Building a Better Board event 270908

1. Building a better board
27th August 2009

3. What is the starting point?
What are you
deeply
passionate
about?
What can you What drives
truly be best your economic
at? engine?

4. “The best way to predict the
future is to create it...”
Peter Drucker

10. Creative
Slow Start / Fast Finish
Vacillating
Precise Temperamental Competitive
Accurate Confrontational
Concern for Quality Direct
Critical Listener Results-Oriented
Non-Verbal Communicator Sense of Urgency
Attention to Detail Change Agent
Product-Oriented Process-Oriented
Slow to Change Quick to Change
Self-Disciplined Independent
Pessimistic Optimistic
Accommodating High Trust Level
Dislikes Confrontation Not Fearful of Change
Persistent Good Supporter Contactability
Controls Emotion Team Player Rather Talk than Listen
Adaptable Persistent Verbal Skills
Good Listener Cooperative Projects Self-Confidence
Sensitive to Others’ Feelings

11. Driving
Demanding
D Unconquerable
Contentious
Aggressive
Pioneering
DRIVING STYLE = Tell Assertive + More
Controlled Behavior
People with a Driving Style appear to know what they want and seem to display little
difficulty expressing their conclusions about anything that concerns them. Their
slogan is "Letʼs get it done and get it done now." They tend to focus primarily on
the immediate time frame with little concern for past or future. Driving people appear
swift, efficient and to the point. They know what they want and become impatient
with delays. They tend to show little concern for the feelings of others or for personal Peaceful
relationships. Some consider their actions harsh, severe, or critical since they give Unassuming
such limited attention to relationships. Others may see this behavior as efficient Humble
and decisive. This style seeks control through the use of power in situations which Docile
might deny them freedom to act as they wish to achieve their perceived objectives. Acquiescent
Meek

12. Effusive
Charismatic
Inspiring
I Optimistic
Demonstrative
Enthusiastic
EXPRESSIVE STYLE = Tell Assertive + More
Emoting Behavior
People with Expressive Style focus their attentions on the future with intuitive
visions and outspoken spontaneity. They can be seen as imaginative and
creative as they interact with others. Expressives can generate enthusiasm. Their
behavior can be intensely stimulating, exciting and fun for those who get caught up in
the Expressiveʼs dreams. They tend to make decisions quickly based on how they
feel about a situation. They appear warm and approachable, yet competitive for Detached
recognition and involvement in relationships. Some see the Expressiveʼs behavior as Reflective
flighty, impractical and overly emotional. Because of their desire to act on opinions, Analytical
hunches and intuitions, rather than hard facts, expressive behavior can lead to Critical
mistakes and frequent changes of direction. Calculating
Skeptical

13. Adaptable
Static
Systematic
Methodical
Deliberate
Habitual
S
AMIABLE STYLE = Ask Assertive + More
Emoting Behavior
The Amiable Style is relationship oriented. Amiables interpret the world on a
personal basis and get involved in the feelings and relationships between people.
They prefer to get things done with and through others. Amiables look for personal
motives in the actions of others. They may find it difficult to understand that some
people react purely from the information at hand or the practicality of the situation or
from a desire to make the future more interesting and exciting. The Amiableʼs
sensitivity for others often lends joy, warmth and freshness to a social situation. Intense
They are often good team players. People tend to readily communicate and share Pressured
with Amiables. They frequently stick with the comfortable and the known. They tend to Impulsive
avoid decisions which might involve personal risks and conflict. As a result, they can Excited
appear slow or reluctant to change when the situation demands it. Frenetic
Zealous

14. Painstaking
Wary
Meticulous
C Precise
Perfectionist
Systematic
ANALYTICAL STYLE = Ask Assertive + More
Controlled Behavior
The Analytical (C) Style appears to live life according to the facts, principles, logic
and consistency one can find in reality. People with Analytical styles tend to behave in
ways which fit into their overall theory and ideas about the world. Others may view
them as lacking enthusiasm or appearing cold and detached. They project the
image of good planners, organizers and problem solvers with the ability to work out
tasks systematically. Because of their apparent concern for facts, logic and serious
organization of thought, coupled with a desire to be "right", Analyticals often display
a reluctance to declare a point of view. They have a need to analyze all significant
possibilities in an attempt to avoid any chance of making illogical or inconsistent Free
decisions. A faith in principles appears to assume greater importance than personal Radical
friendships or personal gratification to an Analytical Style. Fearless
Free-spirited
Uninhibited
Revolutionary

