I sit on the board of a not-for-profit organization engaged in transforming leadership in the not-for-profit sector and we design and deliver a lot of governance education to executive directors and their boards. We strive to lead by example and model what we teach. We just completed our annual board evaluation process and many things are going extremely well in how we operate and govern. And then there is this comment: “We need to be careful to keep taking the longer view - we easily slip into the weeds in discussion.” Sigh. We are just like everybody else.
Pretty much every chief executive I have ever worked with has logged the same ‘observation’ of the board: they can get awfully mired in the detail. When I try to reassure them their experience is not unique, I tend to get a look of profound skepticism. Because when you are the chief executive and your board is triple-checking the math or debating the word in a sentence, you can get a little paranoid. A board that dives down and gets stuck in the weeds is, unfortunately, the rule rather than the exception. This dynamic occurs even though directors would rather shoot themselves than be described as tactical or meddling.
One of the most difficult and often unexpected tasks a chief executive undertakes is the management of his or her board. A first-time CEO is often blown over by the nuanced complexity of this task. And for some reason, prior experience as a board member seems to be little pre-requisite for effectively managing your own board.
Rather than write one more article reminding us all of the role of the board and the difference between governance and management, I thought it might be worth exploring - from the point of view of a psychologist - why the ‘detail-absorbed board’ phenomena is so prevalent and what you can do to alleviate it.
Why boards get in the weeds
Some of the reasons boards struggle with maintaining a strategic focus have more to do with being human than they do with being a board member.
The human brain uses data and detail to create big pictures and spot trends. Our brains formulate narratives by accumulating details. Because the board member’s brain actively engages with the organization sporadically, it takes time, and a lot of data, to build up a coherent picture and elevate facts to insight. Management tries to help by providing (often hundreds of pages of) information which it expects board members to digest in 7 days or less. It reminds me of my first week in graduate school when each professor handed out 350 pages of reading for discussion in next week’s class. When board members ask a lot of detail-oriented questions, it is probably because their brains are still trying to piece together information and make sense of it. And some brains require (and adore) more data than others. Given the nature of the human brain, it is possible that ‘dropping into’ an organization a few times a year may not be an ideal rhythm when the goal of the board is to provide strategic oversight and input.
The role of the board member is complex and multi-faceted. In the world of not-for-profit board governance and leadership excellence, we talk about three roles boards play: fiduciary, strategic and generative (Chait & Ryan & Taylor, 2005). Fiduciary responsibility is a natural draw for the detail-oriented. Strategic responsibility can also elicit its fair share of detailed questioning as board members seek to understand an organization’s priorities, rationale and method of executing on those priorities. Generative responsibility is the playground for future-oriented, strategic, conceptual thought. It needs more than a 10-minute time slot. If you look at your board meeting agenda and the topics up for discussion, it will probably become painfully clear why board members show up with their pencils sharpened.
Under stress, strategists become obsessive-compulsive detail-oriented problem-solvers. Personality is a funny thing. There are our normal tendencies and then there are our stress behaviours. For some strange reason, stress behaviour is often the exact opposite of normal behaviour. Since the issues boards face are rarely run-of-the-mill, are frequently high-stakes, and the voting members do not have any control over their execution, stress responses kick in. Suddenly you find yourself staring down a group of highly strategic people who all want to dive in and solve the problem - or even argue about the right method to solve the problem - instead of formulating brilliant questions that cast a light on the shadowy corners.
How to elevate the contribution of the board
There is a tendency for us to make assumptions and draw conclusions about the character and competency of board members when it might be more helpful to take a step back and think about them as human machines with predictable patterns of behaviour. If you can anticipate, you can try to over-ride. Here are three suggestions for facilitating the strategic contribution of the board:
Manage the human brain. The way information is prioritized and communicated can lighten the cognitive load and help the board maintain a strategic focus. If you communicate strategically, you increase the likelihood of getting strategic input in return.
Make space for generative contribution. Recognize the board is being asked to play multiple roles. If you want a strategic contribution you have to create the time and headspace for that. The middle of the audit committee meeting may not be the best place to insert a conceptual discussion about the evolution of the risk management model.
