The CEO’s Dilemma:
“Why, When & How To Develop Technology Fluency”
What board leaders can do to navigate the board leadership challenges and strengthen the effectiveness of the board
“A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say, we did it ourselves” - Lao Tzu
The CEO’s dilemma in a general sense can be described as the tension that exists between maintaining a focus on short-term execution and value innovation for the long term. How do you deliver the expected quarterly results and invest/develop new capabilities that will create sustainable value in the long term?
There are several dimensions that this dilemma applies to but here we focus on the technology dimension. Specifically, the tension between short term actions and long term mindset of the value of technology and its business implications. Simply put, why should a CEO bother with developing their technology literacy and fluency when they have a CIO/CTO or equivalent technology chief or outsourced provider. The answer really depends on what you believe about the role of technology in your business and industry. If technology plays an insignificant role, then it’s probably best to maintain the traditional mindset of delegating or outsourcing most of the fluency. However, the more you outsource this fluency, the less you’ll understand and the more difficult it will be to develop your tech fluency muscles if needed in the future. The pace of technological change is not linear but exponential and this will only exacerbate the problem if you need to come up to speed in the future. Further more, as the CEO, if you tech fluency isn’t strong, then it’s likely that the tech fluency and literacy of most of your executive leaders and to some degree the organization won’t be strong either. You set the tone at the top and your leaders will value what you value. Again, this isn’t a problem if the role of tech isn’t material for your organization or business in the short and long term.
We believe, however, that there are relatively few (if any) organizations and businesses where technology doesn’t have a significant/material role in the long term. In our experience, most organizations rely heavily on technology as a business enabler or in some cases a business driver. However, their CEO’s experience the following dilemma/ challenges when it comes to technology fluency and its strategic benefits
the most significant challenges of board leadership fall into three main categories
Strategic Alignment: Board-CEO Alignment: Relationship: Tight rope balancing act of when to lead, partner, oversee or get out of the way. One the one hand, board chair needs to spend sufficient time with the CEO to build a strong relationship that allows for mutual respect and oversight. One the other hand, too much time with CEO management could result in erosion of independence, too little time could lead to insufficient attention to critical matters. Temptation to act as alternative CEO, bias for action and unlearn the things that made them successful CEOs. Tendency to run the show; to present solutions to problems instead of facilitating effective decision making by the collective board of directors. Doing vs helping others do. Alignment on strategic direction is vital
Leadership Moments: These are characterized by difficult and critical decisions and choices that must be made, sometimes with limited time and in high-pressure, high-stakes conditions. These are moments were the presence and actions of strong leadership can make a big difference in outcomes. Examples include CEO transitions and replacements, board conflicts with directors and CEO or peers, activitist/proxy battle, crisis events such as natural disasters, product safety fatalities and much more. Whatever the circumstances, the board’s leadership character and competency will be tested and these moments can be extremely challenging to navigate. Sometimes, these moments are internal to the board leader and are designed to test the courage and integrity of the leader to speak up about an issue that’s being ignored or neglected. Either way, it’s still a difficult choice that must be made, albeit one that’s not obvious to everyone else but internal to the leader.
Board Effectiveness: Effectiveness depends largely on the engagement of board directors, who sometimes can be less than engaged or worse, downright hostile in the boardroom. Engagement drives the performance of directors on the board and in our experience, most corporate boards have at least one underperforming director. There are several levers that can influence engagement levels ranging from board culture, board packs and board meeting agenda/experience, board succession, board evaluation, director education, difficult personalities, and much more. Orchestrating these levers to facilitate how the board can effectively work and function together is a delicate balancing act for board leaders.
There are four distinct practices (outlined below) that board leaders should prioritize to help them navigate these board leadership challenges. The key to maximizing the benefits from these practices is consistency (i.e. habitual process), otherwise they’ll only bear limited fruit.
Side Bar - Board Leadership Book Recommendations
Below is a list of excellent books we have found very helpful for navigating board leadership challenges of both public and private boards. They offer practical actionable insights for board leaders and will benefit CEOs as well as aspiring board directors.
The following four distinct practices combine to form a process that leads to the desired outcome of increased board effectiveness. The central idea here is to master the process and not the outcome. If board leaders can master this process then the outcome will follow.
