Board Effectiveness - How to make your board effective

 

Transcription:

Hi, Vijay Mistri here. CEO and founder of Rentadirector, author of multiple training programs which have a green light status award from the UK trade and investment and our purpose is to see leaders, entrepreneurs, business owners, directors, executives, and managers achieve standards of excellence in everything they do and scale up their businesses with ease. Now my dear friends, today I want to talk about board effectiveness. Now it doesn't matter whether you're a small, medium, or large organization in any sector, this is about stepping up the game, this is about taking you to another level altogether and I believe that there are certain common patterns of challenges many face. So, let's deep dive straight into this particular training. Now I just want to tell you in advance that after this training, there is a program which I’m going to talk to you about which we have on Achieving Boardroom Excellence. So, I’ll be sharing some insights on that particular program but for now, let's go straight into board effectiveness, and as I said, there are many challenges out there, to begin with.

I have seen many businesses having these challenges and I wanted to share this with you, just to see if there is any reflection of these challenges perhaps in whatever outfit you have.

The first is lacking direction. Now here is a question for you. How many times have you sort of stepped back as a board or as an executive team? How many times have you stepped back and really got a grasp of the clear direction, the navigation path, the specific point of destination? In other words, the purpose, the vision, the values are critical to have for you to have. Unfortunately, this is missing in many organizations. This is one of the key components which is missing which is draining and which is suppressing the growth of the organization.

The second which is common in many instances I have come across and that is hubris. This is about having this self-confidence and it is about arrogance as well. It is about one or two of the directors really taking over the whole conversation. Now I do not know if you come across this, but this in itself is detrimental to the success and to the sustainability and growth of an organization. In one instance I remember, it was a manufacturing organization, and I attended the board meeting. I was a board advisor and what happened is, is that there was one director who was taking over the whole conversation. He was suppressing the rest of them and here is what happened. After the board meeting, I asked one of the other directors how she found this particular meeting and she said that I felt intimidated. I could not contribute as well, so this is a key bottleneck in many businesses.

A third one which is particularly important is minutiae. Going into discussions which are management level rather than the macro level. So, you see where I am coming from, it's not the 50 000 feet discussions or the really core material long-term linkage discussions taking place. They end up into minutiae and this is a key challenge that I have noted.

Another problem is the lack of getting the right information at the Board level. Not having the right amount of information, in fact not even having a constructive format to see how you can pick up forward-looking signals. This is a key problem, and I am not talking only about the financials but about the whole concept itself. In fact not even condensing and simplifying the information as well. Another challenge is unprepared. I have noted sadly many directors come into meetings unprepared. They have nothing much to contribute and what they contribute is not well prepared. It does not really add to the effectiveness and the growth of the organization as such.

I have just hand-picked a few of these challenges and perhaps you could reflect some of these with your outfit.  

Let us now shift gears and I want to go into how you can drive board effectiveness and here's one thing that I want to share.

Think of a koi fish. Now if you put a koi fish in a fishball what is going to happen? The koi fish is going to grow only one inch or two inches, but if you put the same koi fish in a river what is going to happen. The koi fish is going to grow 12 inches - the same koi fish and here is the thing, it's about your capability, it's about stepping up, looking into how you can really evolve and step up the game. Take the example of Michael Jordan. I’m taking a random example here, but Michael Jordan keeps on stepping up his game, when he was playing basketball his competitor was himself, his competition was himself. So, my point here is you need to step up, you need to evolve, you need to build up into your capability and how do you do that? You need to make sure that you ask the right questions.

This is where I come to the second point, which is so powerful. If you get this, it is going to change the way you do your business and the trajectory and the growth. See if each director can take 50 minutes think time. Now I’m not talking about a board setup itself, but they need to chunk out time in their diary, preferably every week or every two weeks. 50 minutes just on that particular company on whatever board they are serving. Now you could be an executive director changing hats obviously if you are at the board level. In other words, you would be a board member when you're in a board meeting and you could be an executive when you are just doing the operational activities. Here is the thing, you need to make sure to take 50 minutes and figure out how can you really add more value. There are different components of value you need to look into. You need to investigate the whole aspect, the holistic aspect itself, and break down the value components. Everybody says that we are adding value shareholder value, owners’ value, but what do they really mean? You need to go into the granularity of the value. It's intangible value as well as tangible value. What is it that you are really contributing towards? How is it really making an impact on the stepping up of the game as far as your organization is concerned? This is so powerful I call it white space. So, 50 minutes of white space every week is going to completely change and shift the way you do your business. It will even help you to be well prepared. You will have the information, the insights, you'll be well prepared, and you'll be able to contribute better as well.

The third is financial signals. Now this is basic and common. As many would have fancy financial dashboards and you would have all the insights and the KPIs and the measures in place. But here is the thing! I want you to take it a step further. How do you do that? You need to connect with the external environment as well as investigate the landscape. What is really happening and how are the measures benchmarking with the rest of your competitors. That is going to make an impact. It is just not about looking at it with a tunnel vision, the financials itself, but trying to interpret and see what it means. How is it really performing with the outside landscape as such? ( you need to even be careful of the threat of new entrants). We are in the year 2021 with technology coming in. What does that really mean to your business? How is it really going to grow and evolve and have that advanced level of forward-looking financial signals? How are you going to get those, so you need to really structure and work on forward-looking mechanisms?

Another key element and I press upon this is leveraged priorities. Look into the priorities which are leveraged and again simplifying it, use the 80/20 principle. What is that 20 percent which is making the 80 impact when it comes to your board? What are those elements in your agenda which are going to drive more growth and you need to really work as a team? Synergize and work on that 80 percent. So how do you really do that - is you need to really step back. In fact, go on a retreat. Go on one day retreat or whatever you can and have those breakout sessions and figure out exactly what are the core leverage drivers. Peter Drucker said that business is made of two things, innovation, and marketing. You need to really look into your business model and figure out exactly what is it that you are missing, what are the gaps identify those, and pick up on the leverage drivers and I promise you it's going to really make a profound impact on your business.

Finally, if there's one thing I press upon you to consider is to empower others to contribute. Now at certain times you might empower somebody to contribute and he or she will start going off tangent, talking about their expertise but you need to really have that focused mindset so that you can really ensure that the discussions are towards driving growth for the organization and this requires a lot of training. It requires a lot of nurturing; it requires a lot of shifts as well within one's behavior patterns and the way they contribute. It's very important to unlock everybody's capability and potential at that board level.

I hope these drivers will help you to see a different dimension when it comes to board effectiveness. Now here is an opportunity I want to share with you. I want to go a hundred times deeper with you and this is why I’ve got this cutting-edge program. Here is a link to the training program:

Board Effectiveness Program

 

Close

50% Complete

Two Step

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.