Leadership for a New Decade

Why we need it . . .

In last month’s lead article I argued for a different style of leadership for the governance role than for that of management. I claimed that there are three essential differentiators where successful governance will distinguish itself relative to ongoing management practice –

  •     the ascendancy of wisdom over knowledge,
  •    a focus on the engagement of organizational (and individual) strengths, and
  •    a solutions / outcomes emphasis.

While I hope I made it clear that there are substantial overlaps between governance and management and that the roles should collaborate on many, if not most, leadership issues, I may have inferred that the ‘differentiators’ mentioned above are of primary concern to governance, perhaps at the expense of management.

Such was not my intent. Management needs to be as focused on wisdom, strengths and outcomes as Board members. However, they may well need to handle these differentiating factors differently. May I explain by use of comparisons and contrasts?

A Matter of Wisdom . . .

Wisdom could be defined as a level of situational awareness and insightfulness that allows us to understand what is possible, appropriate, applicable and attainable and why this is so. It permits us to assess and quantify / qualify associated risk and to set reasonable goals, standards and other expectations. Some call it ‘common sense’ but then, as my sainted Scottish aunt used to tell me, the trouble with common sense is that it’s not very common!

Wisdom is aligned with superior judgment and discernment. It helps us to differentiate options, apply proper weightings and priorities and to make relevant comparisons. It is based on both fact and opinion and encourages a good degree of subtlety in our considerations. Finally, it enables us to think outside conventions.

In the Board’s leadership role it would use wisdom to explore possibilities, expand horizons, foresee consequences and potentials, anticipate obstacles and evaluate possible risks. The applications are expansionary and ‘divergent’ as possible futures are considered and their merits or otherwise are assessed; this is largely an objective process.

In its oversight role the applications are different, encompassing understanding, empathy, patience, resilience and significance and also duty, diligence, prudence and accountability, all relative judgments and a more subjective approach. These are exceedingly complex and volatile issues and are difficult to manage in the light of resident biases and predispositions; for this reason we rely heavily on a Board’s collective or consensual deliberations.

For Management the focus is on implementation and execution of broader objectives and restraints that are set by the Board or dictated by ownership directly. Management operates within a predefined context so it works with more structure. This means that expected results can be specified and agreed as specific outcomes with crystal-clear standards - quality, quantity, timing and cost.

Since all involved in the process are able to visualize the end goal from the outset, attention can shift to how the outcome might be attained and this process could be described properly as ‘convergent’. However, Management may choose to use wisdom for intricate and complicated leadership decisions.

Simple decisions can be rational and reasoned, but more complex decisions, where there are many variables,  demand insight and judgements which are often based on prior experience. So, Management will tend to use wisdom whenever rationality breaks down; where there are too many variables to consider; or where there are unknowable complexities.

In risk assessment particularly there are sizeable overlaps between Board and Management roles; Management likely has detailed and up-to-date intelligence that pertains while the Board has greater objectivity, perhaps broader experience and a deeper appreciation of impact awareness. In such situations, a melding of perspectives and perceptions is highly desirable.

A critically important point however, is that there needs to be a clear and visible separation of perspectives and perceptions between the two bodies; the two realities cannot be too aligned or there’s no leverage. In the absence of such independent leverage essential and considerable value would be lost, and, in this regard, there’s need to recognize the difference between collusion and consensus.

Strengths and . . .
Generally strengths have been under-rated by both Boards and Management. If cognitive competencies are the acquired knowledge, skills and experience — in short, the ‘way’ power to get the job done — then strengths or passions are ‘will’ power, the motivating energy.

But it’s so much easier to define, detect and measure cognitive competencies, and because their acquisition involves much ‘sweat equity’ we are likely to value them more highly. Strengths, especially those which are inherent versus those which are acquired, are not always apparent or demonstrable except through direct experience. As a result, we’ve traditionally hired people for their ‘head’ (cognitive competencies) and then subsequently had to fire them for reasons connected with ‘heart’ (passion or lack thereof).