Anticipate stress reactions. When people walk into a room to deal with an issue, they have probably had just a few days or weeks to get their heads into it and, suddenly, you are asking them to make a high-stakes decision. As a board member, what I hate most is being surprised with something and then told a decision is urgent. What it says to me is that the chief executive is a) not on top of the business, b) lacks respect for me, my role and my decision-making process and/or, c) wants to rush something through before I’ve had a chance to think about it. If you are going to ask the board to confront an important decision that will likely cause anxiety, plan for that.
A board can make a significant contribution beyond fiduciary due diligence. And this is, in fact, why most people sign up to serve. Not just for the pleasure of combing through financial statements and risk management policies, but also to ignite the strategic capacity of an organization. Do they get too stuck in the detail? Probably. And, maybe, it isn’t just their fault.
Governance as Leadership: Reframing the Work of Nonprofit Boards. Richard Chait, William Ryan & Barbara E. Taylor. John Wiley & Sons, Inc, 2005.
Your future success as a leader depends upon your ability to translate feedback and awareness into a tangible development plan. Unfortunately, you probably have no idea where to start. After 20 years in the business of helping to transform leaders and organizations I am convinced, more than ever, that the ‘black box’ in bridging the gap between leadership potential and reality is development. There are endless solutions for acquiring feedback that point in the direction of change. There are, likewise, endless solutions for measuring and rewarding performance. What is most often missing is what happens in between - a fundamental understanding around how to move from leadership aspiration to reality. In essence, how to change behaviour. If you are a leader interested in how you can transform yourself, read on.
Step 1: Gain Clarity Around You Who Are and Who You Aspire to Be
Why should anyone be led by you? We don’t spend enough time asking ourselves who we want to be when we grow up and why we should be leaders. How can you tackle your development if you really don’t know who you are and what you stand for? I have had the privilege of working for leaders who ‘get’ this and the less-than-inspiring experience of working for those who do not. Quite honestly, there is nothing more frustrating or disillusioning than working for someone who really does not have an interest in developing their identity as a leader.
Defining Who You Are as a Leader
I will admit I can be a tedious leadership coach. When I am working with leaders in the context of personal transformation, before we even discuss where they should focus in terms of their development, I ask them to answer these questions:
Step 2: Setting Development Targets and Priorities
The goal of leadership development is to align intent with behaviour in order to achieve higher-order objectives in the context in which you find yourself. So often, leadership development springs from a mis-match between what a leader is striving to do and what is coming across to key stakeholders. The extent to which you are aware of and can objectively assess your development opportunities determines your ability to develop strategically and intentionally.
Questions leaders should ask before determining development priorities and next steps
Not everything that you get feedback on is worthy of development. I don’t particularly care what your 360 feedback, leadership assessment report or leadership coach have to say about how you need to change. Instead, I suggest you ask yourself a series of questions to get at the heart of where you should focus your development:
Making Change Stick
Where the rubber hits the road around personal development is translating your desired future behaviour into tangible action steps that will result in real change. I have seen a lot of development plans; I have seen a lot less actual development. If you are serious about actually transforming who you are as a leader, the very best resource I have found for changing behaviour is James Clear’s Transform Your Habits. My summary of how to translate development intent into sustainable behaviour change is:
Transform Your Habits (2nd Ed.). James Clear. www. jamesclear.com
According to recent surveys, employee engagement is at an all-time low. At the same time, the focus on engagement seems to be at all-time high. Even worse, organizations have handed off driving employee engagement to the human resources department when so clearly it is a leadership accountability. The culprits of low satisfaction scores of old - poor wages or working conditions, lack of training and tools, insufficient communication, no recognition, lack of empowerment - have largely been resolved in many of our work places. And yet malaise is increasing. What is going on and how do we fix it?
Why we are disengaged at work
Recession fatigue. The fragility and inconsistency of the economic recovery is wearing us down. For most organizations cost-management and ‘operational efficiency’ seem to have permanently replaced growth and innovation as a strategic vision. It is hard to get excited about pinching pennies 7 years in a row. The human spirit needs a more meaningful purpose.
Technology fatigue. Whatever lines used to exist between work and life have been erased by the phone-sized computer we carry in our back pocket. Other than the few hours when we are asleep, chances are we are constantly multi-tasking job and life responsibilities. Although humans invented computers, we are not computers and we do not function well when we are all-systems-go, 24/7. The human physiology needs a different set of rhythms and programs.
