Board and CEO Leadership Effectiveness Assessment
Public Company in the High Technology Market
My client, a public High Tech company, was in a major re-definition and growth phase after completing a multi-year turnaround from decreasing sales and changing markets. Their target was to grow from $100 million in revenue to $250 million in the next 3 years. Given the strategic and operational switch from a turnaround bottom-line oriented business to a top-line revenue growth focus, and the current challenging business climate, it was imperative for the Board and the CEO to be fully aware of their leadership reality. Everyone needed to be conscious of the levers to maximize the success of the organization and of any limitations that may preclude efficient and effective execution of the growth strategy.
The Board recognized and agreed that the best approach was to promptly engage in a very open and candid dialogue about the CEO’s leadership and strategic skills, his overall strengths and shortcomings, and the Board’s leadership, composition and effectiveness.
I was engaged to conduct a comprehensive in-depth and targeted CEO – Board 360. In very short order I prepared a tailored and focused inquiry as the basis for in person 1-on-1 interviews with the entire management team (CEO’s direct reports), the CEO, and all Board members, 15 executives in total. I accomplished this task over a period of 27 hours, and provided the Board with a succinct summary, and with my assessment and recommendations. The results where discussed at a special session of the Board.
All of my recommendations were approved and signed off by the CEO and the Board, and immediately led to a number of consequential and important actions. This Client Case outlines the challenges that both the Board and CEO faced and how the Board became unanimously clear about the leadership level playing field.
Times of uncertainty and significant change are special opportunities for organizational renewal. They present a unique and in many cases imperative opportunity to determine if leadership is as effective as possible, and to ensure that all players of the senior leadership of the organization are aligned. This applies to all the members of the Pivotal Leadership Trio™ (PLT) (the Board, the CEO and the Executive Team). It is an opportune time to be reflective, to ensure that we have a clear vision and strategy, and to determine if the right leaders are in the right roles to lead and execute the strategy.
More than ever, the Board and the CEO must be open about their strengths and shortcomings. Boards can’t afford to operate in the dark or make decision without being fully cognizant of the PLT’s leadership potential and limitations.
Like any great team, the Board and the CEO need to know their leadership vulnerabilities, and proactively address any leadership deficit before it has a negative impact on the success of an organization. Likewise, when a Board is fully aware of the leadership capital that resides amongst its directors and management they are in an optimal position to capitalize on synergies and complements. This significantly increases shareholder value by enabling clearer choices and well-founded decisions, done more quickly. Speed is often essential in times of dramatic change.
I was called to assist in one situation with characteristics that I believe are existent in many organizations today.
Background: The State of the Company and its Leadership
- The company had undergone an intense turnaround after a combination of decrease in sales and market uncertainty over the previous 4+ years.
- The CEO led this turnaround in very difficult times, showing resiliency and courage. He proved to be a very effective turnaround executive. The Board supported the CEO well during this transition.
- In spite of the transition success, many Board members recognized that the interactions between the Chair and CEO were not always fluid. Respective roles had not been thoroughly discussed, creating a cloud over the Chair-CEO relationship. This cloud was also felt by senior management.
- The company had undergone multiple layoffs, with many changes in the Executive Team. The new team was showing promise but was not complete and was not yet operating as a team.
- New opportunities for strong growth had been identified and needed prompt attention.
- The Board recognized that timing to move the company into growth mode was critical and all members of the Pivotal Leadership Trio needed to be aligned to increase the chances of success. It was essential that in short order leadership strengths and shortcomings be identified
I was brought in to conduct a CEO Leadership Effectiveness Assessment (360 Extended to the Board). This assignment was distinctive in its nature and scope; a highly critical task needed in very short order. The company was in a “transformation mode,” in need to let go of what no longer served its ultimate purpose technologically, organizationally and culturally. All participants saw this engagement as an opportunity to strengthen the senior leadership and help prepare for the strategic and operational challenges in the years ahead.
When conducting a CEO 360 and a Board 360 we are stepping back from the intense day-to-day action and bring ourselves to the “reality of what is” in order to see the truth about the leadership environment. We gain significant insights on how to restore or improve balance and tap into everyone’s potential for the success of the entity.
The initiative is a rigorous process and is not about regrets and finger-pointing but rather about raising an awareness of the challenges, possibilities, self-imposed limitations and limitations that need to be overcome.
