Behavioural Realities of the Boardroom

1. Behavioural Realities of the Boardroom Jon Stokes

2. Behavioural Realities of the Top Team • Group Behaviour – Groups & Teams • Personality • Emotional Intelligence • Leadership styles • Organisational Culture • Evolutionary psychology • Implications for Top Teams and Boards

3. 4 Fundamental Tasks of the Board • Accountability • Policy Formulation and Foresight • Strategic Thinking • Supervising Management

4. Different Board Styles High Concern for board relationships High Low Low Concern for board tasks

5. The Working Board Model : responsibilities CONFORMANCE PERFORMANCE • Accountability • To owners • To regulators & legislators • To other stakeholders • Ensuring directorial audits • Policy Formulation • Stating purpose • Creating vision &values • Developing corporate climate • Monitoring external environments EXTERNAL Chairman & Board The Thinking Board Chief Exec. & Management INTERNAL • Supervising Management • Overseeing management performance • Monitoring budgetary control • Reviewing key business results • Competencies of employees • Strategic Thinking • Positioning in changing markets • Setting corporate direction • Reviewing & deciding key resources • Deciding implementation process SHORT TERM BOARD PERFORMANCE LONG TERM BOARD PERFORMANCE

6. A board should be selected, trained, developed and appraised on their directorial abilities to: • formulate policy and so give foresight • think strategically • collect accurate external and internal data • generate imaginative ideas • be capable of open questioning and critical review • be rigorous in risk assessments • be collegial in strategic decision-making • learn systematically from their directorial strengths and weaknesses • ensure organisational capabilities for successful strategic implementation • ensure rapid feedback for honest information on the implementation of the strategy

7. Unique Issues in Executive Teams Bloated Membership Blind Ambition Executive Moose Centrifugal Force Ambiguous Roles Dancing Bears Potential Actions to Deal with the Unique Issues Design Teams Creatively Manage Succession Dynamics Create Conditions that Promote Openness Reinforce Team Identity Clarify Team Roles and Processes Leverage the Agenda

8. Work • What it is you are accountable for • The What by When • Work starts with something that is missing • Work evokes emotion and anxiety • Work needs to engage us emotionally to be meaningful

9. Working assumptions • All organisations now work in an environment of continuous and turbulent change • How organisational leadership responds to this is a central determining factor of organisational effectiveness and success. • Pressure for companies to deliver short-term has resulted in a lack of commitment from employees and the overuse of financial reward as the primary motivator.

10. Complexity a common factor- dealing with multiple constituencies • Shareholders • Customers • Employees • Communities • Society

11. 3 Fundamentals of Leadership Awareness of the Whole • To be effective in organisational settings, people need an awareness of the whole, and to see reality from as many points of view as possible; they need to have information available which disturbs and refines their perception of reality and to be able to express reality as they see it. Connectedness • Secondly, people need connectedness to others they are engaged in a common endeavour with, at the level of the heart, of the intellect and the spirit. The quality of relationship between human beings largely determines their ability to work together. Alignment • Thirdly, human beings need alignment around a common purpose, strategy, plan of action, set of values and approach to working together to make the best of their combined energy and capabilities.

12. Psychological characteristics of the board and top team • Emphasis on performance, conformance and competition • Results oriented - wanting right answers quickly • Fear of looking incompetent or foolish, fear of mistakes - fear of not knowing • Atmosphere of mistrust, competitiveness, being too open - makes you vulnerable to the predatory ambitions of others (colleagues, owners, subordinates) All can mitigate against effective decision-making and judgment which requires a combination of cognitive and emotional intelligence.

