I was invited to speak to the Virtual Advisory Board, UK Chapter. This is an article that appeared in VAB Newsletter, March 2021 issue. It is a summary of my talk to the YPO chapter on how to become a board-ready leader.
Vitaly talked about how changes brought about, or rather hastened, by the Covid pandemic are impacting the roles and needed counsel from board of directors members and board advisors. He noted that specific phenomena such as remote working, customer buying patterns and the shift to digital sales are all contributing to a new view of how boards should work. In fact, they have expedited a major shift in the role board members and advisors are required to play in the running of the company.
This involves mainly a functional shift where boards are no longer isolated, primarily managerial bodies, but rather they are integrated parts of the living corporate organism and require more interaction with the team(s) driving the business. Vitaly’s many years of experience listening to board members and company executives speak about operational challenges have shown that boards, to succeed, will have to move from the previously-mentioned “management” to new “leadership” roles. It is no longer enough for boards to passively monitor traditional issues such as governance, cost controls, succession management, etc. Today, they need also to focus on issues that tell and guide their organization’s story and steer the course for the future, i.e. topics like ESG, speeding up digitalization, monitoring diversity needs (on all levels), and assessing/monitoring the business’ future viability (i.e. do we deliver a product/service that will be relevant in 5 or 10 years).
Although such skills remain relevant, boards are evolving from lawyer- and accountant-heavy set-ups to member structures that reflect a broader variety of experience. This includes greater structural diversity that factors in cross-industry experience, cross- gender inputs, etc. Vitaly notedthat a study by Deloitte offers statistics showing that diverse boards deliver broader, more profound insights and provide greater value in times of crisis. This broader set of views then feeds into and nourishes boards’ role as co-authors of a business’ story: a narrative created by a collectionof beings that form and drive it.
Businesses have moved far past the industrial era where boards often addressed fine-tuning or streamlining operations. Past machine-think has transformed into an eco- system view. This is where language has a dramatic impact. Organizations are no longer siloed parts that work together in mechanical orchestration, rather they are a collection of collaborating beings leading other beings in interrelated eco-systems much like those that make up the human body.
So, in this new structure, much like a doctor tells you to “listen to your body” when diagnosing your health, successful board advisors and NEDs need to listen to the beings that form the leadership teams of companies they advise. This is the critical factor in the construct that Vitaly and his business partner, Norman Wolfe, speak of when describing The Living Organization®.
The latter views businesses as bodies consisting of three key parts: Activity (the work and tasks created and done by beings); Relationships (the collaborative efforts between beings that drive the activities forward); and Context (the guiding premise or story that holds the Activities and Relationships together and rallies all Beings behind the Living Organization’s mission). The last element, Context, often proves most difficult for boards and board advisors/ NEDs to grasp and deliver on, despite its critical importance to organizational functioning. It is Context that gives leaders leverage and eventually brings success. It is difficult for beings to coalesce behind activity; however, they will come together behind a compelling story (Context) that gives their activity(ies) meaning.
This is the feature that distinguishes today’s board-ready leaders. They a have a 3D vision of their organizations: looking at all aspects of the living corporate organisms they lead. They fully understand all Relationships, they can justify all assigned Activities, and they can tie the latter to an inspiring Context that drives their business’ continued health. Board members and advisors as true leaders are able to guide and adjust Context (i.e., constantly reassess the narrative motivating leadership teams and business units) so that the business’ many eco-systems continue to work together smoothly and maintain meaningful buy-in to their organization’s overarching story. This ensures the company’s future success as a living organism led by a CEO who has co-created and communicates the organism’s Context and supports the right mindset. People who do not subscribe to the organism’s (business’) story will move on and what remains is a unified set of beings who have created a mature, healthy, holacratic eco-system that drives the company forward.