The objectives were:
1. To help the CEO identify how to further leverage his leadership potential as CEO
of a public company;
2. To help the Board further maximize its effectiveness as a strong team;
3. To bridge any CEO/Board issues, clarifying roles and expectations; and
4. To leverage the current positive Board dynamics.
In a period of two weeks I interacted with a total of 15 Executives over 27 hours of one-on-one interviews. The participants included the CEO, all outside Board Directors, and the CEO’s direct reports. To accomplish this most effectively in this short time, I:
- Developed fully customized and highly comprehensive inquiries;
- Conducted in–person meetings with all Executives in an environment of openness, trust and confidentiality that led to deep sharing of invaluable information without exposing or disclosing any sources;
- Delivered findings at a Special Board meeting. All Board Members were on the same page about the past, current and near term leadership potential and challenges of the PLT, and had new insights and accurate facts to make decisions;
- Provided recommendations where urgent action was needed.
I was to be a trusted extension to the PLT:
(a) To create an environment of trust and confidentiality for all exchanges and to
encourage openness with and amongst all individuals;
(b) To share the findings and provide an independent view;
(c) To clear the air where there might be concerns; and
(d) To bring greater clarity about Board interaction, Board and CEO dynamics, and
CEO leadership effectiveness.
The goal and objectives were met and expectations exceeded, particularly given the complexity and the magnitude of some of the important issues that were revealed. The Board was unanimously impressed with the quality and clarity of the insights. The Board asked me to stay involved throughout the discussion of follow-on steps, and asked me to advise them in the coming months, during important changes that needed to occur at the CEO and Chair level.
Several Board members expressed that a good measure of the success of the project was directly tied to the customized and comprehensive inquiries that started the process and my ability to be trusted by the people that I interviewed. This enables them to share in confidence, willingly. In turn, committing to always remain objective, I received a wonderful wealth of information, learned much from each executive, and gained a complete and thorough perspective of the CEO’s leadership, the Board and of the Executive Team. This placed me in a unique position to provide an independent and comprehensive view. This is in keeping with my stated commitment to bring greater clarity and focus that empowers my client’s executives.
The assignment enabled an open dialogue among the Board members and the CEO about critical issues for effective performance:
- Board’s expectations of the CEO as (a) the top executive in the company and (b) a member of the Board;
- CEO’s expectations of himself in both capacities;
- CEO’s commitment to the strategic roadmap and support required to succeed in the short-term;
- CEO’s expectation and needs from (a) the Board and (b) the Chair;
- The Board’s expectations of the Chair, both to guide the Board’s actions and to be a key interface with the CEO; and
- A needed “check-in” regarding every Board Member’s understanding of the critical short and long term strategic objectives and tactical steps.
Response of the Participants
The Board in its current composition had not had a formal and comprehensive process to step back and reflect on its overall effectiveness and define how it could best maximize its potential. Also, there had been no comprehensive 360 for the CEO. Both the Board and the CEO welcomed the process although initially the Chairman was skeptical that results could be achieved in such short order. In the course of sharing the preliminary findings with him, he became impressed with the depth, candor and relevance of my findings and the comprehensive nature of my conclusions.
During the process, the CEO was enthusiastic, trusting and believed in my ability to surface the important issues, including his sense of the challenging dynamics between him and the Board, and him and the Chair.
The Management Team was reserved though highly cooperative in their sharing and assessment of the CEO. While their personal support of the CEO was clear, they were also very savvy and open about challenges and actions that would improve the overall Executive Team effectiveness. This candor from the management team was very welcomed by the Board.
The Chair of the HR and Compensation committee, shared the following:
This was a very difficult situation, having to do with both CEO and Board effectiveness, and the need to face and overcome challenges and limitations quickly. The task was daunting and urgent. Johanne did a great job, and most importantly her insight -and sensitivity – permitted decisions to be made that worked for all concerned. In the process she helped the Board face perhaps one of the most difficult issues of Board governance, present in many companies but usually not addressed in a timely manner because of complexity and inconvenience: is the CEO the right person for the challenges ahead? If recognized in time, as was done here, it can be resolved with the best outcome for the company. It seems to me that this type of in-depth assistant is urgently needed, maybe even more so at these challenging times.
I want to thank you for the seriousness and thoroughness of your effort in this assignment and the clarity of your insights.
The Chairman of the Board shared:
I agree with the HR and Compensation Chair that you made a big difference. Impressive!
The Audit chair shared:
Very thorough and clear. Most in-depth leadership assessment inquiries I have ever been exposed to. Very insightful.
Independent Board Director:
It was a pleasure to meet you and extremely informative to learn about the company’s leadership through your eyes. Very thorough process and accomplished in a remarkable short order. Excellent!
I felt the framework write-ups were excellent and accurate and in general the board scorecards were accurate. The recommendations seemed to go well beyond what I would have expected out of a 360. … a compliment to you in the end.