15. The impact of
leadership
Leadership Company Business
behaviour culture performance
70 % 30 -180 %

16. Mind the gap!!!
Want leaders in Saw demonstrated in
Base: 100 Gap
general to % own organisation %
Create a feeling of energy, fun
and excitement in the 93 32 -61
organisation
Be good communicators and
listen more than they talk 96 43 -56
Encourage creativity and
innovation 98 56 -42
Present an open and honest
face to their people 98 62 -36
Show genuine appreciation of
contribution and efforts 98 76 -22

17. Choices, choices...

19. Glance: Six tactics related to four themes are most strongly correlated with success
in transformations.
Exhibit title: Effective tactics
it 2 % of respondents, n = 2,994
ctive
ics Transformation Tactic Did your company Degree to which transformation was successful, %2
theme use this tactic? Not at all Somewhat Very Extremely
Aspirations Establishing well-defined Yes 2 42 46 10
stretch targets
No1 9 70 18 3
+167%
Leadership Assuring strong CEO Yes 3 48 40 9
involvement
No 9 67 21 3
+104%
Process Organizing a clear Yes 2 47 41 10
structure for change
No 7 62 27 4
+65%
Energy Ensuring frontline Yes 2 46 43 10
ownership of change
No 7 62 26 5
+71%
Implementing equal Yes 2 52 38 7
mix of positive
and negative messages No 7 60 27 6
+36%
Web 2009 Launching large-scale, Yes 1 46 44 9
collaborative planning effort
Voices transformation No 7 60 28 5
+61%
Exhibit 3 of 3
1 In this and other cases, denotes any response other than yes (eg, stretch targets were set but they were not well defined).
Glance: Using all tactics doubled the chance of success for everyone, even those in a
2Figures may not sum to 100%, because of rounding.
defensive context . global survey on performance transformation
Source: McKinsey Quarterly, “Corporation Transformation under
Source: 2008 McKinsey
Pressure”, 2009
Exhibit title: Increasing the odds

20. 1 In
Glance: Using all tactics doubled the chance of success for everyone, evenbut they in a not well defined).
this and other cases, denotes any response other than yes (eg, stretch targets were set those were
2Figuresmay not sum to 100%, because of rounding.
defensive context . global survey on performance transformation
Yes, the tools really
Source: 2008 McKinsey
Exhibit title: Increasing the odds
work!!
Share of transformation described as extremely/very All transformations
successful, % of respondents, n = 2,994 Progressive transformations (offensive and proactive)
Wholly defensive transformations (defensive and reactive)
100
Success rate of transformation, %
80
Share of success
60 reported independent of
any tactics
Progressive
40
Wholly defensive
20
Used none Used any Used stretch Used stretch Used all 6
1 tactic targets tactic targets tactic tactics
only plus any 2
others
Source: McKinsey Quarterly, “Corporation Transformation under Use of tactics
Pressure”, 2009

22. Where to focus your effort?
Score Customer measure Versus Competitors
Better than competitors – consistently
1 Order winning – a crucial advantage
considerably better than our nearest competitor
Better than competitors – consistently better
2 Order winning – an important advantage
than our nearest competitor
Better than competitors – marginally better than
3 Order winning – a useful advantage
our nearest competitor
The same as our competitors – often marginally
4 Order qualifying – good industry standard
better
The same as our competitors – about the same
5 Order qualifying – mean industry standard
as most competitors
The same as our competitors – often within
6 Order qualifying – close to rest of industry
striking distance of main competitors
Less important – could be important in the Worse than competitors – usually marginally
7
future worse
8 Less important – rarely considered Worse than competitors – usually worse
9 Less important – never considered Worse than competitors – consistently worse

23. Competitive offering Customer measures
(1-9)
Versus competitors
(1-9)

24. 1
2
3
Versus competitors
4
5
6
7
8
9
9 8 7 6 5 4 3 2 1
Customer importance

25. 1
2 Excess?
3 Appropriate
Versus competitors
4
5
6
7 Improve
8 Urgent action
9
9 8 7 6 5 4 3 2 1
Customer importance

26. Doing for today
Strategically adding value! High Potential Projects !
What? - Initiatives and programmes critical for our future What? - Innovation/Potential strategies/blue sky
competitive success and normally market driven ! developments!
Key Operational Activities Support Processes !
What? - We depend on these activities for competitive What? - Drives up our productivity!
success today!

