Governing in Scary Times

The Board's Roadmap for Governing Through and Beyond an Emergency

Dr. Debra L. Brown, David A. H. Brown, Rob DeRooy

• Publisher: Author Academy Elite
• Year: 2021
• ISBN:
  9781647466749
• Edition: 1
• Topic: Business
• Subtopic: Corporate Governance
• Index: Business

If the global pandemic taught us anything, it's that all organizations need a strategy to manage in a crisis. In Governing in Scary Times, authors Dr. Debra L. Brown, David A.H. Brown, and Rob DeRooy offer a step-by-step plan to prepare your board to provide direction for your company and reinforce your stakeholders' confidence.

With a combined 75 years of experience governing companies and boards, the authors guide you through a process that will prepare you to answer key questions:

• Where are we headed?
• What obstacles and opportunities might we face along the way?
• Who will do what?
• What are the boundaries and guidelines?
• How will we resource our efforts?

Governing in Scary Times is your boardroom roadmap to navigating extreme challenges in your business. From developing a strategic plan to assessing risks and policies to getting and keeping the right people in place, the authors provide practical and proven advice that will equip your company to survive scary times-and come out stronger on the other side.

Another crisis is (always) coming.

Use the strategies in Governing in Scary Times, to ensure your organization is prepared.

Chapter 1
Strategic Planning in the New Economy

As leaders, your thoughts have likely been focused primarily on four immediate pressures of late:

• the health and safety of your employees
• ensuring business continuity
• risks to your reputation, and
• stakeholder communications.

You will have moved on beyond the immediacy of these to assessing the impacts and ensuring board and management discussions, and decisions have been properly implemented and documented. You have been doing things on the fly, and you want to make sure that you have crossed your T’s and dotted your I’s. You are keeping an eye on reopening plans and activities, and you are thinking and planning for beyond the emergency. Some of you may even be fully operational or have grown exponentially through the pandemic. The crisis has had many negative effects. But we are glass-half-full kind of people! We make lemonade out of lemons and know we will find good in most circumstances if we just look for it.

In this chapter, we will examine the following themes:

Theme 1: Urgent Pressure to Concurrently Think Concurrently Through Multiple Timelines

Theme 2: A Singular Unique Opportunity to Lead in the Shaping of Culture

Theme 3: Cognitive Biases — Especially Pessimism, Optimism and Discounting Biases

Theme 4: Multiple Industry Shakeups

Theme 5: Compelling Need for Vision Casting to Give People Hope

Theme 6: Demand for Adaptability and Resiliency in the Organization

Theme 7: Excellence in Crisis Communications

Theme 8: Collaboration and Opportunity with Competition

Theme 9: Significant Rapid Innovation

Theme 1: Urgent Pressure to Think Concurrently Through Multiple Timelines

One positive result of the crisis is that it has caused virtually every board to systematically think and reflect on the impacts of the pandemic. This has led them to turn their attention to the longer term and to enhanced governance. Your CEO and board have shifted, rethought strategic priorities and recalibrated and retooled for the new economy, the new marketplace. The crisis has caused leaders to think concurrently about multiple timelines.

If your organization isn’t thinking about all four of the following levels concurrently, you need to.

This is the first question for your toolkit:

How well is our organization currently thinking about all four of these timelines?

• reacting to the crisis (to survive)
• recalibrating in the aftershock (to stabilize)
• rebounding to the new realities (to sustain)
• reimagining the future (to succeed)

It is hard enough in normal times for us to think about one timeline, the timeline that we’re in. Now we are having to think in four streams all at the same time.

Theme 2: A Singular Unique Opportunity to Lead in the Shaping of Culture

The second theme that we are seeing is that this is a singular unique opportunity to shape culture. Culture is formed, embedded, shaped and changed through shared experience. Full stop. Shared experience is how you change culture. If you are not leading your culture, your culture is leading you. There is no better time to lead in shaping your culture than now. This is why: everybody in your organization is sharing the experience of maneuvering through this pandemic, not just you and your employees. Your entire board, leadership team, customers and suppliers are part of this shared experience. Everyone who is attached to your organization is going through the same shared experience — simultaneously.

We are living in the days where the best approach is, like Nike says, “Just do it.” Leaders are jump-starting to “yes!” Governments have been able to make quick decisions and implement complex solutions to deliver major programs in record time. Big moves that have been stalled or in the works for years are suddenly becoming quick “yeses.” Moves like shutting down a large office or closing branches happen at the stroke of a pen. For example, our local branch bank has temporarily closed. We doubt it will ever reopen.

