SMART BOARDS – Board members of the future Part 1

When a group of five to nine people from different backgrounds meet every two months for a few hours of meetings and have overall strategic responsibility for a company with up to thousands of jobs, the demands on individuals and the quality of their preparation and collaboration are high. Swiss law stipulates that a company’s Board of Directors defines the strategy and that the Executive Board implements it. The «swiss code of best practice for corporate governance» provides proven guidance on how a board of directors functions well. Issues such as professionalism, independence and diversity have gained enormous importance on the Board of Directors in recent years.

by Esther-Mirjam de Boer, published in KMU Magazin 03/2018

In an increasingly complex, volatile and uncertain world, strategy work also requires an increasing degree of agility. Board members must be able to keep pace with the knowledge gained in the operational bodies of companies. Often, however, the operational forces are noticeably ahead of the strategic body – especially when it comes to digital transformation.

In a business world that is increasingly driven by the possibilities of digitalization, an understanding of the grammar of information technology is a basic prerequisite for future-oriented decisions and impulses for action. Our economy and society are in the midst of a transition from the functional machine age to the digital information age. The basic assumptions are changing in the process. In the machine paradigm, “efficiency” was the key objective – in the beginning information age, the speed and dexterity of adaptation are central, “agility” in other words. Complexity is increasing enormously. Those people who were born into this age are called “digital natives”. They often have a different – a more up-to-date and sustainable – operating system in mind. They are different: faster and more adaptable. This is not always compatible with the more experienced forces that are trimmed for efficiency. That’s why it’s important to be vigilant, because experience can be a hindrance in times of upheaval. And as always in phases of great change, fundamental differences sometimes trigger mutual defense.

“Experience can be a handicap in times of upheaval”.

Equal and equal is blind. Everyone knows that it is easy to work with like-minded people, because they often agree. This is pleasant, but dangerous, because you have the same blind spots. Conflicts and misunderstandings arise from different perspectives and priorities. This is unpleasant, but further development and innovation require intensive discussion and conscious diversity of consideration. This does not go smoothly: diversity causes stress. That is why it is of crucial importance to recognize and understand the differences in teams and to be able to use them constructively.

“Diversity causes stress”.

This demands a broad repertoire of interpersonal skills from all those involved, because it is obvious that it is not enough for the Chairman of the Board of Directors or the CEO to be the only person who has the insight and allows the individual teams to take effect. Modern managers try to reduce silos in companies and promote collaboration between different business areas. Rightly so. Effective teamwork requires the integration of different perspectives, even if they are not all comprehensively understood as individuals. Nothing else remains to be done but to trust occasionally and purposefully. This is all the easier when you know that the right people are on board.

Survivability in a vuca world

vuca = Volatility – Uncertainty – Complexity – Ambiguity

Smart Boards are those bodies in which everyone knows each other well, trusts each other, cooperates productively and which are optimally aligned to the challenges of the company in the future with regard to diversity. This requires a “shaken mass” of personal maturity and interpersonal intelligence from all participants, i.e. the ability to playfully engage with other points of view and to constructively include and review them in one’s own perspective. The crucial question now is, how do you find people who are good at this? These abilities or their lack are not deduced from a curriculum vitae and only with difficulty in a first personal conversation. Only in the cooperation it becomes visible whether these abilities are there.

There is one branch of research in psychology that deals precisely with this challenge: developmental psychology.

“Human beings mature in recognisable stages of development,” Jane Loevinger recognised as early as the 1960s. The Swiss Dr. Susanne Cook-Greuter from the USA has developed a tool that was refined by David Rooke and William R. Torbert for use in leadership and team development. With this it is possible to systematically recognize how much diversity and complexity a person can integrate into his thinking and acting and how much contradiction he or she is able to deal with productively. This is how one assesses the integration ability of a leader in a context of contradictions and uncertainties as well as the ability to act under paradox conditions. In short: it measures the ability to act in a vuca world. Jim Collins describes in his bestseller “good to great” which sustainable benefits so-called level 4 and level 5 managers can create in companies. It is therefore desirable to have enough people at work on the boards of directors and management boards who have precisely these skills in dealing with complexity, contradictions and uncertainties in order to be able to survive as a company in a vuca world. A first important step, but that alone is not enough.

Smart Boards” include diversity, because diversity in teams makes them more successful.

By diversity, we mean deliberately planned differences in all relevant dimensions that are aligned to the corporate strategy: Age, educational background, wealth of experience, cultural background, gender, etc.

Personality” is at the heart of many diversity models. But how can personality be systematically described and used for diversity planning? Typological tools are particularly suitable for this purpose. Newer tools, such as the Bochum Inventory for Occupational Personality Description (BIP, Hossiep & Paschen, 2003) and the Swiss Talent Profile Jaagou (Eric Bättig, 2006), incorporate more recent findings on resource orientation and positive psychology into their tools. This increases the accuracy and acceptance of the results and consequently the application value compared to older tools.

Many companies use established tools that describe “personality” for their personnel search and executive development.

They provide a systematic perspective on people that is independent of self-assessment. They are standardized profiles. These have the advantage that statements are made that are valid irrespective of gender, age, origin, education, etc. They bridge these categories and help to overcome so-called “biasses”. These are distortions of perception through unconscious connections of categories with ability attributions, more concretely: Prejudices, clichés and myths. Typological tools can point out existing abilities and dispositions that are rather not attributed to the category to which the person in question belongs. An introverted, socio-empathetic man and an entrepreneurially innovative woman, to name two striking examples.

With these standardized profiles, team profiles can be formed that can make statements about whether, for example, caution and risk awareness are more important in a committee than development urge and creativity. Depending on which development phase the company is in, one or the other is better for implementing the strategy. The first is better suited for consolidation, the second for a growth strategy. This is just as true for an executive board as it is for a board of directors. As two smart boards, these should not be in complete opposition to each other, nor should they be set up congruently 1:1. Every vacancy opens up the opportunity to realign the board in terms of strategic direction. With good evaluation and design tools, they can be made smarter.

Esther-Mirjam de Boer has been self-employed in strategy and leadership development for 16 years. She works as an Associate Consultant with David Rooke (GB). In 2016, she and Carla Kaufmann took over GetDiversity GmbH, which specializes in recruiting board members and building teams to systematically expand diversity.

Harvard Business Review article “Seven Transformations of Leadership, Rooke/Torbert

pwc article “the hidden talent” in cooperation with David Rooke