The Key to Solving Deadlocked Boards
New research finds that deadlocked boards lead to entrenched CEOs and argues in favor of director term limits.
Trust is a vital requirement in any leadership endeavor. But the coronavirus pandemic has raised the stakes to historic levels. We are faced with conditions that are mortally threatening, fraught with uncertainty, and shifting rapidly. In these frightening circumstances, trust in our leaders has become the indispensable factor.
The situation is entirely new, with few guidelines from the past. We have urgent questions: “When will the number of cases reach their peak? Will the healthcare system be able to cope? When will there be a diagnostic test, an antibody test, a therapy, a vaccine? When will things return to normal? The common answer from the experts is, “We don’t know. We have not seen this before. We are in learning mode.” Meanwhile, during the shutdown, a vast number of people have lost their livelihood and wish for a rapid opening of the economy. We are navigating a delicate balance between safety and financial security.
A loss of trust in our leaders amid this crisis would have devastating consequences. This raises the question: What are the essential building blocks of trust?
Some years back, I was advising a professional services firm whose vision was to become a “trusted advisor” to its clients. I was asked to research the subject of trust and come up with a set of factors that were concrete and measurable. Trust is a complex field with nuanced answers. Nevertheless, I distilled what I learned into five key pillars of trust. My client applied these elements successfully in their client service model. My investigation revealed that we will trust a leader if we believe the following five things are true about them:
Leadership is not about power; it is about service. The first task of a leader is to “tune in” to the needs and expectations of their followers.
When Nelson Mandela was released from prison and elected president in South Africa, he faced the prospect of a racial conflict born of years of resentment. Yet against all odds he achieved a peaceful transition to a representative democracy. He was offering the blacks the chance to participate as equal citizens, but at the same time he recognized that the whites were afraid they would face a switch from being the oppressors to becoming the oppressed. Acting on this insight, Mandela took steps to demonstrate his genuine love for all South Africa’s citizens and his determination to create a “rainbow nation.”
His most dramatic action, seen by millions on TV, was his enthusiastic support for the almost all-white South African rugby team when they won the World Cup in 1995. It was a hugely unifying moment. Mandela saw that “The struggle was not so much about liberating the blacks from bondage, it was about liberating white people from fear,” according to commentator Tokyo Sexwale. Mandela’s understanding of the concerns of his fellow citizens was a pivotal factor in his majestic achievement.
Empathy alone is not sufficient. Leaders must have the ability to act on it. They must demonstrate competence.
The current pandemic calls for mastery of a special kind of competence: adaptive planning in the face of fast-moving events fraught with risk and uncertainty. Former military general and US president Dwight D. Eisenhower once said, “In preparing for battle I have always found that plans are useless, but planning is everything.” In dynamic conditions, it is the planning process that matters above all else. This demands a system of constant assessment and re-assessment based on a fearless, fact-based analysis of emerging realities.
New York governor Andrew Cuomo provides daily briefings on the coronavirus, showing trends, explaining their significance, defining the learning, and describing what must be done, when, and by whom. Polls show that the citizens of New York feel that their destiny rests in capable hands.
In a crisis, it is a mistake to try and go it alone as the “heroic leader.” People support what they help to build. I recently read how a CEO of a manufacturing business involved his employees in creating the right solutions. His only injunction was: “Please work together to build a working environment in which you feel safe.” They were amazingly creative. They built a tent at the front entrance, and as employees passed through it at the beginning and end of the day, they were sprayed with a special sanitizer they themselves had devised in the plant. Disinfected vans transported everyone to work and home again, so that public transportation was avoided. Finally, they introduced ingenious ways of practicing social distancing at the plant while maintaining productivity. Everyone took pride of ownership in their plan.
Effective leaders are selfless, always placing the interests of their followers above their own. Motive is determinative in issues of trust, and people feel betrayed when a leader is seen to be pursuing self-serving aims. It is in our actions that we reveal our true intentions. “What you do speaks so loudly that I cannot hear what you say,” said the philosopher Ralph Waldo Emerson.
