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COMMUNITY UPDATE

Criticaleye's Community Updates are read each week by Members, registered users, and subscribers globally. Click on any of the topics below to see the corresponding newsletter. If you would like to comment further on any of these topics, write to us via info@criticaleye.com.






Complacency can creep into any successful senior leadership team. Rather than looking at ways to break new ground and take a business forward, executives start to adopt defensive behaviours and their thinking becomes stale.
 
“Leadership teams have to be very open to new ideas,” says Anthony Fletcher, CEO of Graze. “They have to be a little bit paranoid about the businesses they run and what may happen to them.”
 
That openness and drive has to extend beyond the chief exec and his immediate reports. Richard Buxton, Group HRD at Brewin Dolphin, says: “We used to think about the leader as the talismanic person at the top of the organisation who knew everything, so the old style lead-from-the-front person.  
 
“Nowadays we’ve got to get rid of that hubris. We’ve got to realise that as a leader we don’t know what’s going on all the time. We’ve got to listen to people below us; we’ve got to look outside of our comfort zone; outside of our industry and sector [to] understand what’s going on.”  
 
To achieve this, it’s vital to recruit individuals with new skills and perspectives, but you also want to retain people with the expertise and knowledge that comprise an organisation’s corporate memory. Mike Hughes, President UK & Ireland for Schneider Electric, explains: “It’s really trying to balance that challenge of saying, ‘I need to bring a certain amount of people in from outside who have travelled this journey or who have different skills, but I also need my own people inside to be able to step up and manage that journey as we go forward. I think finding that balance between the two is the critical point.”
 
On top of retaining a healthy sense of paranoia to stop complacency creeping in, execs also need to be able to handle enormous amounts of pressure as they juggle the various demands from direct reports, peers in the leadership team, customers, suppliers and the Board.  
 
Jane Griffiths, Global Head of Actelion Pharmaceuticals, comments that all businesses need strong leaders, but there are some circumstances where tenacity is crucial. “It can be very difficult operating in a changing environment. Delivering on the strategy, delivering the numbers, and having that resilience is incredibly important," she says.
 
 
Guiding Light
 
The Chair and non-executive directors have a particular responsibility to ensure senior leaders are thinking about how customers are changing, what skills the business needs and how its commercial model is evolving. Tony Hayward, Chair of Glencore, says: “One of the principal roles of the Board… is to lift the heads of the management team and get them out of the day to day and look… to the medium and longer term and engage with the team in that debate.”
 
The temptation for Boards is to focus solely on results but that will drive behaviours which damage the long-term performance of the business. Phil Smith, Chair of IQE and a Board Mentor at Criticaleye, says: “By their nature, teams focus on the short term because it’s easy to do and it’s in their face. They have to do it. Things happen, you’ve got to make the numbers...
 
“So, I think the role of any non-exec, and particularly the Chair and the Board overall, is to help the team try to think a bit more contextually around what’s happening in the world; what the competition is doing; how your strategy is relating to the future. And I think it is really important that the Board is continually questioning that.”
 
It’s open to debate how many Boards are actually taking it upon themselves to really question executives in this way. Phillippa Crookes, Senior Relationship Manager at Criticaleye, comments: “The mark of a strong Board and senior leadership team is their willingness to drive change even when the business is hitting its numbers and investors are happy.”


These comments were taken from the following Criticaleye films:  
 
Next week’s Community Update will explore what a Chair wants from a CEO.