‘Just world’ hypothesis fatigue. There was a time when we believed in a just world - that commitment and hard work were rewarded and the world, including the workplace, was a fair and just place. Instead, we see a world that is not so fair. The rich and powerful get richer and more powerful while the rest sit on the sidelines waiting for a turn that never comes. Average CEO pay has risen 22% since 2010 while average wages have declined or barely kept pace with inflation (Mishel & Davis, 2014). It's no wonder employees are disgruntled.
Middle child fatigue. Drawn in by the now infamous War For Talent argument (McKinsey & Co., 1998), organizations have concentrated their recruitment, development and retention efforts on executives and future executives. The remaining time is spent trying to manage the performance and exit of under-performers. Meanwhile, 85% of the workforce - solid contributors who are critical to success - have been left on the sidelines. Discretionary effort and emotional engagement are hard to muster when no one seems to be paying attention.
Engagement fatigue. It is possible we are all tired of being surveyed and then told that on top of everything else we are expected to do, we have to work on our attitude. There is no evidence proving organizations that measure and manage engagement in the same way they tackle equipment maintenance have more engaged employees. Workplaces visibly humming with engaged employees are probably not worried about measuring it.
How to improve engagement
Rather than focus on measuring engagement and spending countless days in post-survey focus groups and action planning committees, I have some ideas about how to instantly improve the engagement of employees:
Vision. Give people something to believe in and strive for that ignites their imagination and spirit. Say it like you really mean it.
Balance. Take the IT system off-line for 12 hours each day and/or encourage people to deal with pressing personal issues during work hours, whenever they may arise and no matter what is going on at the office.
Equity. Share the wealth. Consider skipping the executive team retention bonus and distribute it to the customer service reps or safety officers instead.
Respect. Treat everyone like they are important today and a critical part of the organization’s future.
Leadership. Ask teams to vote for the person they want as their leader and appoint them. Repeat annually.
These may seem like radical ideas at first blush. But, frankly, if you are really serious about having people show up at work excited, committed, giving it all they’ve got you are going to have to do something really different.
A version of this article was first written for my column on Troy Media and is posted at http://marketplace.troymedia.com/2015/01/29/5-sure-fire-ways-to-improve-employee-engagement/
CEO Pay Continues to Rise as Typical Workers Are Paid Less. Mishel & Davis, Economic Policy Institute, June 12, 2014.
The War for Talent. The McKinsey Quarterly, 1998 Number 3.
Because it is January, chances are you are frantically trying to schedule year-end performance reviews. The dreaded performance review - quite possibly the most detested HR program ever invented. It doesn’t matter what process, form or technology is in place to accomplish this task, it is always bad. But what if I were to tell you that you can put an end to the madness? It is probably not realistic to eliminate the task altogether (someone from HR will hunt you down eventually), but you can put an end to the dreaded part. I know I did.
Step 1: Focus on performance planning, not performance review
How would you feel, as a fan, if your favourite hockey team showed up on the ice without a game plan. Instead of carefully crafted and well-rehearsed strategies and plays to get the puck in the net, the coach decided just to ‘play it by ear’. That is what a lot of leaders do with their teams. Instead of investing time and energy in crafting well-considered performance contracts that align tightly with business objectives, a lot of leaders leave their direct reports to ‘wing it’ on a day-to-day basis. I have seen large, complex organizations with serious strategic objectives fail to engage employees in anything resembling a robust performance planning process. Each member of your team should have clearly defined deliverables that directly align with your deliverables, which should directly support your boss’ deliverables, and so on. This process takes effort, but at the end of it each of your team members will have a concrete business plan they will use to prioritize their time and performance. They will know what is expected of them and align their activities accordingly.
Step 2: Hold weekly review meetings based on the performance contract
When I took on managing a senior team my coach gave me a piece of advice: hold weekly 30 minute update meetings with everyone. The prospect of that seemed overwhelming to me at the time, but I decided to trust her and give it a shot. While it wasn’t always easy, and sometimes the weekly meeting drifted to a bi-weekly meeting, I can tell you it worked. For 30 minutes each week, team members provided a short and snappy update against their performance plan. Anything not directly related to the plan was dealt with in a separate meeting. What did this accomplish? Focus. Momentum. Timely, relevant two-way feedback. No surprises. Results. My team got the important stuff done. This is what performance management (and people leadership) is all about. More importantly, as a team we knew we were contributing in a significant way to helping the organization achieve results and we felt good about our accomplishments.