Create A Purposeful Board Experience/Design: The primary objective of creating a purposeful design is to intentionally create the conditions for a positive and productive board experience . This experience is not just limited to board meetings but also includes interactions that should take place before and after board meetings. Why? Because a productive board experience is influenced by the interactions before, during and after board meetings; all of these will ultimately impact the effectiveness of the board. For example, the quality of board materials and pre-reads before board meetings will considerably influence the contributions of directors during the actual meeting. Likewise, follow up actions from board meetings that are neglected or ignored also have an impact on board effectiveness. Board chairs should view the board meeting effectiveness as three legs of a stool; leg 1 - before, leg 2 - during and leg 3 - after board meeting actions/interactions.
Cultivate Trusting Relationships: Every productive and fruitful relationship is based on a foundation of trust. This is also true for boardroom relationships. There are at least three dimensions to the relationships that board chairs must cultivate to be really effective; these are relationships with the CEO, other board peer directors and executive management/liaisons. Cultivating these relationships takes work and time; and usually a lot more of both than board chairs expect going into the role.
Serve As Sounding Board & Mentor: Bill Campbell - coach Book. The coach’s mindset is crucial to ensuring healthy growth in the boardroom. The idea behind this mindset is to be intentional and proactive about being helpful to the CEO, management and board peers. It’s less about being right and more about arriving at the right decision. It’s about seeking to bring the best out in people and recognizing when and how to encourage board members to offer their valued contributions. And yes, it’s also about having difficult conversations with directors that are disruptive or disengaged to understand if/how to get them re-engaged or transitioned off the board.
Facilitate Meaningful Engagement: Director engagement levels in board meetings can range from silent to overly engaged, tactical to strategic, hostile to appreciative; all motivated by different reasons. The board chair has the responsibility to facilitate meaningful engagement. Such facilitation goes beyond just checking off items on the agenda, keeping board meetings on time. It also includes a keen sense of reading the room and potentially inviting perspectives from more reserved directors or redirecting discussions when they degrade to non-productive discussions. It may also including adding levity and fun as needed. Additionally, the style of facilitation will also influence boardroom culture and should therefore be taken seriously. Psychological safety is key to getting to the directors to offer their valued contributions and getting to better decisions for the board and the organization
The rest of the article provides additional details and context for each of the practices as well as advisory guides/resources (board agenda and board leadership succession) that will help board leaders get a jump start on the process.
1. Create A Purposeful Design
The universal challenge for directors in most boardrooms is the lack of time to cover all the complex board topics
A purposeful design that structures the boardroom experience as before, during and after a board meeting can help with this challenge. The central idea is to carefully plan all the design elements (e.g. pre-meeting dinner/learning, quality pre-reads, agenda, strategy topics, committee updates, executive sessions, post-meeting surveys, etc.) as an integrated cohesive experience and not just a board meeting event.
As stated earlier, the objective of creating a purposeful design is (in service of) to intentionally create a positive and productive board experience. That’s the primary intent and the chair should take the lead in orchestrating this experience using the design principles or elements outlined below. These elements and principles have been structured as before, during and after board meetings because these are critical phases that influence the effectiveness of board meetings and can shape the board experience for all board members.
Before
Set director expectations
Design and build an effective agenda
Integrate informal events and learning - dinner before meeting day and education sessions, outside speakers, etc.
Board materials and board pack / pre-reads - guidelines
CEO / Chair sync up calls/metings
During
Maintain focused discussions
Skilled facilitation - see section on facilitate meaningful discussion
Executive session
Board dynamics and board culture - virtual/hybrid, etc.
After
Debrief with CEO and preserve confidentiality of executive session
Post meeting surveys
Activate follow up on actions from board meetings
Effective Board Agendas For Board Leaders
A board meeting agenda is the flight plan for board directors. It defines the destination route, altitude and timing of decisions by prioritizing the focus areas and topics directors spend their limited time on. Effective agendas strike a delicate balance of strategic and critical operational topics. This can be a challenging task, even for seasoned board leaders. The guide below offers practical advice on creating effective board agendas
2. Cultivate Trusting Relationships
This section covers or addresses what relationships to cultivate, how to cultivate them and why.
