Is Your Board Creating Value?

BOARDS THAT LEAD

When to Take Charge, When
to Partner, and When to Stay Out of the Way

In Boards That Lead, authors Ram Charan, Dennis Carey and Michael Useem argue that boards today have a duty to lead — to take a more active role in making decisions that were once perhaps the sole prerogative of the executive. The reason for the increased active leadership role of boards is the growing complexity and information overload of today’s business environment “across every facet of doing business,” the authors write. They stress, however, that their new model of board leadership is based on a collaborative partnership in which the boards know “when to lead, when to partner, and when to stay out of the way.”

Knowing When to Do What

Perhaps the most important leadership responsibility of the board is to develop the central idea of the company — the practical, guiding core concept of the company that “references why the company exists, whom it serves, how it should be nurtured, why it will flourish, how it will make money and manage risk, and where it must be going if it is to sustain a competitive presence and achieve its broader purpose,” the authors write. “The central idea is the bedrock on which the enterprise is raised and how its resources are spent.”

Boards should also take a leadership role in selecting the CEO; ensuring the board’s competence, architecture and modus operandi; ensuring the ethics and integrity of the company; and defining the company’s compensation.

Boards should partner with the company’s executive on strategy, capital allocation and execution; defining the company’s financial goals; managing risk; allocating resources; developing talent; and developing what the authors call a “culture of decisiveness.”

Finally, according to the authors, boards should stay out of the way for issues of execution and operations as well as non-strategic decisions.

The Apple Example

The productive collaboration between Steve Jobs and the chairman of the Apple Board Edgar S. Woolard, Jr., according to the authors, perfectly exemplifies the meaning of knowing when to lead, partner and stay out of the way. To begin with, it was Woolard who convinced the board to bring Jobs, forced from Apple in 1985, back to the company in 1997 (one of the authors, Ram Charan, was an advisor to Woolard during this period). Jobs agreed on the condition that Woolard replace the entire board, although eventually one other board member was allowed to stay.

With a new board in place and Jobs committed to reviving the fast-declining company, Jobs and Woolard, according to the authors, began a back-and-forth process in which Jobs would come to Woolard with an idea, which Woolard and the board would either approve or disapprove. Jobs, Woolard would say, was always respectful, making a passionate pitch for his ideas but accepting defeat if it came. In many cases, however, Jobs was able to sell Woolard on his ideas. For example, after taking his new leadership position, the authors write, Jobs convinced Woolard to let him stop the Mac clones (an expensive proposition since the clone makers were under contract), fire many of the firm’s engineers, divide the survivors into six teams with whom Jobs would meet once a week, and perhaps most memorably, create an Apple store. Woolard resisted the Apple store, knowing that other computer manufacturers had tried and failed to succeed in retail. He finally acquiesced to only four stores, which the board approved.

Boards That Lead is an owner’s manual, clearly laying out how boards are supposed to operate. The book begins with defining the central idea and recruiting the right board members, then moves to several chapters on managing CEO succession (including identifying failing CEOS and recruiting successful replacements), and finally covers managing risk and avoiding micro-management. All chapters end with a detailed “director’s checklist” to help achieve the responsibilities outlined in the chapter.

In an early chapter, the authors write that board leadership “does not mean wandering into the weeds — micromanagement is decidedly not the point — but laissez-faire is no longer an acceptable posture at many boards either.” This clearly organized and authoritative book will help boards of directors stay as actively involved as they need to be — and no more.

Unleashing the Creative Potential Within Us All

CREATIVE CONFIDENCE

Everyone Is Creative, Even You

The core argument of Creative Confidence is simple: Everyone can be creative. Those who see themselves as non-creative might bristle at the notion. But David Kelley and Tom Kelley make a compelling case that creativity is innate in human beings – all human beings. The difference is that some of us recognize the creativity inside, and others don’t. The goal of Creative Confidence, therefore, is not to teach readers how to be creative but instead to guide them in bringing out the creativity within them. Everyone is creative, the authors argue, but not everyone has the courage to be creative, or take action when they should, or know how to start on a project. These are the types of constraints that people who mistakenly believe they are not creative have to overcome.

