Playing To Win
How Management Can Most Effectively Utilize Boards
The Four Rules
In response to How to be a Good Board Member, a longtime reader and prompter of good article ideas suggested doing one on the opposite side, which is how management can get the most out of its board. I love the idea and do exactly as he suggested in this Playing to Win/Practitioner Insights (PTW/PI) piece on How Management Can Most Effectively Use Boards: The Four Rules. All previous PTW/PI can be found here.
The Importance of Balance
The key for CEOs and their management teams to get value for their boards is balance — which is hard to achieve in this context.
The inclination for management teams is to be servile with respect to the boards. They are your boss after all. They hire, fire and compensate the head of your team, the CEO. A manifestation of this servility is that management teams tend to believe everything needs to be put on a silver platter for their board. Management teams spend thousands of person hours on creating presentations for their board because they want to be perfect for their bosses. I have written previously about how this doesn’t produce the result for which management teams wish. Were it to be perfect, there would be no useful role for the board, so they tend to engage in what management teams feel is unhelpful nitpicking.
While management teams need to show respect to the board, they need to balance that with assertiveness. It isn’t the board’s company. Much as boards might wish that they can make the company successful, they can’t. They are just too part time. They can make a real and important contribution if and only if management teams use them effectively. That is why management teams need to take responsibility for putting their boards productively to work — even though boards are putatively their boss.
The Keys to All Jobs
If effectiveness depends on putting boards productively to work, management teams need to understand the keys to all productive jobs. To produce effective outputs, a job needs to be doable and interesting for the person holding it.
First, if it is undoable, the person given the job will do something doable instead. How many times have you given someone a specific task and the person comes back with something entirely different than what you want? Your assumption probably is that you didn’t explain well enough exactly what you wanted. Nope. The person understood exactly what you wanted, knew they couldn’t do it, so did something doable and hoped that since they did something, you wouldn’t be as mad as them as if they didn’t do anything at all.
If you give a boy the job of getting A grades at school and he comes from an impoverished, broken family without a consistent housing situation and zero nutritional security, he will choose another job — and it may well be selling crack on street corners for a gang. That is because you gave him an undoable job. The boy won’t tell you upfront that you gave him an undoable job. You will only find out much later — and probably blame him.
Second, if the job is uninteresting, the person will figure out something interesting to do instead. If you give your kids the job of sitting quietly in the back seat of the car while you drive four hours to your in-laws, they will make up a more interesting job: bugging the hell out of you! That is why many employees of many companies are online checking out social media for much of the day. Their jobs are not interesting, so they do something more interesting to them instead. You will be inclined to blame them, as and when you find out much later what they have really been doing. But it is only partially their fault because you didn’t think about whether the job would be interesting to them and, if not, how to make it so.
Boards versus the Keys to all Jobs
Management teams generally give their boards ill-constructed — in fact pathologically ill-constructed — jobs. The most frequently occurring job is: “Please listen to our lengthy and extremely finely tuned PowerPoint presentation with a carefully edited speech-track delivered by the CEO or other management team member, and at the end, please nod to signify your approval.” Often, what is asserted up front is “We want your feedback and commentary.” But that is generally of zero interest to the management team — and that is signified by the long PowerPoint presentation with precisely worded speech-track.
That is a profoundly uninteresting job for board members — and should be. Board members who find that job interesting provide prima facie evidence that they shouldn’t be on the board in the first place. Typically, board members choose to perform a slightly more interesting job, which is to nitpick the presentation: “Have you thought about x? What about y? Shouldn’t you do more thorough analysis of z?” The management team generally finds this nitpicking to be both useless and frustrating because they want the board to do the intended job and nod approvingly. But it is a stupid job.
The second most frequently occurring job is to opine on something about which they don’t have much if anything to contribute. Occasionally, a management team is genuinely perplexed and flummoxed by an issue — these days it is Artificial Intelligence (AI). In these cases, management teams typically give the board a job like: “How should we think about AI in our business?” Or “Here is how we are thinking about AI; what do you think?” This is almost always felt by board members as an undoable task. They are not on the board because they are the uber-expert on a topic that flummoxes the people who spend 50–100 times more time on the subject than they do.
