A dynamic and creative board is one that is comprised of a diverse range of individuals. The process of creating such a board is both complex and risky. Even more difficult is maintaining motivation in the crucible-like conditions of modern business. Martyn Sakol shares his thoughts about how to select a board, and how important it is afterwards to provide supportive conditions for ‘self-actualisation’– to use the vocabulary of Maslow and the alchemists!

A highly effective board is a balanced board. By ‘balanced’ I don’t mean a board made up of balanced individuals, but rather a board where the range of capability, personalities, psychological preferences and styles complement each other. Putting together a senior management team is a complex and risky exercise. It is complex because the dynamics of a board must be right – right for informed debate, clear thinking and proper evaluation of problems and their resolution. It is risky because the cost of wrong decisions and misalignment can be substantial, both financially and to reputation.

So what does an effective board do?

This is simple. A senior management board identifies and implements business strategy by having a profound understanding of the competitive environment, objectively appraising resources, and communicating business goals that are clear, compelling and consistent. Successful boards should therefore seldom be formed as the outcome of a purely random process. The apparently linear and rational environment of the business world requires an objective appraisal of capability and careful selection of personalities and styles to achieve success.

Who am I kidding?

Ah, but were it only thus. Appointments are rarely based on an objective appraisal of capability or by balancing a mix of personalities and styles. Add to this the very nature of boardroom life. Here problems are never single, but interconnected, leading to uncertainty and ambiguity, exacerbated by conflicting views and interests. Consequently, there are rarely clearly identifiable correct solutions, those so neatly and tantalizingly laid out in the business strategy or organisation structure chart. No, in this ‘organised complexity’, solutions must be found by debating the alternatives and selecting the most promising option. Not an easy, or rational task. And one that is rife with intense psychological pressures. So in this crucible, diversity of styles is of the utmost importance. Otherwise the board can slip into groupthink leading to disastrous consequences.

So which composition of styles is the right one?

There is no shortage of executive team psychological profiling tools, promising to identify different styles, such as those of Belbin, Myers Briggs and Margerison and Mcann. All of them suggest that a necessary condition for high performance is balance along the dimensions of their own profiles. I recommend none of them and all of them. Any of the above are reasonable and useful. What really matters is that an executive team thinks about its composition, beyond the functional roles its members hold. This is beyond capability, and is as much about the how of management, as what. It is also necessary to have ensured that any assessment and selection process is rigorous and integrated with business drivers.

Case Study – our approach

Recently, following the acquisition of one financial service sector company by another, ER Consultants was asked to help select the top team. This is how we approached the project.

Step 1– Understanding the vision of top team success

We agreed and defined the role of the top team in delivering the benefits of acquisition – both collectively and individually. This was guided by shareholder and stakeholder expectations. We worked with our client to balance tradeoffs between the different agendas to make informed, calculated decisions.

Step 2 – Defining critical success factors

In order to determine the critical success factors we needed to be clear about the dimensions on which the combined board would be measured. The aim was to determine the composition of a balanced board (as opposed to a board of balanced individuals). A balanced board will encompass all of the critical success factors, but all of these do not need to be strongly present in any one individual. Some examples of board success factors we identified included both capability, competency and psychological style:

• Decision making
• Influence
• Public perception
• Interpersonal sensitivity
• Team contribution/style
• Strategic awareness
• Commercial insight
• Innovation/lateral thinking
• Individual reputation/brand
• Political awareness

Step 3 – Agreeing methodology for assessing critical success factors

To ensure cultural fit, we agreed the appropriate method for assessing critical success factors with our client. Our experience has proven that a positive perception of the assessment process is an essential factor in effecting successful change. We demonstrated some assessment tools, discussed others and evaluated different options for assessment.

Step 4 – Assessment

The following processes illustrate what we did, and what insights the client got.

• CV analysis and reference checking to assess which of the critical success factors had been delivered in the past
• In-depth competency-based individual interviews to gather historical evidence of how those critical success factors have been delivered
• Psychological profiling to understand individual style, ways of working, risk factors, and team contribution.
• Business simulations to measure individual and team performance

Step 5 – Decision making

To facilitate decision making we:

• Provided a detailed report on each individual
• Collated and analysed the different forms of data collected to predict likely future behaviour and performance of possible team compositions
• We recommended an optimal team

Step 6 – Individual feedback

Both successful and unsuccessful individuals were given the opportunity for face-to-face feedback on their performance and a written report. This is a crucial step in the process for ensuring that the successful team members understand their individual style and potential team contribution. For the unsuccessful individuals this is an important step in ensuring transparency and maintaining alignment with organisational goals.

Maintaining diversity and motivating the team: back to Maslow

OK, so now that I have selected a capable, creative, dynamic and diverse board, what will motivate them? What will keep our executive team in the crucible? What will ensure that they maintain motivation, are still prepared to challenge, even when the going gets tough, as it invariably does?

From my experience of working with boards, I would suspect that our colleagues on the board are driven, not by the financial reward but by the desire to become more and more what they are, and become everything that they are capable of becoming. In Maslow’s terms, a person seeks self-actualisation. A musician must make music, an artist must paint, a poet must write. If a person is to be ultimately happy, what he or she can be, he or she must be. If the board is to provide the conditions for this to take place, then careful assessment and selection is required. But this is worth it – if you can get it right, your board will develop and deliver to the utmost of their being, and your organisation will fly.

For further information, please contact Martyn Sakol:
T 44(0) 1223 31594
E martyn.sakol@erconsultants.co.uk