Making Your Board Room An Oasis
November 27, 2006 Thomas McLaughlin
Sure, you say. The board room is never an oasis of calm, unless you mean the kind of resigned calm that comes over a normal human being while being mercilessly bored to tears.
For most, the board room is an oasis only of enforced silence that spreads over the poor unfortunates who gather on the third Wednesday of every month to re-learn lessons of passivity and delayed reactions.
But a good board room is an oasis of calm, at least of the conceptual variety. A good board room atmosphere is not rushed or cramped, but instead allows participants to go on journeys of discovery and learning. If that sounds hopelessly naïve, consider this simple observation: most good boards of directors operate with a deliberate and unwavering orientation to the long-term. If there is a single prescription for effective board functioning, that’s it.
Let’s look first at what causes dysfunctional board meetings. The biggest wrecking ball is sheer boredom when executives spend most of their time talking at the board. This promotes passiveness and encourages members to disengage. Why? It’s because this approach is the complete opposite of what makes for effective board meetings — it forces everyone concerned to operate in the past.
In most cases the decisions have already been made or the directions have already been taken and it’s too late to do anything about it. Board members could be forgiven for quietly wondering why they’re hearing about all this if it’s a done deal.
The next most common denial of a long-term orientation is the decision which absolutely, positively must be made tonight. Boards are a form of task group, and task groups are usually not good at turning on a dime. Except in the case of a genuine emergency, there are only two reasons why boards absolutely must make a decision by a firm deadline: either it was not an appropriate decision for the entire board to make in the first place, or it is an appropriate decision that was brought to them too late. Either way, the long-term orientation has been violated.
Another familiar complaint about boards is micro-management. This is a perfectly accurate and revealing phrase. The board’s job is leadership, not management. These two types of tasks each have their own proper time frame. Managers must have a relatively short time frame — usually, somewhere between tomorrow and six months from tomorrow. Leaders’ time frame should be measured in years, not months, so if the board gives up its leadership role in order to manage the management, who is left to focus on the long-term?
Orienting one’s self to a long-term time horizon of five years or more is really a form of intellectual discipline. Orienting the board to a long term like this makes it easier to craft a strategy. In fact, it practically demands a strategy since that’s the only construct that can make sense of such a long time frame.
The primary benefit of a long-term orientation to the leadership task is that it makes challenges look like they’re coming at you in slow motion. You can see the steady growth in consumers before it actually happens.
The erosion in your financial base is easier to understand when you see it evolve over time. When one can extrapolate trends as emerging month by month and year by year, it’s easier to spot patterns as they occur. What would seem like a crisis five years from now will look more like the inevitable conclusion to a long run-up. Replaying the future tape may also give some insight into how to prevent the problem from even occurring.
A strong commitment to seeing things in future terms tends to keep boards from looking backward, or from becoming consumed in today’s minutiae. Boards make these kinds of mistakes when they see their primary task as being supervisory rather than providing strategic leadership (some level of supervisory activity is inevitable, but it’s incidental to the main role).
Combine the mistaken perception of a primary supervisory role with some management teams’ tendency to create passive listeners and it’s easy to see how a board could degenerate into nitpicking and trivialities.
The practice of management is like a game of Whack-a-Mole, that carnival favorite featuring a big rubber mallet and a board full of holes through which mechanical moles poke their heads and then zip back down.
At the beginning of the game only one or two moles pop up, but by the end of the game they’re popping up everywhere and the poor player can’t possibly whack them all. The sheer numbers are overwhelming, and no amount of skill or speed is enough. Many managers feel like they’re already losing at Whack-a-Mole by 9:45 a.m. every day.
Here’s the hard truth: managers get paid to play Whack-a-Mole. Their success is measured by the number of moles they get others in the organization to whack. The more problems whacked — or prevented — the more productive they are as managers.
But Whack-a-Mole is the complete opposite of a long-term orientation. In Whack-a-Mole, the future looks like the next mole — or problem — and it’s always just a nanosecond ahead. When does the manager ever get to the really big things that matter?
The answer is that he or she never does, as long as they stay in that frame of mind.
That’s where the Board Room Oasis comes in. This is the place where time slows down, where the mole problems float upward instead of popping up, and where nothing needs to be done with split-second timing. Causes and effects are clearer in the Board Room Oasis, and most crises are accurately seen as temporary distractions.
In the Board Room Oasis, the focus is on ideas, not personalities. The discipline of thinking in the long-term permanently shapes all dialog. Performance is measured in years, not quarters or weeks.
Why aren’t all board rooms oases of calm? It’s because Whack-a-Mole is fun. It’s fast-paced and it’s all about getting things done. Board members want very much to do the right things in their roles, and they gravitate to what they know best, which is often their own version of the mole game. But a board and a management team that whacks problems together is asking to be whacked by an unseen change in their environment.
Make the board room a place where the smallest unit of time is six months. Evaluate every item that seeks a spot on the agenda by whether it helps shape the future or simply ratifies something that already happened. Use the oasis to anticipate crises, not to resolve them. Relax and think long-term. This is the Board Room, Oasis of Calm. No moles in here.