressing your difference unless it is a matter of principle, law or propriety. It is as incumbent upon you to offer your views but it is also incumbent on the director to listen to your views.