Put it on the Board: Shifting to Active Co-Creativity
3 Areas of Collaboration Among Management Team and BODs to Move Through Current Turbulence
If you’re not thinking about how your Board is working in tandem with your management to co-create the next phase of business success, you should be.
Starting now.
The role of the board is not what it used to be. With the rise of activist shareholders, along with the market impact of COVID-19, CEOs are reassessing how they interact with their boards in a more mutually beneficial way, shifting from ratification to co-creation.
Why now?
BODs have always played a role in vetting and ratifying company strategy, but we are in unprecedented times with a global pandemic and an unsettling political environment. Pro forma ratification of good management strategy is a thing of the past. There are no right answers, no tried and true approaches because the future is so variable. The rate of change will continue at disruptive speed. No one person or team can be ahead of the curve fast enough.
Who will Succeed?
Those that are most successful are CEOs who are co-creating the next direction of their companies with their BODs, using scenario planning effectively to answer the question – “what if?” Taking advantage of the diversity of experience on the BOD multiplies the robustness of the future set of strategic options in a way that multiplies the potential for success.
Among those succeeding in repositioning their companies, are the CEOs who are co-creating with their boards, particularly within three areas:
Strategy Development
Leadership continuity and succession
Organizational culture
Traditionally, these areas have been within the primary purview of the management team and the BOD ratified what management presented. Now, engaging the BOD in more meaningful co-creation is proving to be a critical success factor in the “next normal.”
Evolving to this level of board engagement will likely require a shift in thinking for all parties. Reaching the point in which both the BOD and management are comfortable with working together at the co-creation level is grounded in one key element: Trust. If trust is missing, so are confidence and performance.
Strategy Development
Bringing a new dynamic to a high-performance team encourages strategy development in a much more active and meaningful way. The role of the board pivots from strategy ratification (i.e., Chairman/CEO presents ideas; Board accepts and moves on) to strategy creation. The development of growth plans and transformation is richer with added experience represented on your board. For the last several months, technology is being used in interesting – and fun – ways to get senior leaders, along with their boards, actively engaged in developing strategy together. The current climate calls for an approach that incorporates scenario planning, since the tried and true approaches don’t account for the tremendous variability we face.
Leadership continuity and succession
If the board’s most challenging role is CEO selection and succession, odds are they don’t have the view inside the talent pipeline below the senior team. Business continuity relies on widening the lens to joint consideration of talent strategy with an emphasis on development and serious preparation of “ready now” candidates for critical roles.
Under normal circumstances, having dinner with members of the management team is a way to get to know talent in informal ways. However, having “alone time” with key leaders without the CEO present to guide the discussion is more frequently a method employed by high performing BODs to really get to know how leaders in the organization think and behave. It also allows senior leaders to build meaningful relationships with the BOD which is so important at times of succession. The pandemic has certainly built additional roadblocks around BODs and management teams spending quality time with each other. Creative thinking around new technologies and virtual events can provide alternatives to ensure these opportunities still exist, and should be recognized at the same level of importance as the structured business meetings.
Organizational culture
Organizations are actively monitoring their reputations, and reputation is deeply influenced by the behavior of the people who work for the company. Culture is the “glue” that helps those who work for organizations understand its norms and values. It is the common thread that keeps the organization connected and helps people understand expectations “when no one is looking.”
An organization’s board is a reflection of its culture, and as such, should have a role in culture development. Are the board members comfortable in sharing their opinions, even if these opinions are contrary to the group? Do board dynamics foster diversity and inclusion, in a comfortable environment? Do Board members communicate authentically, collaborate actively and handle conflict in constructive ways? These are important hallmarks of a healthy culture.
Planning ahead
The best CEOS do their work around the talent pipeline. When applied to the board, CEOs must ask themselves:
Have I engaged my board in a co-creative way?
Have I been able to listen?
Have I been able to constructively engage in the tensions that occur at the board level?
Are we producing the best product we can produce?
Do I have the right board members for where I am taking the company vs where we have been?
It takes co-creation and scenario planning to move through the current turbulence. And, it takes time to get the board…on board. CEOs must use this time to consider the talents and expertise on-hand at the board level. Assuming its members represent a diverse level of experiences, backgrounds and skillsets, boards can function as a team of high performers who are actively engaged in, and mutually accountable for, the success of the company.