13. conceptual and technical skills § § collaborative skills § energy and ambition § self-presentation § inside-outside vision § strategic thinking § empowering § coaching & mentoring § § Typical Leadership Competencies at Different Career Stages Executive Level making decisions without full information analysis and planning § Mid-Management Level organising and decision-making § influencing and networking § achievement and drive § politics & teambuilding § First Supervisory Level implementation skills

14. Person - Role - Task - Organisation ROLE • Accountability • Authority • Resources PERSON TASK • Capability • Life/Career Stage • Motivation & Values • Personality • Output • Processes • Rewards E n v i r o n m e n t ORGANISATION • Purpose • Strategy • Structure • Culture

16. Visible Individuals Words Behaviours Conscious Invisible Group-as-a-Whole Feelings Meanings Unconscious The Visible and the Invisible Group

17. Group dynamics are the result of many factors • Competing interests • Difficulties and frustrations in the way of progress • The pressures of the external environment • Different personalities different needs • Fear of ‘destructive’ differences • Fears of loss of individuality and ‘merger’ and more……….. • So, effectiveness is a balancing act

18. The Group needs from the Individual: Commitment Acceptance of norms Role behaviour Acceptance of authority structure The Individual needs from the Group: Belonging Influence Achievement Containment The Tensions between the Individual and the Group

19. Life in a group is a balancing act • Individual vs. Role • Task/Output vs. Process/Getting there • Being an Individual vs Merging into the Group • Sub-groups vs. Whole group • Internal Environment vs. External Context

20. Group Dynamics – Some Themes • Inclusion vs Exclusion • Conformity vs Diversity • Individuality vs. Merger • Dependency Cycle: Dependence-Counterdependence-Independence-Interdependence • Intimacy vs Distance: Over-personal vs. counter-personal • Safety vs Risk • Competition vs. Collaboration • Leadership vs. Followership

21. Work Group aim is to complete a specified task purpose is explicit structure and roles are there to further the task, individuals judged on their competence at the task leader is not the only one who has skills and leads as long as his/her leadership serves the task of the group members operate as separate and discreet individuals Basic Assumption Group aim is to preserve itself and alleviate the anxieties/satisfy the needs of its members purpose is tacit, operates on an ‘as if’ basis individual judged not by skill but by willingness/competence to enter into the b.a. leader is subservient to the group’s needs, constantly seduced by group away from its task individuals regress, relinquish independence and freedom of thought/action In every group ‘two’ groups are present - the Work Group and the Basic Assumption group

22. Work Atmosphere of ‘industry’; Group constantly tests itself in a scientific spirit. Orientation is external and reality guides Learns from experience/ mistakes Members belong by conscious choice and work to the agreed purpose of the group Its seeks for knowledge, learns from experience, and constantly questions how it may best to achieve its goal. It is conscious of the passage of time and of the processes of learning and development. Basic Assumption Group Atmosphere of vague unease, individual feels in danger of either being swallowed up, victimised, expelled but can’t identify why. Orientation is internal Individual who challenges will be scapegoated Do not learn from experience Members belong to alleviate anxieties, gain security and have needs met Fantasy drives and impulses are acted out Memory poor, time disorientation, language of reminiscence, cliché, loose generalisation The Work Group and Basic Assumptions

23. Basic Assumptions – Wilfred Bion3 Fundamental States of Mind • Dependency • Fight-flight • Hope (Pairing)

24. Dependency Group behaves as if its primary task is solely to provide for the needs and wishes of its members. The leader’s task is to look after, protect and sustain the members, not to face them with the demands of reality. The leader may be absent or even dead provided the illusion that he/she contains the solution can be maintained. Debates are about what the leader would have said. Atmosphere: passivity Emotions: Reverence, envy, guilt, depression.

25. Fight-Flight Group behaves as if its primary task is action to deal with an enemy either internal or external. However it is prepared to do either indifferently. The leader’s task is merely to devise courses of action, lead either attack or flight, the group’s task is merely to follow. Both do so without recourse to practicality or effectiveness. Atmosphere: paranoia Emotions: Anger, fear, hate

26. Hope (Pairing) Group behaves as if its primary task is to create a better future to give birth to a solution which will save it from its current difficulties. The leader is unborn The group’s task is to watch and wait. Atmosphere: hopefulness Emotions: Hope, enthusiasm, despair, disillusion

27. The Work Group and Basic Assumptions “The individual is a group animal at war not simply with the group, but with himself for being a group animal and with those aspect of his personality that constitute his 'groupishness'.” Experiences in Groups Wilfred Bion (1961)