An analogy I like to use is that our strengths equate to the engine of a car, while our cognitive competencies are the transmission and our behaviors/actions are the wheels. This fits well with the relative roles of our unconscious mind versus that of the conscious or rational mind. We tend to be driven more by our passions and controlled more by our rationality.

Obviously the two minds need to work together and preferably in a synchronous way; doubt, confusion and inconsistencies in action are not particularly business friendly. Since our ‘two’ minds have significantly different scopes, work using different processes and at radically different speeds, this synchronization is difficult to manage deliberately. In the hands of a skilled driver, one who knows his or her vehicle intimately, the meshing of gears is less of a problem but, generally, we’ll manage it best if we allow for an automatic transmission to operate.

Most of us do not know our minds or how they work; we can’t find our User’s Manual! We need to take the time and make the effort required to achieve mastery – or at least some reasonable competency. Self awareness is the one approach that works to accomplish this yet this can elude us until we’re manoeuvred into a situation where we are obliged to learn the lessons needed. In my experience these lessons will be repeated until we have learned them!

Whether we are Board members or Management though, there’s a pervasive and overwhelming temptation to stay on familiar, comfortable ground – where we learn very little about ourselves. We really need to know our self and particularly our strengths and passions lest they manage us instead of the other way around. Progress in this area is often made in the form of ‘aha!’ experiences or insights and also when we are stretched beyond our normal expectations.

We will always profit too, if we both recognize and engage the strengths that others have to offer – a collective approach. So, for Board members and managers alike, self awareness is a foundational requirement for success; and self discovery is usually so very exciting.

. . . Outcomes
If there’s relatively little variance as Board members or managers in how we engage our inherent strengths to advantage there is certainly a substantial difference in how we perceive outcomes. Indeed, it’s this singular difference that spawns the real value of having these two distinctive roles contributing to the same organization.

One traditional perspective is that Boards need to have a longer-term focus while Management focuses on more immediate responses – but this is simplistic. It’s likely more appropriate to say that managers need to think forward from wherever they might be at the moment, to predict market responses to current initiatives and to anticipate possible opportunities and consequences.

Board members, on the other hand, can deliver best value if they work from the future, identifying outcomes that are realizable and safe yet also unique and stretching, that will take the organization to where it could be. To achieve this, potential ‘futures’ have to be created, assessed and designed in such a way that Management are able to implement them, so the Board has to be able to think from the future back to the present.

There’s more to outcomes than just the timing though. Outcomes have to be matched to realities – to market needs, quality and quantity standards, to regulatory demands, technological possibilities and to cost restraints, among many other criteria. The issues center not only on practical concerns but on ethical, political, social, and perhaps even upon philosophical issues too. There's a call for ‘judgements’ here which can be expressed mainly in the wisdom dimension.

Again, for Board members the need is to deal effectively and efficiently with uncertainty — to take a more subjective approach to the issues. There are usually extensive variables which make rationality a challenge and, at the same time, reliance on past experience in all its diversity is a clear advantage.

Management has the task of creating new ‘realities’, achieving expected results through the intelligent application of resources and standards. Often managers are beset with the same need to juggle multiple variables but usually with a view to taming them — bringing them under effective control. Outcomes for the Board can be speculative and sometimes imprecise; for Management they are practical, tangible, measurable and definable.

The Bottom Line . . .
Board members and managers require wisdom, strengths and outcomes in good measure. There may well be strong parallels in the application of strengths, individual and collective, but there are significant differences in the other two areas, sufficient to warrant separate perspectives, perceptions and unique strategies.

It’s not contested that experienced managers can become contributing Board members, and there’ll always be a role for the executive director, but it is also clear that the same practices that led to Management success will not automatically create success in a governance role. We need to make conscious changes.

This isn’t such a strange idea though; we’ve encountered it on several occasions in our respective pasts — like when we make the transitions from suitor to spouse and from spouse to parent. As we do so, we don’t surrender all that we were, rather we fold our proven competencies into our emerging awareness — we grow and develop.
As the role changes, so must the strategies we need for effective performance.

Think about it!