Many people assume they are not creative simply because they don’t dare to be creative, the authors argue. Too many people are afraid of failure, when in truth, it is through failure that one eventually achieves success and breakthrough. You have to give yourself “permission to fail,” the authors write. You have to make the leap and acknowledge that it might not be a success. “Look for ways to grant yourself creative license, or give yourself the equivalent of a get-out-of-jail-free card,” they write. And if unexpected mistakes do happen, then “own” the mistakes and learn their lessons.

Sparking Creativity

Sometimes you are ready to dare to be innovative… but the ideas aren’t coming. The chapter, “Spark: From Blank Page to Insight,” offers eight steps for sparking creativity when facing the “blank page”:

1. Choose creativity. You have to decide to make it happen.

2. Think like a traveler. Don’t just sit in the office and wait for the spark. Expose yourself to new experiences and ideas.

3. Engage relaxed attention. Don’t focus on a specific task; instead relax and allow your mind to make connections between seemingly unrelated ideas.

4. Empathize with your end user. You’ll come up with better ideas if you understand what they want.

5. Do observations in the field. Observe others, and you might “discover new opportunities hidden in plain sight.”

6. Ask questions, starting with “why?” A series of “why” questions can lead you past surface details to core issues.

7. Reframe challenges. The first step toward the solution is sometimes to reframe the question.

8. Build a creative support network. Have a group of people to bounce ideas off.

Taking Action

Coming up with ideas is only a first step. Creative people do not only think but also act. They make the ideas come to life. Some of the “action catalysts” suggested by the authors include:

1. Get help. Hire or recruit someone to share the burden, and see what he or she comes up with.

2. Create peer pressure. Author David Kelley discovered that he needs someone in the room to get started, even if they’re not saying anything!

3. Gather an audience. Get someone to listen; then “talk your ideas through to get the creative juices flowing,” write the authors.

4. Do a bad job. This rather surprising suggestion refers to the perfectionism that can lead to paralysis. Instead, the authors urge creative innovators to just get something out and then make adjustments.

5. Lower the stakes. Nothing can stop you in your tracks like believing that your decision is “so important that everything hinges on it,” write the authors. Make it less important. Come up with options, and see what happens.

These sample to-do lists scratch the surface of the engaging advice and stories offered in Creative Confidence. David Kelley is the founder of IDEO, one of the world’s leading innovation and design firms, and the d.school at Stanford. Both IDEO and the d.school offer numerous examples to support the arguments of the book. Tom Kelley, a partner at IDEO, is the author of the bestsellers The Art of Innovation and The Ten Faces of Innovation, and no doubt this collaboration with his brother will be another well-deserved bestseller.

Straight Talk on Leadership

R. Douglas Williamson, a Canadian businessman and writer, has been very outspoken about the need for Canada to be more aggressive in the global economy. Through his articles and YouTube videos he has called on Canadian government and business to catch up with the rest of the world, and has pointed to the fact that Canada has moved too slowly and is falling behind.

In his latest book, Straight Talk on Leadership, Williamson calls leaders out of complacency. His analysis of the issues and clear solutions are just as applicable for those of us in the U.S. and other countries, and so we’ve invited him to share his solutions at our next Soundview Live webinar, Leading into the Future.

In this Soundview Live webinar Williamson, head of the prestigious consultancy, The Beacon Group, points to complacency, lack of leadership sophistication, and an inward focus as the chief reasons why companies are at risk of falling behind. Issuing an urgent call to action, Williamson helps leaders understand the four principle challenges facing the modern leader and describes the eight essential leadership competencies required to navigate the future. He provides powerful strategies, tools and techniques for how to reframe thinking about leadership and reform leadership strategies.

You will learn:

•             Four principle challenges facing the modern leader.

•             The eight essential leadership competencies required to navigate the future.

•             Powerful strategies, tools and techniques for how to reframe thinking about leadership and reform leadership strategies.

Please join us for this webinar, and bring your questions for Williamson. As always, Soundview subscribers attend for free.