27. Turning the anxiety into excitement,
direction and focus
• Look out
• Look down
• Look around
• Look in the mirror
• Look to your team
• Call for action

28. Look
down,
focus,
see, strike

29. Strategic management
External environment
Industry dynamic
Competitors Customers
Analysis
Strategy
Implementation
Culture
Individuals
Leadership
‘How’?

30. Map your strategy
What strategic results must we deliver?
What is our customer or stakeholder offering?
How can we deliver this offering efficiently?
What do we need to develop in the way of skills and technology to do this?

31. Focus for tomorrow
Strategically adding value! High Potential Projects !
What? - Initiatives and programmes critical for our future What? - Innovation/Potential strategies/blue sky
competitive success and normally market driven ! developments!
Key Operational Activities Support Processes !
What? - We depend on these activities for competitive What? - Drives up our productivity!
success today!

32. Contribution to Knowledge of key
performance areas
Understanding of
role
1 = Ineffective skills or practices
Quality of input
5 = Very effective skills or practices

33. What Board Directors Need to Know
Does management have a comprehensive strategy and operating plan for the company to realise
Strategic Direction
its performance potential?
Past & Present What has been the company’s financial and market performance compared with its historical
Performance performance, projected performance, and competitors’ performance?
Underlying Causes What specific competitive strengths and weaknesses, market forces, or drivers of profit have/will
determine performance results?
Performance Potential What are the reasonable objectives for and limits to the company’s growth, profitability, and
appreciation of shareholder value?
Management Does the board adequately understand and support resolution of the near-term, intermediate,
Priorities and long-term priorities of management?
Resource Allocation Are the necessary human, financial, physical and other supporting resources provided and
properly allocated to achieve success?
Management Does the chief executive provide the leadership required by the company and does the
Organisation organisation have a succession plan for this position?
Financial Are financial information systems, control processes, delegation powers and reporting
Accountability responsibilities established and audited?
Operational Controls Does management utilise an effective system of key performance indicators to monitor and
control operating performance?
Constituency Are mechanisms in place to ensure conformance with legislation and regulations protecting
Protection customers, employees, and the community?
Litigation & Does management adequately report, control, and provide for all material disputes of a legal,
Disputation financial, or regulatory nature?
Crises & Contingencies Are effective risk management processes in place to prevent physical and financial crises?

34. Getting the balance right
High performing boards
High Challenge
High
Fracture
performing
Low High
Cohesion Cohesion
Group
Apathy
think
Low Challenge

35. The Learning Board
Accountability Policy
External
Formulation
Board Board
Conformance Business Performance
Brain
Supervising Strategic
Internal
Management Thinking
Short term Long term

36. The better board
Quality of Renewal!
Avoiding insularity; provoking insight and knowledge from
outside the business !
Encouraging organisational development and risk taking !
Quality of Direction!
Focusing the organisation strategically on::!
–! Goals, direction & performance !
–! Developing organisational capabilities !
–! Driving development and value initiatives!
Quality of Interaction!
Encouraging critical thought through effective dialogue!
Capitalising on diverse viewpoints!

37. Personal board balance sheet
Relationship with the board! Your role in delivering the business strategy!
Your role in generating new strategic
Your power and influence in the business options !

