By Mike Stenhouse
I am privileged to have spent many years working with a wide variety of Boards as they recruit a new Chief Executive, and with established Chief Executives, supporting the Board during the annual performance review process.
We have all heard comments that appointing the CE is the Board’s most important job. I would add that managing the relationship with the Board is the CE’s most important job!
Many aspire, yet few are ever appointed, to a CE role, and I often reflect on how unprepared some are for such a critical role.
Fundamentally, we know that most senior executives will have received years of development, mentoring, and coaching on how to be better leaders. However, how many are prepared for the challenge of working with a Board …. their “critical friend”.
So, what have I observed ….
Managing up and out. Chief Executives who succeed both trust and respect the value that an effective Chair and Board can add, and approach this with an open mind. The relationship with the Chair is arguably the CE’s most important one. Understand that the Board, as a “critical friend”, is there to challenge and support both you and your team to succeed. A key task for a newly appointed CE will be to quickly understand the Boards view of the business, what they see as the critical issues, and why and where their priorities lie. Remember each member will have their unique view of the big picture.
The policy of “no surprises”, sharing views on risks and issues is fundamental to the relationship.
Also, don’t forget that the Chair and Board will have a view on the performance, capabilities and potential of the senior team, your “bench”. Take all that on board. Of course, there will always be the “don’t know what we don’t know”, but many CE’s have failed by ignoring the Boards view of the senior team, before making, or not making, changes.
Boards have their own culture. Every Chair has a unique style, and Boards have their own rhythm by which they work both formally and informally. Take the time to get to know the Board team, their issues and concerns, priorities and what their expectations and needs are.
Understand what they like and don’t about the reporting and information flows and how they seek to engage with you formally, and informally, between meetings.
Don’t be afraid to change …. but not too fast. Obviously, there are exceptions to this if circumstances demand, for example, a crisis is underway. But generally, the expectations are that a new CE will take the time to look, listen and consider before recommending any major changes, especially when it comes to the senior team.
Understand that on occasion a Board view of the competence, or otherwise, of a senior employee may not be what you see and experience. It is critical that you share your observations and plans for any changes with the Chair, and ideally the Remuneration & Appointments Committee, well ahead of initiating any change.
Remember you will be the biggest fish in the fishbowl, and everyone will be scrutinizing every move you make. Have a plan for your transition into the role, take your time, and stick to it as best you can.
Don’t overlook the opportunity to spend time with key customers and stakeholders at an early stage. They will have important views to share of their experience with your organisation, good and otherwise, and the first few months is a great time to seek their feedback and act on it.
Agree on True North. It’s important not to be compelled to make commitments too early, that later you find can’t or shouldn’t be delivered on. Having spent time “lifting the carpet” and getting an understanding of expectations from the Chair and Board, talking to those outside the organisation and the senior team and staff, I often see CE’s present a “State of the Nation” to the Board. This is essentially a snapshot in time of where the organisation is currently positioned. It will summarise what the Board and senior team will know, but maybe haven’t shared, and often a lot that the board hasn’t been aware of, about what is in good shape, as well as any issues, risks and concerns. Essentially this will get everyone on the same page understanding the issues and ready to move forward.
I always feel this is a useful exercise before drafting the first Annual Performance Agreement.
Focus on a few big priorities, no more than 6-8 short and medium term, that will move the dial towards success, and make sure that this is signed off by the Board. This will give you the mandate and blueprint to work with the senior team on the plan ... and don’t forget to build in a process for regular reporting and updates to both the Chair and Board on your agreement.
Mike Stenhouse is the Executive Director of Sheffield South Island and has extensive experience working on Chief Executive Reviews, Board Appointments, Board Effectiveness Reviews, Executive Search and Selection and Organisational Development projects.
He has undertaken numerous Director, CEO and Senior Executive selection projects including the appointment of Chief Executives to a wide range of organisations.
Mike works across industry sectors including local government, finance, agriculture, not-for-profit, education, manufacturing and export.
Mike can be reached at www.sheffield.co.nz