Performance support
Management Services Winter 2012
41
“The realities faced by business and political leaders are stark.”
that successive high profile corporate collapses have led to calls for additional regulations. Yet such measures cannot prevent directors from taking poor decisions, attempting cover ups and not acting in the best interests of a company when they feel they can get away with it.
Unprecedented attention to corporate governance has not prevented a succession of failures and scandals and massive government intervention, bailouts and measures such as ‘quantitative easing’ have been needed to prevent the collapse of financial and economic systems. ‘Old governance’ has not worked and cannot work so long as a proportion of directors continue to make wrong calls, while some boards take stupid decisions and many ‘walking overheads’ in head offices destroy shareholder value.
Making board decisions beneficial
So how could more board decisions be made beneficial? ‘Old governance’ has involved command and control systems and top-down leadership with its emphasis upon directing, leading, motivating and monitoring. Directors and boards have been engaged in formulating strategies and producing annual or multi-year plans.
Much effort has been devoted to restructuring organisations and multiple corporate initiatives to address various challenges. Some boards have sought to change corporate cultures while others engage in talent wars. Business schools have also put a high priority on strategy
formulation and jumped on change, knowledge and talent management bandwagons. Academics and commentators have stressed the importance of looking ahead and there has been criticism of ‘short- termism’.
By conforming and avoiding risks many boards have become an obstacle to change. They feel that by ‘playing it safe’ they are being responsible. Dr Coral Ingley of AUT University outlined research results which emphasise the extent to which conformism reigns in boardrooms. Conformance often comes first.
Some enthusiasts point to surveys that reveal an association between elements of corporate governance such as particular board structures and financial performance. However, establishing cause and effect is more difficult. The association may simply be due to good boards and management teams trying to get most things right, whether a company’s products and pricing or observing codes of practice.
One could argue corporate governance has been a placebo or distraction. Even its supporters and apologists acknowledge that there are missing elements. These will need to address such realities as uncertainty, insecurity and a lack of business confidence in key markets, while many ‘traditional’ approaches have proved inflexible and costly. Priorities can also change during their implementation. Lord Giddens expressed the view that “the world is out of control.” He could not recall a time when the future was so uncertain and every
company was vulnerable to sudden shocks. Looking into the future and preparing longer- term plans can be problematic when one peers into a fog that conceals multiple, evolving and mutating challenges and opportunities.
“A decade of stupidity” Gwyn Jones, CEO of the Global Association of Corporate Sustainability Officers, called for fresh thinking. After what he termed a decade of stupidity Professor Mervyn King also called for new ways of thinking for the period 2010 to 2020 which needed to be a decade of change. Many boards find organisational structures, processes and practices are getting in the way and more affordable, flexible and sustainable approaches are required. We need better ways of helping ‘frontline’ staff to cope and enabling customers to help themselves.
Dr Graham Wilson in his valedictory summary pointed out that the future looks worse than we would like it to be and emphasised the need for practical solutions. People require support when handling an unprecedented degree of change and minimising downside risks, while approaches advocated should be evidence based.
Lt Gen Alhuwalia pointed out that when facing a set of challenges unprecedented in human history, flexibility and adaptability will be required when adjusting to change. So how should corporate boards respond? Will traditional approaches come good, or should they try more promising methods?
Performance support My own search for alternative approaches has involved issue surveys of some 2000 organisations and critical success factor surveys of over
2000 companies and over 500 professional firms. It has included working with over 100 boards, reviews of the processes and practices of over 100 companies, European Community funded support of the owners of 50 businesses, and evaluations of over 20 adoptions of better options. Accumulated evidence is compelling and consistent. It suggests many widely adopted responses to a changing business environment are general, expensive, time consuming and disruptive. More importantly, boards are overlooking quick, focused and cost effective options that ensure compliance and deliver large returns on investment and multiple benefits including higher performance, faster responses, lower support costs, increased understanding, greater engagement and reduced stress and risk. An option such as performance support can deliver these benefits by making it easier for people to excel at difficult and important jobs by emulating the approaches of their more successful peers. It can support mobile activities, relocation and outsourcing. Baroness Verma stressed the importance of learning from others and seeing what we can do better. Dr Coral Ingley asked how governance can stimulate
“By conforming and avoiding risks many boards have become an obstacle to change.”
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48