29. Basic Assumptions in Commerce • Dependency – we will take you there – Airline • Fight-flight – we will make you lots of money but don’t expect us to tell you how – Investment Banks • Hope – we will make you successful and help you to believe in yourself – Public Relations

30. Groupthink Groupthink • A mode of thinking whereby pressures for unanimity overwhelm the member motivation to appraise realistically the alternative courses of action • Group pressure lead to carelessness, poor decisions and low quality actions • Group pressures result in irrational thinking and action • Collective Rationalization – members discount warnings that their thinking is irrational • Stereotyping the Adversary – painting an unappealing, inaccurate, self-serving picture of the adversary • Self-Censorship – members censor thoughts that are opposed to group ideas • Pressure on Dissenters – dissenters within the group are pressured into conformity • Mind guarding – actively protecting group from outside ideas that may contradict the group decision or ideas. Some members play the role of mind guard • Apparent Unanimity – Everyone on the surface is in agreement, but there is probably some doubt being hidden from the group • Symptoms of Groupthink • Illusions of Invulnerability – feeling that the group is beyond harm • Illusions of Morality – feeling that the group is right, good and moral therefore anything it odes is right, good and moral

31. Some ‘Causes’ of Groupthink High Group Cohesion Homogeneity Insulation of Group form Outside Influences Lack of clear-cut rules to guide decision making Stress on Group and Group Membership Promotional Leadership (leader promotes their favourite ideas, while neglecting alternatives) Preventing Groupthink Leaders should encourage dissent Leader should remain impartial Subgroups work on problem independently Rethink group decisions in ‘second chance’ meetings Allow third party analysts to provide feedback to group Groupthink

32. Some ‘Causes’ of Groupthink High Group Cohesion Homogeneity Insulation of Group form Outside Influences Lack of clear-cut rules to guide decision making Stress on Group and Group Membership Promotional Leadership (leader promotes their favourite ideas, while neglecting alternatives) Preventing Groupthink Leaders should encourage dissent Leader should remain impartial Subgroups work on problem independently Rethink group decisions in ‘second chance’ meetings Allow third party analysts to provide feedback to group Groupthink

33. Avoiding Conformity Pressure- ‘Groupthink’ • Gather outside opinions • Handle, don’t avoid, group controversy • Question weak arguments • Consider carefully before taking decisions • Avoid censoring deviants • Understand reason for deviance • ‘Risky Shift’- when group decisions are more risky or more cautious than individuals

34. What makes a group into a team? • Shared Task with shared Accountability • Common Understanding of Aims and objectives • System of Roles • Managed Boundary: Resources and skills managed within this • System of Feedback – clear criteria for success and failure • System of Review - Progress - Process • Discusses, decides and does (not delegates) the work

35. Behavioural Realities – non-teambehaviour is more natural 1. The best senior leadership groups are rarely a true team at the top—although they can and do function as real teams when major, unexpected events prompt that behaviour. 2. Most of them can optimize their performance as a group by consciously working to obtain a better balance between their team and non-team efforts—rather than by trying to become an ongoing single team. 3. The secret to a better balance lies in learning to integrate the discipline required for team performance with the discipline of executive (single-leader) behaviour—not in replacing one with the other.

36. Top executives are supposed to: • Direct and lead the actions of large numbers of people—whereas a team moulds the skills of a small number of people. • Exercise personal judgement in assessing risks, resources, and strategic options—whereas a team makes collective judgements through open dialog, conflict resolution, and real work. • Make assignments based largely on formal positions in the formal organizations—whereas team members' assignments are made on the basis of the specific required skills, regardless of their formal organizational role. • Be primarily responsible for broad corporate strategy, policy, and objectives—whereas a team's purpose and goals must be more tightly focused on specific performance results. • Leverage their time and experience through efficient organization and management processes—whereas a team is seldom the most efficient grouping or process for getting something accomplished. • Pinpoint individual executives to make the critical decisions—whereas a team makes critical decisions in a variety of different ways, using whatever person or grouping will yield the best decision. • Manage performance of the organization by establishing clear-cut, individual objectives and work products—whereas a team must establish joint objectives and deliver collective work products. • Be individually accountable for "whatever happens on their watch"—whereas a team must hold itself mutually accountable for the collective results of all members.

