July 2, 2020
Posted in: WATSON Views
In a crisis, no matter the sector or organization, CEOs and chairs have to recalibrate their relationship and engagement to find the right balance and learn as they go. They must flex together to redefine the relationship for the current moment in a way that provides mutual value and support. For those navigating a changing relationship, we offer some advice to guide the way.
The best CEO-chair partnerships follow an ongoing rhythm of open communication, while being dynamic and flexible to changing circumstances. The relationship will evolve and change over time, depending on the organization’s internal and external context and the needs of each party. There are times when the relationship will inevitably deepen and require more active engagement from both the CEO and the chair. For example:
- When a new CEO or chair comes into the role
- When there are significant organizational changes – a new strategic plan, an upcoming merger/acquisition, major legislative changes
- When there is a question of leadership or ethics at the top – an issue where the chair needs to understand the process or dynamics to report back to the board
Or when there is a major shock to the system – a crisis. A low-likelihood, high-impact event that can threaten the organization’s survival. We are currently in one of these times. We are in a moment that not only tests the strength of this key relationship but requires the CEO and chair to engage in an entirely different way. Chairs might find themselves unsure of how to strike the right balance between giving the CEO space to lead and ensuring they feel the support and confidence of the board. At the same time, CEOs might find themselves carrying a heavy load and unsure of how best to mobilize the board and chair to respond to the crisis at hand.
The board has a responsibility to monitor the organization’s crisis response and the implications for its people, finances, and strategy, in addition to its regular oversight responsibilities. In order to do this, many boards are meeting more often and receiving regular updates on the organization’s situation and response. For a CEO, this level of engagement could feel like a burden or a blessing – the chair plays a key role in ensuring it is the latter.
The CEO should be focused on the crisis response and managing ongoing operations, drawing on the chair as a sounding-board and strategic advisor. While the CEO is concentrated on the immediate operational details, the chair can add value by complementing this with a higher-level view. The chair plays an important role in reminding the CEO of the long-term vision and purpose of the organization to ensure immediate actions align with the organization’s purpose, values, and longer-term aspirations. Together, they lead the organization to a recovery that is grounded in the organization’s purpose, culture, and values.
|Advice for chairs||Advice for CEOs||Advice for the partnership|
Hey WATSON, how can you future-proof the CEO-chair relationship for times of crisis?
The best way to future-proof your relationship for times of crisis is to build a solid foundation of trust and respect, coupled with clear roles, communications, and expectations. At the same time, ensure you maintain professional boundaries so you can have frank and honest discussions and challenge each other, bringing a level of objectivity and avoiding the potential for a close relationship to cloud judgement.
Go one step further and take the lead in future-proofing the board-management relationship. Cultural and personal fault lines have a tendency to crack open in a crisis, creating new challenges that can distract from the real issues at hand. Building a healthy board culture and a constructive board-management dynamic will serve the organization immeasurably in a time of crisis.
Have a governance question?
The chemistry, communication, and trust between the CEO and chair have a direct impact on an organization’s ability to meet the challenges presented in a crisis and move forward with purpose. Successful response and recovery depend on the ability for this key strategic partnership to evolve to meet the needs of the day. Across organizations and sectors, we are seeing this partnership evolve and strengthen, bringing balance and focus through uncertainty and preparing organizations for the challenges and opportunities the next paradigm brings.
June 18, 2020
Posted in: WATSON Views
We are through the initial shock of the COVID-19 crisis and adapting to a different reality, one that continues to challenge us personally and professionally in ways we never imagined. On a personal level, we’ve had to adjust how we work, how we learn, how we socialize, and how we parent. We’ve also had to coach our families through the highs and the lows, get creative in celebrating milestones differently, balance playing multiple roles at the same time, and figure out new ways of adapting to what still feels like an uncertain future.
Organizations have had to pivot significantly, and with urgency, to take care of employees, suppliers, customers, and communities. And as boards, we’ve had to adapt to new ways of meeting and deliberating important decisions. Collectively, we’ve had to tackle unprecedented challenges and changes, where we can’t draw on direct experience as readily as we may have in the past. Today, many of us are looking back at the last few months to learn from our experiences and looking forward to define how we will thrive in the “next normal”.
As we think about this, we are reminded of the oft-quoted phrase, “never let a good crisis go to waste”. The phrase suggests that now is a time to reflect and evaluate possibilities and chart new opportunities. At WATSON, we’ve always been driven by purpose, and focused on helping organizations perform better for greater impact on society; the pandemic has given us an opportunity to solidify what this means for us, and allowed us to explore new capabilities, increase collaboration, exercise creativity in our approach, and get laser-sharp in executing initiatives that we had previously been hesitant to launch.
