Wednesday, October 21, 2020

Pitfalls & Perils in the Corporate Boardrooms

Leadership is not a setting hour work or the status quo to “command & control,” but a continuous self-awareness, self-motivation, self-development and self-mastery journey. 

In today's ever-changing business dynamic, the beauty of the newly established digital landscape is the fresh insight of the business and a holistic view of the business ecosystem. The rate of change has accelerated, indicating that business leaders must learn how to strike a right balance between managing complex issues today and be forecasting the uncertain issues of tomorrow. 

Fundamentally, the corporate board's role is to pull management out of the trees to see the forest; to understand the business landscape and how it will address it; to oversee business strategy and monitor business performance. However, corporate board leadership is a tough journey. Never think you know it all even if you are at the top of the organizational pyramid. It’s critical to identify pitfalls and perils on the way, and fill blind spots for improving governance effectiveness. 

Lack of awareness: Leadership is about change and progression. One of the most important traits for senior leaders such as BoDs is self-awareness- the ability to understand your leadership strength and impact, and the strong “digital awareness” - the ability to have a sense of the business direction, shape the organization of the future, sense emergent opportunities, predict potential risks, always have a strong understanding of what the business does, how it does it, and how it could be better. Lack of awareness will cause egotism, ignore knowledge limitation, too much gut feeling, which further leads to misjudgment and leadership effectiveness. The first sign that you have a great leader on your hands is the very willingness to look within, integrate the emotional body, and expand consciousness. The self-awareness leadership is only achieved once a leader has fully integrated themselves via deep introspective work and has the willingness to do this.

Nobody is perfect, you should always be self-aware, including your flaws and shortcomings. Better understand yourselves and how knowing who you are and your own style of influence affect how you respond and interact with your surroundings. Having a learning curve awareness is also important for not only becoming learning agile, but also taking control of softer issues such as setting policy, leveraging strategic thinking, setting risk appetite, and having the sensitivity of the pitfalls on the way. The board's continuous self-awareness and deep common sense lead toward ”Effective Judgment," which has been defined as leveraged sense and sensitivity, knowledge, and experience to come to an effective strategy oversight.

Lack of impetus: Change is always difficult, often, the root cause of change failure is due to the static mindset or inertial attitude from the top level of the organizational hierarchy. The good moment to change is when the top senses the urgency and the bottom feels the pain, and change inertia is minimized via common understanding about imperatives of changes as well as the impact they could make. Change starts with a "sense of urgency," which can only come from top management and BoDs. The corporate board should set the tone to “baking in” the vision into the culture and drive changes proactively.

The board leadership, in this case, is not just a matter of traits—persona, tough-mindedness, or bottom-line thinking. It’s about vision, direction, inspiration and alignment, focusing outward scanning the horizon, looking for future opportunities or possible perils. It is absolutely necessary for leaders to create discomfort, have a sense of urgency and get others thinking differently. Take Entrepreneurs’ spirit to turn the status quo upside down.  Some leaders use a counter argument in open discussions just to ensure multiple points of view are explored, bringing together management teams in a common and committed effort, and moving people in the right direction despite many obstacles on the way.

Lack of decisiveness: Making strategic decisions is one of the most important tasks of the corporate board. If the corporate board as a team is unable to assess the risk and it is easier to put off the decision sometimes on the pretext of having insufficient information. In specific, there are many causes of indecisiveness including a linear and static decision-making scenario that commits to a singular path; or there tends to be definitely perceivable choke points due to the inadequate delegation. To make effective decisions, you need to consider internal decision factors such as decision goals, situation, context, relevant information, and knowledge, the organizational capabilities and resources, as well as external decision factors such as technology factors, political and legal conditions, competition and consumer demands ‘

There’s knowing unknown, there’s unknowing unknown, everyone perhaps has some pitfalls blocking the way. But as a senior corporate board leader, the blind spots will cloud your vision, trigger your negative emotion, cause your decision ineffectiveness, and compromise your leadership competency. Being mindful of the ability to choose, and not being bantered about by habitual emotions and reactive thought. A decisive board needs to take a structural decision-making scenario: Do it, Defer (non-urgent), Delegate (unimportant) or Dump. It is important to identify the choke points when the responsibilities are being created and helps to improve the board decision effectiveness via understanding the interrelationship of timing, group, and decision making. BoDs should always look for the complementary mindsets, diverse experiences, and differentiated skill sets so that collectively, they can avoid groupthink, make sound judgments, and improve decision maturity.

Lack of cohesiveness: Leadership coherence improves information/idea flow, streamline horizontal expansion and enhances vertical accountability. Lack of cohesiveness is often caused by silo mentality, stale knowledge or homogeneous team setting, leading towards slowness and small-thinking, and generates multiple gaps. Generally speaking, the difference between senior and junior (middle) leadership is not about how many answers you have, but about how well you can ask the open questions to attract best answers and synthesize them into profound insight and an objective understanding to orchestrate changes frictionlessly.

Due to high velocity and complexity of modern business, there are different business dialects, communication styles, and business contexts that can shift frequently. Leadership cohesiveness depends on how coherently the board leaders can make influence from mindset to behavior, and evolving to what is needed next for radical changes and moving the needle forward smoothly. The corporate board commitment rests mainly in multiple aspects, including leadership’s coherence with a strong vision to advise the management and steer the business in the right direction; as well as making continuous and effective communication to set good policies, and making sure all of the pieces “fit” seamlessly.

Lack of greatness: Great leadership is transformational, a transformational leader is a person who is not afraid of doing what needs to be done for the good of the organization - either in good or difficult times. There are many informal ways to grow leadership and amplify their leadership influence. Lack of leadership greatness has many reasons such as: close-mindedness, unconscious biases, inflexibility, cultural blindness, negativity, egotism, low EQ, etc. One area that will have to change is the passive leader in the corner office. The weight falls on the shoulders of the leaders to adapt proactively. The top board leadership has to shift from being just traditional/transitional to being transformational today with strong communication, collaboration, coordination, and cross-cultural cognizance and intelligence.

To spread leadership influence, from top down, digital leaders today should also spend time on developing themselves and others, and set a strong leadership tone in building the culture of learning and authenticity. At the board level, great leadership wisdom embraces inclusion - recognizing, respecting, managing and leveraging similarities and differences to drive transformative change globally. On the leadership journey from good to great, any leader who is willing to admit "I've made mistakes in the past," or "I'm still learning how to do this better" is going to be approachable and set the right example for others to follow.

Leadership is not a setting hour work or the status quo to “command & control,” but a continuous self-awareness, self-motivation, self-development and self-mastery journey. And most people are looking for a great leader who makes progress, rather than perfection. High mature leadership should inspire innovation, and evoke positive emotions in order to make change sustainable and lead business transformation effectively for the long term.


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