On a personal level, I was deeply influenced by a patriotic act on the part of my father during World War II. There was no conscription in my native South Africa, yet in 1942 my father decided to volunteer and leave his family to serve a cause he believed in. As a young boy, I vividly remember listening to the discussions around the kitchen table. My mother kept asking why he was prepared to put himself in harm’s way in a war so far away from home. His simple reply was, “Because it’s the right thing to do.”
Mercifully, my father returned safely at the end of the war. Because of his selfless example of service to others, I have remained keenly aware of the importance of moral courage – stepping up to a challenge based on principle rather than expediency, and facing the risks involved.
Former New York City mayor Ed Koch was known for spontaneously asking strangers he encountered, “How am I doing?” I think he was asking the wrong question. It centered on him. I suggest the right question should have been, “How are you doing?” And then to listen intently to the answers.
Consistency lies at the heart of effective leadership. Good leaders keep their promises, large and small. If we break our small promises, we won’t be believed when we make large ones.
Promises should be made with care, not bravado. During my time as a CEO, it became necessary to sell off one of our subsidiary companies. The question was whether to tell the affected employees in advance or simply wait until the sale was a fait accompli. The arguments went in both directions. I came to the view that communicating upfront was the best course despite the risks of destabilizing the business. These things are seldom kept secret anyhow, and rumors produce a perverted version of the truth. Then, when the time comes to let them know the details, distrust has already set in.
But what promises could I offer them? At the meeting I told them that I was unable to guarantee continuity of employment by a new owner. But I did make this promise: I would try my hardest to find the buyer most likely to keep the people, provided I could also serve the shareholders with a reasonable price for the business. It was a difficult meeting, but the employees understood the logic and appreciated the promises I made. The business remained steady.
Ultimately, we found a buyer who was prepared to keep most, but not all the employees. The outcome was not perfect, but the employees saw that I had tried my best as promised. The resulting goodwill was very gratifying, and all the other employees in the company shared in the positive feeling that we had behaved in a principled way.
To tell the truth is to have faith in your people. Leaders sometimes believe that they can handle bad news, but that the people below them are unable to do so. This assumption is not only arrogant; it is false. Character and fortitude are not functions of rank. People can usually handle unpleasant truths, but have difficulty dealing with the withholding of truth.
The golden rule, particularly in times of crisis is to tell the unvarnished truth – no sugar coating, no spin. Here again I cite the example of Governor Andrew Cuomo. New York has become the epicenter of the pandemic. The situation is dire. In his daily briefings Cuomo always emphasizes that he will start with what the data says; good bad or indifferent. Only then will he offer his opinion and talk about the decisions that must follow. “The shared truth must guide us,” he insists.
There is a need to guard against the confirmation bias and the allure of preconceived ideas. It is easy to deceive through omission. Picking out favorable data and leaving out or de-emphasizing negative information distorts truth and misdirects behavior. This can undermine the ability of citizens to successfully manage their personal lives through the crisis.
Leaders must have the courage to make tough decisions in the face of uncertaintyThe pandemic is moving rapidly, and the realities change daily. It is essential to adjust promptly to evolving circumstances. Making the wrong calls can cost lives, but delay can be even more costly.
Mistakes are inevitable. But it is important for leaders to have the humility to admit their mistakes. Denmark seems to be managing the pandemic with relative success. One reason is cultural. Citizens trust their government. When their prime minister, Mette Fredericksen, laid out the guidelines she said, “This is a new situation to all of us. Will I make mistakes? Definitely! Will you? Yes, you also. But we must listen and learn from each other.”
Herein lies the lesson. Admitting mistakes presents an opportunity to learn from them. Burying mistakes or denying responsibility destroys that opportunity. The goal is to ensure that the value of the learning will be bigger than the cost of the mistake. That’s what progress is made of.
Truth and trust – there’s only one letter that’s different in those two words, and maybe that’s because the one leads to the other. By striving for honesty in the face of adversity we strengthen the bonds that help us all get through the crisis together.
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