As we reflect on this phrase from a leadership and governance perspective, we see lessons for organizations across sectors. So, in the spirit of not letting a good crisis go to waste, here are eight takeaways for boards and leadership teams:
1. Continue to be FLEXIBLE and ADAPT as appropriate.
Boards and their organizations have learned how to adapt quickly to new ways of conducting business, including embracing new technology. Boards and leadership teams need to continue to be flexible, doing what they need to do to get through the immediate crisis while adapting for the future.
Now is a good time to test and be open to new ways of doing things and to think about lasting changes that can be made to bring your organization forward.
2. Take the TIME to reflect, evaluate, and learn.
Organizations have had their systems and structures pressure checked. Directors, leaders, talent, and culture have been tested in dramatic ways. This is a unique opportunity to learn from this together and think about what it means for the future.
Sit down together and ask yourselves: how well did we adapt and respond? How did we lead? How effective was our board and management team in coming together, in carrying out our roles, in showing up as leaders? What are we proud of? What could we have done differently? Use these learnings to inform how you approach future discussions around strategy, risk, crisis management, culture, and people.
3. Re-focus on your organization’s VALUES and PURPOSE
The pandemic has intensified the conversation around the purpose of organizations and the need to balance the needs and interests of a variety of stakeholders. This is a great time for boards and leadership teams to open up a conversation around their organization’s reason for being and the values it aspires to uphold.
Think about this broadly by asking who your organization serves, why it exists, and whether its purpose and values remain relevant. Assess how your stated values were lived through the pandemic and what shifts may be needed. At a time when things feel uncertain, stakeholders are looking for hope – they want to know where the organization is going, how it will get there, and how it will impact them in a positive way.
4. Re-imagine the possibilities and strategize for FUTURE impact.
Amidst all the uncertainty lies opportunity; think about possibilities in light of the organization’s re-focused purpose, values, and culture.
Ask what’s working well with your current strategy, what’s gotten in the way in the past, and what changes need to be made to shift to the future. Think about what has changed with respect to your human, technological, and financial capital and map out potential scenarios for the future. Be open to opportunities and prepare to act quickly if needed.
5. Make space for thoughtful conversations around RISK.
The pandemic highlighted serious risks – and given the urgent need for adaptation, organizations are finding they may need to take more risks to survive and thrive. Boards and leadership teams need to approach the subject of risk thoughtfully. Boards have an important role to play in setting a healthy risk culture for their organizations.
Think about how well your organization’s risk culture is aligned with its purpose, values, and strategic priorities. This should go beyond merely identifying a list of risks and ways to manage them; it should consider how best to optimize risks for the most benefit. Take the time to set your organization’s risk appetite and tolerance, and integrate that conversation with strategic, financial, culture, and people discussions. Think about different scenarios, test assumptions, assess possibilities, and use those to inform actions.
6. Seek broad FEEDBACK and collaborate effectively.
It’s difficult to learn and understand how you did without good feedback and data. Seek multiple viewpoints and data points. Find out how your stakeholders are feeling, what’s important to them, and whether your culture is enabling or disabling. Take the time to understand if you are aligned on your organization’s purpose, values, and strategic objectives.
The crisis has likely resulted in more frequent communications between the board and management team, and this is likely to continue for the foreseeable future. Think about how to be even more strategic during this time. This is not the time for boards to get more operational; instead, it’s a time for boards to provide guidance and thoughtful support while allowing their management teams to be flexible and nimble in making the changes they need. At the same time, it’s important for management teams to communicate regularly and openly to help their boards understand the actions they are taking, who and how they impact, and how they continue to align with the organization’s purpose and values. [/row_column]
7. MOBILIZE for change and don’t be afraid to make the tough decisions.
During a crisis people are often more accepting of tough decisions because they see the crisis and the urgency.
Don’t let the crisis paralyze you from doing what needs to be done to achieve your purpose and re-imagined strategy. Think about this from both an organizational and board perspective. As an organization, do you need to streamline your organizational structures, upgrade your talent, or better empower your existing talent? Are your executive compensation structures still appropriate and do they incentivize the right kinds of behaviour? What financial or people resources need to shift to allow you to move forward? Is now the time to accelerate those merger discussions or to drop that lagging business line? As a board, do you have the right composition, committee structures, and information? Are you considering your organization’s stakeholders appropriately? Do you have the right leaders to take you through this? As you make these tough decisions, do so with continued empathy and compassion, and with deliberate thought around being more inclusive and equitable to your organization’s key stakeholders.