Trust is the most important element of board leadership and any leadership for that matter. Without trust, a board leader’s effectiveness will be sub-par. Trust is the invisible ingredient that drives performance and results. Like the roots of a tree that lay unseen deep in the ground, but produces the nourishment that yields good fruit, Trust is unseen and produces nourishment necessary for yielding good fruit. The question then becomes, how do we inspire trust and cultivate trusting relationships.
You can’t just say trust me and voila, you’ve inspired trust and you should expect it to be instantaneous either. Trust take time as well as effort. There are a few vital actions that board leaders can take to inspire trust:
Model the right trusting behaviors - These are behaviors that are derived from strong genuine character and competencies. The principal trusting behavior is genuine care for others (i.e. the CEO, peer directors, management liaison). Caring about them as people instead of just employees that have been hired to do a “job”. Intent matters, not just how do I get the most of out them but how do I help them become the best that they want to be or could be. It’s a mindset that values the interests of others above ourselves and it is by far the most effective way to inspire trust. Other values that drive trusting behaviors include integrity, consistency and humility. Board leaders have to create the opportunity to model these values and behaviors in interactions with the CEO, peer directors and select management liaisons.
CEO-Board Chair Relationship
This may seem obvious to some but we have found that there are several instances when this relationship is neglected or ignored and where it’s barely cordial or even tense/dysfunctional for several reasons. For example, lead independent director and CEO have a negative history, activist-elected lead independent director, CEO perceptions about adequate understanding of the business. The point here is if intentional steps aren’t taken to build, re-build and sustain mutual trust and respect, the CEO-Chair relationship will become tenuous and will make board meeting very ineffective and not definitely not positive.
Actions To Consider - Board Chair
Schedule one-on-one time with the CEO on a regular basis and preferably in person. This is a high-leverage action
Humbly acknowledge the CEO’s role and magnitude of the weight on his/her shoulders
Find common ground and interests in and out of the boardroom
Engage in regular touch points between board meetings. The CEO should also take the initiate in scheduling these touch points
Ask for feedback
Lift them up
Seek ways to provide meaningful value to the CEO in and out of the boardroom
Genuinely care about the well being of the CEO and not just as the leader of the organization
Now rinse and repeat the same principles and approach for cultivating board peer and select management relationships. There are a few important nuances that you should keep in mind though; especially for the management relationships. Keep CEO apprised of touch points with his executive team.
3. Serve As Sounding Board & Mentor
Serve As A Sounding Board: It’s an active listening role and this statement from our wives best captures the essence “I don’t need you to fix it, I just need you to listen”. Board leaders can serve as sounding boards by helping CEOs and peer directors think through ideas and concerns. We like to think of the role of sounding board as an effective way to let others hear themselves think. (Insert story example here) As a sounding board for the CEO, the board chair or LID, employs the use of questions and not explicit directives, to help her clarify her thinking and assumptions. This is a very tricky balance that must be maintained otherwise it can begin to create unnecessary friction. The sounding board role is also helpful to peer directors and the same focus on questions and not directives or instructions apply as well.
Serve As A Mentor: There are two ways board leaders can serve as mentors; first is to invest time/effort in the CEO’s personal and professional growth. This signals a commitment to see the continued success of the CEO and the organization. Board leaders should still leverage questions (not directives) mostly in this role, although there may be cases where explicit guidance yields a better outcome. The second is to mentor potential board leaders either through formal programs or informal arrangements. Board leaders should nurture and mentor new board leadership talent and develop a board leadership succession plan and pipeline that’s reviewed on a regular basis.
The end goal is to bring out the best in the CEO, management and peer directors. An effective chair will seek to continue to elevate the capabilities of these individuals in very tangible and specific ways. He or she will model the character traits and behaviors they’re trying develop in the boardroom in service of elevating the effectiveness of the board. They will not try to run the organization or be the CEO but instead provide proactive and wise counsel as needed. Other times they will be a listening ear and listen deeply to what is and what is not being said. Great care must be taken by the board chair or LID to preserve their independence and objectivity because the more time they spend with the CEO and other peer directors, the greater the chances their independence/objectivity becomes influenced
Board Leadership Succession Guide
The time to plan is not when you’re running late; as the saying goes, to fail to plan is to plan to fail. This is true of board leadership succession planning especially when all seems well.