Maybe if management is lucky, for one board member it isn’t an undoable task. But for the rest of the board (or all), the tactic is to turn the task into a doable job and criticize the process not the content: you should have done more thinking; you weren’t ready to come to the board yet; you should create a task force on AI (or whatever the topic du jour is); whatever…
Four Rules for Promoting Board Effectiveness
I use the following four rules when helping management structure productive board interactions.
1) Design Doable Jobs
Make sure any job you give them is doable. It may feel that since they are so very senior, any job is doable for them, but it just plain isn’t. To give an example, one of my clients was facing a huge and important technological revolution in its industry and had prepared a super-long, super-technical presentation on its ‘strategy’ for handling it. And the associated question for the board was: “Do you think this is a good strategy?”
That is a classically undoable task. For starters, no one in the world knows how this technological innovation is going to play out in this industry. And the board members, despite how smart they may be, aren’t among the leading thinkers in this technology. So don’t ask them that question — unless of course your intention is to try to make them feel stupid, which itself would be a stupid intention.
Instead, I helped the team reframe the question for the board. “Each of you has seen technological discontinuities in your business at one time or another. Please think of the things that in retrospect you wish you would have known going into that discontinuity and the things you learned going through it. Then consider what we have put forward as our thinking on the discontinuity we are facing and give us your thoughts on what you liked about what we have included in our thinking and, importantly, what we might have missed and could productively integrate into our perspective.”
The management team was worried that this would be problematic. Some thought it made us seem too vulnerable; others thought it was presumptuous. But the team did it. The board reaction was that it was the most productive board discussion on any topic that they had ever had, and management was thrilled with the feedback and ideas they got on a very tricky topic.
2) Design Interesting Jobs
Give them jobs that they will find interesting. “Do you agree with the conclusion of this 100-page PowerPoint” is definitively an uninteresting job. It is profoundly uninteresting because they know that there is only one answer that you want — Yes.
On this front, use the Golden Rule to your advantage. Would you want that job? Hell no. Well, then don’t give it to someone else. Test every job that you consider giving them with the question: “Would I want to do that job?” If the answer is no, scrap it completely and start from scratch. If the answer is maybe, think of how you can refine it to make it an interesting job. If you give them interesting and doable jobs, they will do them with enthusiasm.
3) Design Jobs the Output of Which You Actually Want
Never ask the board for its opinion on a question for which you don’t actually want the answer. For example, never ask “do you think we should do x” unless you are happy with both answers yes and no. That is because once the board has opined on something, not following their advice is considered insulting to them — and should be. Because they have opined specifically on a point, you have to do as they say, or fight about not doing it. Don’t put yourself in that position. On their own initiative, they will opine on things with which you disagree and with which you will have to deal. Don’t add to the list unnecessarily.
4) Design Only Jobs for which Most Board Members are Capable
Sometimes, I get the pushback on my view that management is 24/7 and board is part time when there is a super-knowledgeable member of the board with deep and impressive subject matter expertise on a particular topic. I get asked: “When that is the case, shouldn’t you come to the Board with questions addressed to that expert?”
No. Again, use the Golden Rule. If you were the other (say) dozen board members listening to the back and forth between management and your one board colleague, how would you feel? Useless — and annoyed. They want an interesting job and listening to a conversation while adding zero value isn’t an interesting job — at all.
If you have such board members, they aren’t really acting as a board member, they are a subject-matter-expert (SME) consultant. Use the individual one-on-one outside the board context and incorporate the learnings into what you take to and discuss with the board.
Practitioner Insights
When it comes to getting the greatest productivity out of your board, regardless of whether it is a tiny company, a giant company, or a non-profit, you need to strike a balance between servility and assertiveness. Biasing toward either side is a danger. Being too servile won’t help the board figure out what would be most productive for you. Being too assertive will signal lack of respect for the board’s position and seniority.
Follow the four rules. Give them board-wide jobs that are doable and interesting for them and are jobs you actually want them to really do. When in doubt, use the Golden Rule as your guide. Imagine yourself in your shoes and ask whether you would want the job you are giving them. If the answer isn’t a resounding yes, slam on the brakes and go back to the four rules.
If you balance servility with assertiveness, and follow the four rules, you will achieve effectiveness of your board at the 90th percentile or above — because most management teams violate most if not all four rules on a regular basis.
