“Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution; it represents the wise choice of many alternatives – choice, not chance, determines your destiny.”
We recently hosted a well attended panel event for the Canterbury Institute of Directors which included a mix of experienced directors with diverse & extensive governance experience.
Directors are mandated to work in the best interests of a company and to ensure (among other things) the entity is purposeful, successful, compliant, safe and future focussed. Inherent with this is the challenge of successfully navigating growth pains and the uncertainty of executing new or innovative strategic initiatives. As a company evolves and grows it will need access to different advice at various times in order to mitigate risk or to manage/navigate complexity.
The 10 key insights outlined by the panel included;
Whilst there is real value in long term advisers who deeply know the business, a company can outgrow existing advisers for a variety of reasons. A key indication can be where they no longer really challenge ideas nor present alternate solutions/insights.
Many new advisers will be introduced via the network of independent directors and certainly referral is the most common approach. That said a board should not discount going to the market and seeking advice from outside an immediate network.
Advisers can support board sub-committee initiatives/projects and join a board for select agenda items. This adds real value and expertise whilst also changing the conversation.
It takes courage for a company founder to form a board and to then seek advice on a regular basis. Those that do tend to get business break throughs and lift the growth trajectory of the business.
Specialist advisers can address sensitive topics in an un-emotive way backed up by data and examples which allows the topic to be explored in different ways. Clever/experienced leaders often need to be gently reminded of the options to ensure the best decision for the organisation is made.
It is important to note that Advisers cannot resolve all the issues a business faces. Sometimes there is real value in the organisation working through challenging topics and reaching the solution internally.
There are times a long term adviser might be conflicted ie where they advise shareholders/family trusts. As a company grows a board can feel the need to seek independent/unencumbered advice for the directors.
As advisers are engaged they should fit the business culture, understand the business and earn the trust of the board. There are times it is more appropriate for advisers to be engaged/retained by the board vs by the CEO/management team.
Candid discussions are often required to add real value whereby an adviser challenges ideas and is prepared to push back on status quo thinking to ensure new ideas are explored fully. Those who can “straight talk” often make a real impact.
Every board and company situation is quite different and a mix of technical expertise, judgement and EQ skills are essential for a skilled adviser.
Without a doubt there is real value in accessing the right advice at the right time to actively contribute to key break throughs or important decisions. Some advice can be quite transactional, project based or specialist whilst other advisers may need to work alongside the company longer term complementing the board of directors.
Regardless of the type of advice or length of engagement this is an effective way to inform key decisions or to maintain momentum or speed of execution.
2021 has been a very fulfilling year personally and professionally. It has roared by, filled with challenging work, fun times and great people. Not many days go by without reflecting on the fact that I love what I do and the people I get to work with.
Covid again dominated the year as businesses navigated shut downs, global supply chain melt downs, closed borders, vaccination roll outs and significant geopolitical change. Overall the global and NZ economy has performed well but 2022 looks to be equally full of change and uncertainty.
2021 Personal milestones;
Much more work from home including a 3-week total lock down. Nice to be able to mix work & home life.
Our children turned 20, 4 and 3. My eldest daughter studied at AUT in Auckland until August and then finished the academic year online from Christchurch.
We continued to develop our home, section and garden which has been a fun project.
A Labrador pup joined the family in May adding (chaos) to a busy family.
My father had several operations relating to cancer and has regained his health as he turned 78. He continues to live with us.
Over the last 12 months (according to my Apple watch) I averaged 9318 steps per day, exercised on average 31 minutes per day, completed 315 workouts and slept on average 7 hours and 26 minutes per night. Pretty happy with that!
I was awarded my “Infantry Bayonet” for 25 years service in the Royal New Zealand Infantry Regiment. I was really humbled to receive this and it came out of the blue after an invite to a 2/4 Battalion formal dinner. This award from the Royal New Zealand Infantry Regiment means a lot to me and my 28 years of military service is something I really am proud of.
I took 4 weeks off at Christmas and 3 one week breaks during the year. We had a camper van holiday at Easter, took time at the family farm and holidayed in Twizel. It was a chance to explore with the kids, do some hunting, rest, read and catch up with family
2021 Business & Consulting Milestones
My 17th year of self employment.