Bureaucracy, low risk tolerance, lack of innovation or other cultural issues have prevented companies from moving quickly with the speed and agility needed to transform. Suddenly, their response has become, “Just do it.” In some cases, it has been, “Let’s just try anything!” Pre-COVID inefficiencies have created post-COVID survival movements. Here’s the thing: you can only change culture as quickly as your culture will allow.

The shared experience of this crisis has provided a unique opportunity for real culture change. Everyone at the same time is recognizing the need for such change. A controversial example is with schoolteachers. Where we live, just prior to the pandemic, teachers were fighting online learning for all they were worth. They wanted no part of it. The pandemic forced them into it. Now, many are embracing it. Many are finding value in it. And, dare we day, some are enjoying it!

Not every organization is looking for culture change. You may have a very healthy culture. However, if you are looking for culture change, there is no better time than now. Culture change typically needs two ingredients: shared experience and a burning platform. So often when we try to change our culture, we must fabricate a perceived burning platform to convince people of the need for change. Too, we find ourselves dragging people along, at times kicking and screaming. With the pandemic, we have an immediate burning platform. Most people are ready to jump together. We are faced with one big, collective, shared experience and burning platform. If there was ever a time to lead through the reshaping of your culture, that time is now.

Why are we talking about culture in a chapter devoted to strategy? You have likely heard this expression, often attributed to management thinker, Peter Drucker: “Culture eats strategy for breakfast.” In other words, unless and until your culture is aligned and healthy, you are not going to be able to effectively and efficiently achieve strategy.

Two more questions in your toolkit are as follows:

How aligned, healthy and effective is our organizational culture going forward?

How might we use this opportunity to lead in culture formation?

Seventy-five percent of people in our poll said that they expect their organization to be different to some extent after we are through this crisis. Eighteen percent expect their organization to be significantly different. That means 93% of those organizations can expect their culture to change. The question becomes, “What will it change to?”

Leaders must guide, enable and facilitate those changes to line up with values and strategy. The CEO is the head of culture. They are the one who stamps, champions, leads and changes the culture. It is the responsibility of the board to oversee organizational culture by ensuring the CEO is moving the organization in the right direction.

When going through a crisis, organizations operate in “war time” governance. In “war time” governance, everybody unites against the common enemy. People are more willing to let leaders lead when they are at war. Your opportunity to change culture is now, not after the war is over. You need to act quickly. There is a burning platform. The board and CEO need to persevere and use this opportunity to craft culture, or it will just slip back when the crisis is behind us. It will quickly revert.

Theme 3: Cognitive Biases — Especially Pessimism, Optimism and Discounting Biases

Part of the reason for reverting back to previous habits, and related to this discussion about culture, is cognitive and unconscious biases. There is significant research on literally dozens of cognitive biases. They are not all bad! We develop unconscious biases to solve our problems. The need for problem solving is why cultures develop in the first place. Cognitive biases, like a lot of aspects of culture, are unconscious. Our job is to shine light on them to understand them. When we understand them, we can figure out which ones are at play and ask ourselves, “Do we need to challenge this bias?” Some biases are unhealthy and contribute to an unhealthy culture in the boardroom as well as the organization.

There are three cognitive biases that have been heightened during this crisis. One is a pessimism bias. This is when a board member is likely to exaggerate the negative effects of long-term outcomes. These board members will be reluctant to make any changes and will lean towards reverting to the old culture, believing it will be safer, more predictable. They may think, “Let’s just see if we can ride this thing out.”

The opposite bias is an optimism bias. Those with an optimism bias are more likely to argue that the current problems will pass and the future will hold more promise. Therefore, we should adapt and change our culture to lean into that promise of the future. In the context of this emergency, those with an optimism bias are more likely to be the ones protesting in the street to open the restaurants, open th...

Table of contents

• Title Page
• Copyright
• More Governance Resources to Help You Govern in Scary Times
• Dedication
• Contents
• Introduction
• Chapter 1 Strategic Planning in the New Economy
• Chapter 2 Unwinding from the Crisis — The Risks and Opportunity
• Chapter 3 Attracting and Retaining the Best Employees in the New Economy
• Chapter 4 Catching Up with the New Reality — Reshaping Policies and Protocols
• Chapter 5 Refreshing the Financials and Projecting What Comes Next
• Chapter 6 Taking Stock — Monitoring the Financial Impacts
• Chapter 7 Compliance — How Well Did We Do and What Would We Do Differently in the Future?
• Chapter 8 Evaluating How We Did — Board and CEO Evaluations Post-Crisis
• Chapter 9 The New Corporate Performance Scorecard — Setting a New Standard
• Chapter 10 Reinforcing Confidence with Your Stakeholders — Keep the Conversation Going
• Afterword
• About the Authors
• About Governance Solutions
• Other Books by the Authors