8. Prepare and EDUCATE yourselves for the future.
The pandemic has highlighted new issues for organizations – the need for swift innovation and new governance and leadership issues coming to the board agenda with unprecedented haste. While some of these were percolating, the pandemic caused a seismic shift in what boards and leaders need to think about and prepare for as they carry out their organization’s purpose.
As leaders, ask yourselves: how well do you understand the key issues that impact your organization? What biases are at play? What do you need to think about to move forward? It takes time, understanding, and practice to address these issues appropriately and may require facilitated conversations and/or education. Seek advice and expertise as to how best to approach these issues for your organization and align on the role of the board and management in each.
The crisis has required organizations to take urgent and decisive action on a number of fronts in order to survive. There is a small window of opportunity for early learning and adaptation – it’s important to make the time now to reflect and learn from the crisis, even if it means starting small. Deliberately build these conversations into your upcoming board agendas and think about the important changes that will need to be made to move forward effectively. By bringing focus and attention to these eight areas, your organization will be better positioned to sustain and thrive in the next normal.
June 4, 2020
Posted in: WATSON Views
Was your board in the middle of a CEO transition when COVID-19 hit? You’re not alone. With a median global CEO tenure of five years, many boards have found themselves in the midst of a pandemic, navigating the ever challenging and important task of finding their next CEO.
In addition to thinking about what they need in the next CEO, boards now have to think about how they will ensure they are making the right decision, as they grapple with what the crisis means for the organization, its strategies, business model, and people. This is an unprecedented time and there is no playbook. Boards should consider their context and ask themselves:
- Do we have the option of delaying our search or relying on an interim leader?
- What are the risks of deferring or continuing a leadership shift?
- Will a delay in leadership transition enhance or further threaten the survival and relevancy of our organization?
- Will we emerge from this crisis stronger and more prepared for transition or will we have lost ground and be even more vulnerable in three to six months?
- How will the pandemic fundamentally affect the business and what are the related implications for what will define success for the CEO?
- What stage of evolution will the next CEO need to lead in the context of the post-COVID organization – innovate, ‘go to the next level’, stabilize to remain afloat?
- Based on our current and future context, what changes do we need to make to our CEO profile in terms of skills, experience, and characteristics?
- Are we prepared to be fundamentally open and transparent with candidates about the state of the business?
- With the new realities and circumstances, what can the CEO learn on the job and what must they already demonstrate they know, in order to give confidence in their ability to lead?
- Do we have the support we need to make this decision, find the right leader, and communicate with candidates, employees, and stakeholders?
CEO transition is rarely straightforward. It depends on the organization’s current context and point in its evolution, the organization’s strategy and future direction, and the range of options available to the board. The current situation adds complexity to an already complex decision, one that many board directors find themselves making for the first time. It also creates opportunity – aligning organizational transition and leadership transition to prepare for a markedly different future.
June 3, 2020
Posted in: WATSON Views
Never doubt that a small group of thoughtful committed citizens can change the world.
Indeed, it is the only thing that ever has.
~ Margaret Mead
As the founder and leader of WATSON, I feel compelled to speak out to express my horror at the circumstances of George Floyd’s death last week, and to stand with those who call to end racism and instil human dignity as part of our world culture. While sensational events bring us to our feet, we must remember that racism is not a series of isolated events; it is systemic and pervasive. And it is as present in Canada as elsewhere, although often more subtle and nestled within an outwardly polite façade.
While we call on government to ensure our legal structures safeguard equality and human rights, it is up to us as individuals to reflect on what we do and say that may contribute to a culture of discrimination and bias. Whether acting on our own or as a collective through an organization, we each have the opportunity every day to make choices to support a foundational belief that everyone is an equal member of our society. It is up to us as individuals to cause the change we want.
Caring and human dignity have always been core to WATSON’s values and we will continue to instil this character within our firm. Personally, I am committing to double down on my personal effort to be more aware and call out actions, words and jokes that extend gender, racial and social class bias. As a firm, we are committing to bring an even stronger diversity and inclusion lens to our work. We will help clients create processes and practices that are inclusive, ensure an even playing field, and support a healthy workplace culture. We will continue to advocate an approach to governance based on inclusive capitalism, incorporating the broader lens of human equality and diversity, and a stronger collective society.
We invite you to join with us in making your own personal commitment to stand up for human dignity in all situations. Together we can make the change we want.
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