Our company (Pivot and Pace) grew by 25% in both top and bottomline revenues and 7 new people joined our team in both consulting and support roles. Our team now sits at 12 and growing.
We appointed a General Manager to run the business day to day and a second independent director to our board. This is part of our succession planning as we look to scale our business.
Our Executive Leadership Coaching services grew by 30% and I personally delivered 307 one on one sessions working with 45 executive leaders. (Across NZ, Australia, the UK, the USA and India). This is now our biggest growth area in the business with the demand for sustainability strategy being a close second.
I personally facilitated 38 strategic planning sessions, 19 customised leadership team workshops, worked with 22 senior leadership teams, attended 55 board meetings (chairing 30 of them), completed 13 webinar training sessions as a student, delivered 5 key note speeches & took 40 domestic flights.
We moved offices in May and fitted them out.
I attended the NZ High Tech Business Awards in my role as Chair of Link Engine Management Ltd as finalists in the “Company of the Year” category. Whilst we did not win the top award, we were proud to be alongside some of the countries most admired brands.
We hosted a Black Tie Leadership dinner for 25 business leaders at the Christchurch Club with Shaun Maloney sharing his journey as CEO of Seequent after being successfully sold to Bentley for $1.05Bn USD.
I took on an independent directorship with Groundline Engineering as Board Chair. Groundline are a specialist, privately held NZ power engineering company delivering services across New Zealand, Australia and the United Kingdom.
After facilitating the new Vision & Strategy for the Board of Angus NZ, I accepted a role as their first independent director. Angus NZ is the largest NZ breed association and I really enjoy working with farmers and agri-business leaders. My grandfather was a Angus NZ breeder in the 1960’s and my Uncle was a former Chair and life member. Growing up around black cattle on our family farm I have enjoyed reconnecting with the industry.
We completed our first year as a sponsor of the Canterbury Institute of Directors and have recommitted for 2022 & 2023.
Our relationship with NZTE continued to grow as we engaged with NZ export companies seeking Strategy and Strategy Execution services.
John Spence remains a key strategic partner in our business and our regular zoom meetings keep us connected with US based businesses and trends.
Our network of formal strategic & collaborative partnerships has continued to grow to 9 (including our long standing partnership with John Spence LLC in the USA).
I have learnt a lot and there are some interesting patterns we are seeing across business and the leaders we work with. I think the next 5 years and beyond will continue to be the most challenging ever for businesses looking to grow and scale. With that in mind it is important to reflect on the lessons learnt.
What valuable leadership lessons did I learn in 2021?
Talented employees are leaving their mediocre bosses/leaders. Referred to as “the great resign” this pattern is being put down to people reassessing life priorities and leaving good jobs despite not having secured their next role. Personally I think much of this relates to the mediocre leaders that they work for. Leaders who don’t inspire, can’t connect, won’t adapt and look at new ways of leading just won’t be tolerated in a tight labour market where there are many options. Research shows over 50% of the NZ workforce is looking to move jobs in the next 12 month!
Burn out is high. The pace of change is relentless. Everyone is tired and working hard and constant change/uncertainty adds to the stress. Managing tempo and ensuring everyone takes time off is critical to manage this. No organisation can be a maximum capacity all the time. Resilience levels across the board are low which won’t bode well if 2023 throws a big curveball or three!
Many business models are failing to deliver what is currently needed. Out of date constitutions and business models that were designed for the 20th century are being challenged at present. Some create barriers to growth, succession and acquisition. Some of these things should have been addressed years ago. This will continue to be a big challenge and in some cases will be a catalyst for failure. Certainly we see national and local government struggling to keep pace with things, infrastructure is groaning, climate change is hitting home and the stage is set for some real disruption in the near future.
Most Leaders don’t/can’t or won’t change their style. Those leaders who cannot flex or adapt their style of leadership are finding it really hard to lead succession, younger generations, change and to execute strategically. New skills and ways of engaging people are needed. 19% of the workforce in NZ and Australia is actively engaged. This is the outcome of poor leadership. On top of that our productivity is low despite working long hours.