37. Power and Authority Power is an attribute of the PERSON • Personal Power • Resource Power - Expertise - Network - Information • Position Power • Projected Power Authority is an attribute of ROLE arising from a TASK – ROLE: the idea in the mind by which an individual manages his/her self in relation to the system. Power may be exercised without matching authority Authority cannot be exercised without matching power

38. The Evidence That Enables Us to Predict Successes and Failures As Future Senior Managers In a 10 year follow-up study of top executives who derailed (centre for creative leadership 1996) the two most common traits are those who failed were: Rigidity: they were unable to adapt their style to changes in the organisational culture, or they were unable to take in or respond to feedback about traits they needed to change or improve. They couldn't listen or learn. Poor relationships: The single most frequently mentioned factor: being too harshly critical, insensitive, or demanding, so that they alienated those they worked with.

39. Other differentiators were: Self-control: those who derailed handled pressure poorly, and were prone to moodiness and angry outbursts. The successful stayed composed under stress, remaining calm and confident - and dependable - in the heat of crisis. Conscientiousness: The derailed group reacted to failure and criticism defensively - denying, covering up, or passing on the blame. The successful took responsibility by admitting their mistakes and failures, taking action to fix the problems, and moving on without ruminating about their lapse. Trustworthiness: The failures typically were overly ambitious, too ready to get ahead at the expense of other people. The successes had high integrity, with a strong concern for the needs of their subordinates and colleagues, and for the demands of the task at hand, giving these higher priority than impressing their own boss at any cost.

40. Social skills: The failures lacked empathy and sensitivity, and so were often abrasive, arrogant, or given to intimidation of subordinates. While some were charming on occasion, even seeming concerned about others, the charm was purely manipulative. The successes were empathic and sensitive, showing tact and consideration in their dealings with everyone, superiors and subordinates alike. Building bonds and leveraging diversity: The insensitivity and manipulative manner of the failed group meant that they failed to build a strong network of co-operative, mutually beneficial relationships. The successes were more appreciative of diversity, able to get along with people of all kinds. They built a network of contacts and friendships within and outside the firm.

41. Successes vs. Failures • Rigidity • Poor relationships • Self-control • Conscientiousness • Trustworthiness • Social skills • Building bonds and leveraging diversity

42. Needs in a Team • Belonging • Sense of Achievement • Influence • Containment

43. Container An effective group or organisation needs to provide a container (vessel, crucible) – a setting of shared meaning and energy in which the intensity of human interactions, conflicting meanings, and experiences necessary to its work can unfold constructively. Eg, Family, Marriage, Institutions The management of the container is a central task of management.

44. What is Emotional Intelligence? ‘Anyone can become angry – that is easy. But to be angry with the right person, to the right degree, at the right time, for the right purpose, and in the right way – this is not easy.’ Aristotle, The Nicomachean Ethics ‘The capacity for recognizing our own feelings and those of others, for motivating ourselves, for managing emotions well in ourselves and in our relationships.’ Daniel Goleman, Emotional Inteligence

45. EMOTIONAL INTELLIGENCE – Goleman Model

46. FIRO-BMeasures of Interpersonal Need • Inclusion • How much you generally include other people in your life and how much attention, contact and recognition you want from others (groups) • Control • How much influence and responsibility you want and how much you want others to lead and influence you • Affection • How close and warm you are with others and how close and warm you want others to be with you (1-on-1)

47. Leadership Styles • Coercive – demands compliance - do what I say • Authoritative – mobilizes toward a vision - come with me • Affiliative – builds bonds - people come first • Democratic – forges consensus - what do you think? • Pacesetting – sets high standards - follow my example • Coaching – develops people for future – try this

48. Coercive

49. Authoritative

50. Affiliative