Proactively developing a strong board leadership succession plan, before it’s too late, can make a difference when it comes to board effectiveness. This advisory guide defines the essential considerations for board leadership succession planning.
4. Facilitate Meaningful Engagement
Poor board meeting facilitation can make good directors make or arrive at bad decisions. A skilled but new director with relevant experience in a subject matter may prefer to remain silent in the group of other seasoned directors with no experience in the subject matter. One reason for this puzzling behavior can be traced back to group dynamics, culture and psychological safety in the boardroom. These three elements can be greatly influenced, positively or negatively, by facilitation skills of the board leader.
For example, if a board chair shuts down a dissenting comment, question or suggestion in a rude and condescending tone, it sends a signal to other directors that dissent isn’t welcomed or encouraged. If this behavior becomes the norm, then the independent value and oversight of the board gets diminished significantly as does effective board engagement. And ultimately results in poor organizational performance. The board becomes an enabler of poor performance instead of good healthy performance.
There are several other dysfunctional boardroom behaviors ranging from the subtle lack of resolution or indecision to the more obvious disrespectful verbal interactions that can be avoided and corrected by board leaders in board meetings. Therefore, it’s vital for board leaders to effectively facilitate meaningful board engagement. The board leader can accomplish this in three main ways:
Don’t neglect the fundamentals: There are several fundamentals of meeting facilitation that board leaders should make every effort not to neglect. Some of most critical ones include
Thoughtful preparation for board meetings; this is much more than advance reading of the board materials. It’s crystalizing the meeting outcomes, potential challenges and the dynamic resolution approach for thorny issues or inappropriate director behaviors.
Acknowledge board members and pre-engage before calling the meeting to order. Engage in conversations and interests of board members outside board matters
Frame Strategic Intent; Providing board members with the relevant context for the meeting helps align and orient everyone with the priorities of agenda topics
Maintain flexibility - cultivate a flexible mindset that allows for a dynamic response to unplanned or unexpected situations that may introduce time constraints. The key is to allow room for material and significant issues to be discussed that align the expected objectives and outcomes of the meeting
It that should not be neglected. Preparation for the meeting and understanding the objectives and expected outcomes. Frame the strategic intent of the meeting Prioritization to make the most of the time
Standard baseline facilitation - time management, moderate speaking time and avoid certain directors dominating the conversations, leverage the collective intelligence in the room, prioritization, difficult and disagreeable personalities, etcRelentless and dynamic focus on the fundamentals.
Create Psychological Safety: Psychological safety is about proactively creating the conditions for full engagement by all board members. It’s about intentionally leveraging the collective intelligence and experience in the boardroom to arrive at the best possible decision. This is especially true for newer board members. It’s also about seeking to maximize the discretionary effort and contributions of board directors. But how?
Model the desired behaviors: Admit failures and weakness, Maintain Serve Mindset: Humility, leadership character, Executive Session / Follow Up Board Culture: reading the room, showing appreciation, setting the tone at the top, dealing with disagreeable/conflicting personalities.
Show appreciation for engagement
Invite alternate perspectives and dissenting views - Inviting and encouraging perspectives and participation from more reserved directors. Encourage questions and comments from reserved directors or be a surrogate for them as needed.
hybrid facilitation is more challenging
The objective is to These practices, will cultivate an engaging boardroom culture and will lead to increased effectiveness of the board. Redirecting and navigating through thorny discussions while maintaining respect for the directors, time and the importance of the topic. Keep the meeting moving along and time/traffic cop
Leadership Moment: If you’re a new board leader, either board chair, lead independent or committee chair, you will inevitably be faced with one or more situations described above. You may, and probably will, be tempted to ignore, neglect or downplay some of the more subtle signs of ineffective behaviors. There will be that still small voice that will whisper something like “you should probably ask who has the follow up action or what the action is” but before you blink, the voice is gone and you’re likely to forget it. This is your leadership moment to listen to that voice and serve in the role you were elected for. Don’t create a habit of missing such moments.