Many Boards suck at Strategic Thinking in Governance. This year, more than ever before, we have been involved in restructuring Board of Directors. Some companies have removed all their independent directors and recruited a totally new board. Board Chairs have been found wanting and there is a real shortage of skilled directors to take on Chair roles. With the pace of change boards need to work harder and be more adaptable to keep up with the pace of change that management teams are operating in. To think strategically and to stay ahead of the future challenges of the company requires more director development, more external advisers to the board and more strategic input.
Trust the process. In times of constant change and uncertainty it is hugely valuable to have a framework and process within which to operate. Regular reviews, lessons learnt, professional development, intentional culture, speed of execution, data informed decision making and clarity on priorities mean there is a need for robust processes. Certainly I have found our strategic framework has never failed to deliver the outcomes needed. That said there have been times that we have just needed to trust the process and push forward.
Opportunities abound. Never has there been more opportunity, nor a more exciting time to be leading in business. With any change there is opportunity and in constant change this is magnified if leaders can keep a clear head, create the space to explore the market and can execute. Exciting times indeed!
As you reflect on the year what were your milestones? What did you learn as a leader?
I recently spoke in Christchurch at an Institute of Directors event on the impact Advisory Boards can have for businesses who choose to implement them. There was then a panel discussion that further explored the topic.
I currently have four independent directorships (currently chairing two boards). In my consulting role I work as a strategist, high performance leadership coach and adviser to a number of Boards of Directors. At any one time a number of our client companies are restructuring Advisory Boards or establishing them for the first time.
In my opinion establishing an Advisory Board is a great way to add some real value to a business. It is a safe way to test the waters as to whether a formal board structure is the right course of action and a safe way for long term business owners to get their heads around this option. Interestingly founders having had an advisory board and then going on to establish a full board often reflect that they wish they had established the formal board from the get go. That said there is usually a healthy desire for an Advisory Board as a logical stepping stone.
The purpose of an advisory board is to allow the directors of the business to access regular strategic advice from a group of trusted advisers familiar with the business who can contribute to the future success of the business. It’s also a robust platform for working on the business rather than in it.
The IOD 4 pillars book (starting page 80) has a chapter on Advisory Boards and I point this out it as a very good reference. I particularly like very first headline bullet point – “Advisory Boards provide advice but do not make decisions and have no authority to govern.”
Legally an Advisory Board offers advice which the directors of the Company can choose to adopt or not. The advisers are effectively operating in a consulting capacity and the minutes must be careful to note that these conversations are such. This prevents those advisers from being deemed as acting in the capacity of a director.
In my experience the key advantages of establishing an effective Advisory Board are;
They allow the shareholder, director and management discussions to be separated often for the first time. This adds structure and clarity. Shareholder expectations can be discussed in a separate meeting allowing the directors to focus fully on governing the business.This then starts the process of allowing the MD or GM to drive the business day to day.
Different Advisers can be engaged come for certain pieces of advice or thinking which changes the discussion and allows deeper/broader consideration of advice.
The Advisory Board is a stepping stone for succession that allows founders to get out of their business day to day. They can begin to see and understand how they can govern their business without being in it day to day. If run effectively it allows a discussion that rises above the day to day operations of the business……to give that valuable helicopter view of the business.
A strategic agenda can be discussed and a focus put on the execution that creates momentum.
The way decisions have traditionally been made is challenged and creates different outcomes.
Trust is built as to how to listen to advice and take advice. Many businesses seek advice but don’t adopt that advice. In my view when a business starts to value the advice and implement it the business starts to grow up. There are break throughs as the important things start to get addressed.
If the business is coming under management it allows a platform that supports the CEO/GM to be given the autonomy to lead. It helps the founder get out of the way whilst providing the confidence that there is still accountability and transparency. It can allow founders to have a management role that may not be making the key decisions day to day.
There are a number of ways to approach the implementation of an advisory board and certainly every situation is subtly different. Getting this right can really allow a business to get key break throughs and to realise their potential.
Governance is an important component of any business. All companies have directors but not all place an emphasis on its importance nor the value it can add. It is a key part of succession (allowing owners the transition or sell), accessing external funding, maximising value to shareholders and reduces business risk as the organisation navigates change or challenge. On top of that it supports talented CEO’s to thrive and reach their potential.