Underdogs, Misfits, and the Art of Battling Giants

DAVID AND GOLIATH

Who Has the Real Advantage?

Launched by his bestseller, The Tipping Point, Malcolm Gladwell is a nonfiction superstar, and with good reason. As his latest book, David and Goliath, proves, Gladwell keeps surprising us with new revelations about how the world really works. In David and Goliath, he destroys an assumption that has been accepted without question for thousands of years: that the David of the Bible – and all the “Davids” that followed in the history of the world – were underdogs. In general terms, David and Goliath forces us to reconsider what we thought we knew about those with advantages and disadvantages.

For example, most people believe that to grow up very poor is a disadvantage for children. But Gladwell argues that to grow up very rich is also a disadvantage. On another topic, the accepted wisdom is that small classroom size is better for children; however, Gladwell argues that if classroom sizes become too small, the children are impeded in their learning as much as they would be in classrooms that have too many students.

It’s easy perhaps to make counterintuitive, against-the-grain pronouncements and perhaps even to find some anecdotal evidence to support these pronouncements. But Gladwell is a teacher, not an opinionated contrarian. In all his books, he uses a wide range of academic studies and other research reinforced with eloquent true stories drawn from history as well as from the lives of contemporary people and events around the world.

What’s So Bad About a Large Classroom?

Gladwell’s discussion of the impact of classroom size on learning exemplifies the depth of his research and insight. Classroom size happens to be one of the most researched topics related to education in the world. A number of global academics and consultants have carefully explored whether and how the size of a classroom impedes or enables learning in countries from Australia, Hong Kong and Singapore to numerous countries in Western and Eastern Europe to the United States. The results are mixed, at best, with smaller class sizes sometimes having a positive effect, sometimes having a negative effect, and sometimes having no effect whatsoever.

As Gladwell digs deeper in the research, he discovers an inverted U relationship to small classroom size. Reducing the number of students in a large class does help increase learning to a certain point. Then the upward curve bends downward as smaller class sizes reduce learning. There are a number of factors. For example, shy or mediocre students don’t get the boost to their self-esteem that comes from hearing others asking the questions with which they are wrestling.

Success In Spite of Struggle

Gladwell plunges with equal depth in a wide variety of other situations in which the advantage or disadvantage is wrongly assigned by our assumptions or the accepted wisdom. For example, dyslexics or people who lose a parent young are often successful because, not in spite, of their struggles.

Whatever the situation or context, Gladwell provides the evidence that bolsters his conclusions – often evidence that was available but ignored. Any historian of ancient times, for example, could tell you that the “artillery” of ancient armies consisted of men with slingshots, who benefited from greater mobility and the ability to strike from a distance than the heavily armored sword fighters. In other words, Goliath was taken out by a better soldier.

Winners of the 2013 Thinkers50 Awards

The Thinkers50 rank was launched in 2001 as the first-ever global ranking of management thinkers. Every two years the list is updated and includes a range of activities that support its mission of identifying and sharing the best management thinking in the world. The Thinkers50 Ranking remains the premier ranking of its kind, and the Thinkers50 Awards (introduced in 2011) are widely regarded as the “Oscars of management thinking”.

That mission is based on three core beliefs:

•Ideas have the power to change the world

•Management is essential to human affairs

•New thinking can create a better future.

Here are the top 15 thinkers for 2013:

Clayton Christensen

W. Chan Kim & Renee Mauborgne

Roger Martin

Don Tapscott

Vijay Govindarajan

Rita McGrath

Michael Porter

Linda Hill

Herminia Ibarra

Marshall Goldsmith

Pankaj Ghemawat

Jim Collins

Daniel Pink

Lynda Gratton

Amy Edmondson

(See the rest of the list)

As you will see from the links above, Soundview has covered the work of 12 of the top 15 thinkers for 2013. This is not that surprising since one of the greatest ways these top thinkers have wielded their influence is through their books. This aligns with our goal to provide subscribers with the best in business thinking.

Who would you add to the list of the 50 top thinkers for 2013?