Step 3: Watch performance review become a non-event
When formal mid-year or year-end performance reviews were due, it was a non-event for us. Everyone knew where they stood because we tracked this on a regular basis. And because I knew my team were achieving their goals, I knew I was delivering on my commitments to my boss. So instead of spending time arguing about and negotiating performance ratings, we spent our time talking about development and career goals. And that is how you engage employees. Not by handing them a report card like they are still in grade-school, but by helping them paint a picture of their future.
I have many shortcomings as a leader, but performance management is something I was pretty good at. But only because I was intentional in building it into my management routine and relentless in executing against it. So make this the last year you say you hate performance reviews. It’s January, after all. Time to get on that performance planning process.
This month's blog was inspired by a conversation on building organizational alignment with DC, a newly appointed CEO.
Talent On Board: To Increase Board Diversity Requires a Shift in Recruitment Attitudes and Practices
Evidence shareholders are being short-changed by traditional board composition is mounting with every research report linking the participation of women in senior management and on boards to positive business outcomes. In Canada, diversity is being given an extra push by the Ontario Securities Commission’s ‘comply or explain’ policy. Companies will need to publicly release information about how they are promoting and actively managing gender diversity. Board diversity is more than just about rectifying bad optics. It is about getting the best talent around the table. To do that will require more than good, heartfelt intent, which I believe we have a lot of in corporate Canada. Underlying the existing board composition patterns are a set of beliefs and attitudes that drive board recruitment and selection decisions. To change the outcome requires some fundamental shifts in how we think about and recruit board members.
Board Recruitment Attitudes and Practices Help Maintain the Status Quo
Historically, board members have been drawn from the pool of retired CEOs, COOs and CFOs with experience in a similar or related industry and often with a connection to one or more influential members of the board. Board recruitment was, and in many cases still is, informal and personal. The introduction of recruiters to the process has broadened the search, but the ideal candidate profile has remained relatively consistent. The traditional recruitment model poses a number of challenges when the goal is to diversify.
Diversity as a Strategy to Build Talent on the Board
Increasing diversity is more than just good PR. It helps boards and organizations better address key business and governance issues. There is tremendous breadth and increasing complexity in the issues facing organizations today. For example, according to Deloitte, the top board concerns for 2014 included: enterprise risk management, executive compensation, corporate strategy, shareholder activism and sustainability. The Conference Board (2014) identified the top five challenges for CEOs as: human capital, customer relationships, innovation, operational excellence and corporate brand and reputation. While former CEOs will continue to form the nucleus of corporate governance, boards made up of members who bring deep and diverse expertise are probably better equipped to help organizations anticipate, tackle and solve their most pressing problems. Diverse boards bring a more comprehensive collective view, are more attuned to risks and opportunities, and are in a better position to provide guidance and oversight to the organization. When talented people across multiple domains with diverse experience and perspective come together in the pursuit a common objective, good things can happen.
Spencer Stuart Board Index. Spencer Stuart, 2013.
Governance Trends Shaping the Board of the Future: Board Performance and Diversity. Annual Corporate Directors Survey, PwC, 2014.
The CS Gender 3000: Women in Senior Management. Credit Suisse, 2014.
Deloitte Center for Corporate Governance, 2014. www.corpgov.deloitte.com/site/us/board-governance/.
The Conference Board CEO Challenge® 2014: People and Performance. Conference Board of Canada, 2014.
Why Talent Management Investments Generate Poor Returns and What to Do About It: The Recruitment Problem
“Find us someone who will be ready for a VP job in 12-18 months but who is prepared to come in and prove it.” Those in the recruitment business will recognize this request as a growing trend. As demographics kick in and retirements loom, organizations find themselves with talent holes and a lack of ideal internal candidates to fill them. Asking recruiters to find and secure high potential talent willing to make a job change on the possibility of bigger things to come is certainly ambitious. And unlikely to be successful as a talent building strategy.
