An illuminating interview about the challenges boards face in this very challenging year. Adam Bryant talks to Dr. Wanda Austin, the former CEO of The Aerospace Corporation. An excerpt:
Bryant: We are having a lot of conversations with directors these days about how to get a fingertip feel for a company’s culture. What’s your approach?
Austin: You start in the boardroom. If your CEO is comfortable with having people give board presentations and letting them answer directors’ questions directly, without the sense that they’re filtering their words in terms of what the CEO wants them to say, that’s an important clue about the culture.
The next thing is to ask what the company does with the results of their employee surveys, and how they’re measuring whether they have made progress. Were there any surprises in the surveys, and if so, why were they surprised? Is succession planning just lip service?
The third thing I look carefully at is people development. What are the turnover and retention numbers, and are there any messages in there? Is there a surprisingly large number of people who are leaving the company after three years, after the company has invested a lot to develop them? If so, you need to understand what’s driving that.
And is succession planning just lip service or is it pushed all the way through the organization?
Bryant: Given how all the uncertainty in the world has challenged the act of planning, what is the role of directors in helping management lead through the fog?
Austin: Board directors are asking far more challenging questions today. In the past, management teams may have said, “We’ve thought about this and here’s where we want to go. This is what we did three years ago and it worked so we’re going to turn the crank and life is going to be great.” Any director hearing that now should have their hair on fire and say, “That could be a possibility, but what if that absolutely does not happen?”
The board has to help the CEO look around corners.
Bryant: How do you evaluate CEO performance in a year like this, when the financial results are going to be dismal for many companies?
Austin: How did they show up through the crisis? How did they lead the organization? How did they engage to figure out how to keep employees safe and continue to operate the business? How are they treating people who had to be let go and communicating with the organization about those decisions? Are they being open and transparent? Do they have a fair process or did they just delegate those decisions?
The CEO sets the tone for everyone else. This year, performance is going to be judged in part on how well they operated through the crisis and how well they pivoted the organization to a stable platform for the next several years. The CEO sets the tone for everyone else as they work to come up with a plan. Communication is key to keeping the organization focused on what needs to get done and how you want it to be done.(7) “Board Directors Are Asking Far More Challenging Questions Today.” | LinkedIn