38. The tone we need to set
Clear Strategies
& priorities
Effective Senior Team Top-down direction
& upward influence
Open communications
Quality of Learning
Effective Integration Leadership skills
& coordination & behaviours
Quality of Implementation
Adapted from M Beer and R A Eisenstat; The Silent Killers of Strategy
Implementation and Learning. Sloan Management review, Summer 2000

39. Governance within the
board Recruit directors with the courage to challenge the CEO.
1. Select the right people! Look for self-confident CEO-level candidates who can
engage in real debate without dragging in the egos !
Orient new directors by arranging face-to-face meetings
with all the top executives. Provide briefing books, arrange
2. Train, train, train ! site visits, and factor in time to build relationships.
Remember ongoing education for all directors !
Deliver relevant information early and in multiple formats.
3. Inform and communicate ! Leave time on the agenda for open discussion. Don’t skimp
on site visits and retreats; they can yield give-and-take!
Make sure only the independent directors recruit new
directors, control the committees’ chairmanships, hold
4. Balance the CEO’s power ! meetings with the CEO, and control succession.
Remember that committees can appropriate power !
Hire CEOs who value teamwork and want full feedback.
5. Establish new behaviours ! Establish a tone of collegiality and “constructive scepticism.”
CEOs and directors must nurture a culture of listening !
Board membership requires time to prepare, time to
6. Devote the time! discuss, time to develop relationships. All directors must
open up their schedules to absorb information and make
decisions !
Establish a tradition of continual improvement. Directors
7. Evaluate and improve ! should examine and refine practises as do other
professional teams. Evaluate the CEO, evaluate the board
as a whole, and evaluate individuals !

41. Company Direction
es which include case studies, participative group Enrol onto The
nd post-course support through e-learning, our £6,1
he Certificate and Diploma in Company Direction. The Certificate in Company Direction This
ultimately lead to Chartered Director status. Attend 6 modules and complete: entire
Role of the director and the board
will equip individuals with essential skills and abilities (2 days + 1 day post-course e-learning*) The
e effective in their role, and are designed to fit around Finance and non-financial directors (3 days) £2,4
Strategic business direction (2 days + 1 day post-course e-learning*)
IoD m
The
Effective marketing strategies (1 day)
w difficult it can be to commit large blocks of time to People mean business (1 day) For m
wledge and skills, so we have designed our Leading strategic change (1 day) help
delivered in a number of formats. The courses and *E-learning is a mandatory element of these courses.
guide
route
he Certificate and Diploma are offered at various
ut the UK and offer great networking opportunities as On successful completion of the examination, receive The
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Attend Developing board performance (3 day exercise) to put the
Why
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*This module can only be completed once all the Certificate courses have been
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42. What’s in it for me?
• Demonstrate to shareholders, clients and customers that
the company is professional and successful
• Operate at a strategic and tactical level to establish and
sustain growth
• Appreciate all aspects of effective business leadership
and sound corporate governance
• Improve the boards effectiveness and their personal
contribution
• Enhance career prospects as a director or non-
executive director

43. • “My broad understanding of exactly how, for example, marke<ng or strategic
leadership play a part in the overall success of a business, was deepened into a real
apprecia<on of the significant contribu<on these elements make and how everything
fits together to make a successful company.” Sue Hook, director of Sapience Human
Resources.
• “The absolute joy of this programme is that it pulls together the reality of industry
with robust academic thinking, which for me has had huge benefits.” David Bone MD
of Somar Interna<onal Ltd.
• “The combina<on of being tutored by people with relevant experience, prac<cal
applica<on to your business and the ability to network with like‐minded individuals
really appealed to me and the course certainly didn’t disappoint.” Emma Warren, MD
of PorOolio Directors Ltd.
• “I learnt a huge amount and now feel much more confident in my role. I have a much
bePer understanding of organiza<onal governance, strategic direc<on, human
resource management, and finance. I thoroughly enjoyed working with a group of
people from very different business backgrounds and it gave me great sa<sfac<on to
gain new insight, knowledge and skills. All par<cipants were highly mo<vated to
succeed, and keen to learn and share ideas of best prac<ce from different sectors. I
was struck by how much was relevant and transferable from business to my work in
health care.” Murray Fletcher, Director of Medical Services, St Margaret’s Somerset
Hospice.

44. • Ann Cullum, Executive Education
• Mike Carter, CLS
• Jim Hanbury, Leadership South West

45. • Thank you!!!
• Drive safely and have a great
day!