Why recruiting high potential talent works better in theory than in practice
When organizations have the opportunity to go outside for talent, they take it very seriously. The goal is, always, not only to attract the best possible candidate for a role but to increase the talent pool. Then reality sets in:
Strategies to increase your odds of success
For many organizations, the necessity of using external recruitment to bolster the talent pipeline is a reality. Here are a couple of suggestions to make this a more successful endeavour.
Stay tuned for my next article Talent on Board: How Traditional Board Recruitment Practices Help to Maintain the Status Quo.
The Risky Business of Hiring Stars (Harvard Business Review, May, 2004).
Why Talent Management Investments Generate Poor Returns and What to Do About It: The Retention Problem
In the last issue of The Talent Blog, I talked about how and why organizations with more diverse workforces will have more robust talent pipelines. In this issue, I look at the second of three organizational habits that sabotage the talent agenda: the retention problem.
Organizational Sabotage: Things Organizations Do That Keep Them on the Talent Treadmill
One organization I know looked back at what happened to their cadre of senior leaders identified as high potential - specifically, those ‘ready for a promotion within 2 years’. They found 40% had actually been promoted in the last 3 years. Unfortunately, 58% of those promoted were in more senior roles in other organizations. In other words, they did a fair job identifying potential and a lousy job retaining it. And I don’t think their experience was unique.
Why you have to retain talent
The reality is, many organizations do a pretty good job of recognizing talent but are less successful in retaining it. Since everyone is on the hunt for these elusive resources, if you don’t pay attention they will slip out from under you. Per employee, talent management is an expensive proposition. If you regularly lose 40-50% of those you have already identified as promotable leaders, you are playing an extreme game of ‘catch up’.
Over time, talent will naturally drift to organizations with the best value proposition. And while ‘exchanging’ talent with other organizations may not be the worst thing ever, it is a very expensive way to bolster your pipeline. The only people who win that particular game are the recruitment firms. Solution? Get serious about hanging onto your talent.
What is at the root of talent drift?
A lot has been written about high potential talent over the years. Let me summarize, very briefly. High potentials are defined by two very different predictors of success: past performance and future potential. A high potential leader is someone who outperforms his or her peer group and possesses the ability, motivation and commitment to perform at the next level (Corporate Leadership Council, 2007). You measure these two dimensions very differently. One is relatively straightforward - look back at what they have delivered and compare it to peers with similar tenure and goals. Predicting future potential is the tricky bit, and we’re not always going to get this exactly right. So what are we looking for?
Defining characteristics of high potentials are, in a nutshell: an over-developed drive to excel, a keen ability to rapidly and proactively translate new learning into tangible action, an ‘enterprising spirit’, and an innate sense of timing (Ready, Conger & Hill, 2012). This article isn’t about how to identify talent; it’s about how to keep it when you think you’ve found it. Can understanding what drives away high potentials help us retain them? Looking at their defining characteristics provides some insight.
When demand is great and a resource is in short supply, we need to think carefully about how we nurture and protect it. If the optimistic odds are one high potential per 10 employees, every time we lose one we need a generate a pool of 10 to replace him or her. Or you can steal one from someone else. In my next article I will talk about how and why recruitment as a talent building strategy is a lose-lose proposition.
Stay tuned for the next Talent Blog issue on this topic: the recruitment problem.
Realizing the Full Potential of Rising Talent: Understanding the Identification and Development of High-Potential Employees. Corporate Leadership Council, 2007.
Are You a High Potential? Douglas A. Ready, Jay A. Conger, and Linda A. Hill, Harvard Business Review, June, 2010.
A couple of days ago my dad was updating me on what he is up to. For some time he has been active in his local chapter of a political organization and was just named chair of the candidate nominating committee. And since two of the candidates are current board members and must step down, he was recruited to re-join the board as vice-president. My father is 81. I recount this story to highlight what we are experiencing in every organization and corner of society - a dearth of talent rising through the ranks. My father, at 81, is healthy, quick-witted, competent, organized, diligent, committed and passionate. He will do an excellent job, which is why his colleagues sought him out. But where are the 60-somethings who are going to step in behind him?
Despite huge investments in identifying, hiring, developing and managing talent, most organizations are not jumping up and down complaining they are awash in it. To the contrary, ‘talent’ consistently lands on the top 5 list of issues facing most organizations. By all accounts, we don’t seem to be making much headway in slaying the talent dragon. As one recent survey reports, while 60% of organizations report increased talent investment, less than 25% say their efforts are effective (Mercer, 2013). The critical question is: are we, by continuing to invest in talent management programs and initiatives, simply throwing good money after bad?
I won’t claim to have all the insights or answers to this question. But after 20 years working with and for organizations on the talent dilemma, I have a few observations. The purpose of the the Strategic Talent Advisors blog series is to be constructively provocative. I believe there is a lack of honest dialogue and intellectual rigour in many of our debates on complex organizational issues. I look forward to hearing your thoughts, reactions and ideas on these issues as well.
Organizational Sabotage: Things Organizations Do That Keep Them on the Talent Treadmill
Some organizations have a reputation as talent engines: GE at its peak is an example of a company with a reputation for attracting the best talent, developing talent to a high standard, and regularly pruning its branches to make room for more talent. Fostering talent was a conscious decision on its part. Organizations are failing to win the talent game, in part, as a direct consequence of their intentions, decisions, and actions. Over the next few blog postings I will offer up what I see are some key contributors to talent-building failure and how they might be addressed. Here I look at the first of three organizational habits that sabotage the talent agenda: the diversity problem.
Shrinking the talent pool by limiting diversity
Let’s set aside research suggesting diversity leads to a wide range of positive outcomes and drive it down to a pure numbers game with a little help from our Statistics 101 course. For the sake of simplicity, let’s say there are 2 equally sized pools in the world from which you can fish for talent - the red pool and the blue pool. The law of averages kicks in: all things being equal, the number of ‘talented’ fish will be the same in the red pool as the blue pool. If you only fish from the red pool, you have the opportunity to catch all the talent from that pool. But you will miss the opportunity to catch talent from the blue pool. By fishing equally from both pools, you double the number of talented fish you can catch. The normal distribution curve sets limits on the percentage of a population that is ‘exceptional’ on a trait at <10% of any pool. So trying to get more absolute talent by increasing the number of fish you extract from the red pool won’t solve your problem. The top 20% of the red pool will not be as “talented” as the top 10% of the red pool + the top 10% of the blue pool combined.
This argument holds with human talent, and can be applied to any subset of the population. In general, nature does not discriminate in awarding traits - the percentage of those in the population who possess inherent talent for leadership is the same regardless of subgroup (ie, men, women, aboriginals, people with disabilities, visible minorities, etc.). If you are doing most of your fishing from one pool, you are setting artificial limits on supply and you will never win the war for talent. It is hard to imagine another situation where a business would limit its search for an optimized solution. For example, when an organization looks to borrow money, does it limit its search to three of the big banks or does it scour the market for the cheapest and most flexible source of capital? The selection and management of human talent is probably one of the least strategic and most idiosyncratic efforts an organization undertakes.
We often apply the diversity argument to advocate for change in situations where women or visible minorities are under-represented. But organizations and teams over-represented by women or minorities suffer the same fate - a smaller pool of potential leaders. The only way you can maximize your talent is by maximizing the diversity of your pool.
Winning the war for talent by breaking with the status quo
Intentionally tapping into and leveraging diversity is one way to make significant gains in increasing the availability of talent in your organization. And I’m not talking about the broad, newly-trendy definition of diversity as encompassing all potential points of difference between people (ie, thinking style, life experience, leadership approach). I’m talking about the hard-core categories of human demographics (gender, age, ethnicity, etc.) that, statistically-speaking, have the highest probability of presenting you with more top-quartile talent to choose from.
Strategies for success
Some organizations are well down the path in recognizing the strategic opportunity and competitive advantage diversity brings in the war for talent; for others, it is a work in process. And it is not easy - if it were, we would not be struggling so hard with this issue across so many domains. Many people much smarter than I am on this topic have addressed it at length and developed strong recommendations and solutions for enhancing diversity. I have three suggestions for tackling this issue in the context of building the talent pipeline.
Stay tuned for the next Talent Blog issue on this topic: the retention problem.
Talent Barometer Survey. Mercer, 2013.
My dad, who taught me to stand up for what I believe no matter what other people think, and for proving you are never too old to lead.