Key Point: Board of Directors (the recent financial meltdown in the U.S. notwithstanding) are usually wise, smart and accomplished. If you get a chance to listen to the questions they ask, you will learn a lot. These individual probes come from a place of experience. The reason board members ask them is because they have learned something important, often resulting in memorable scar tissue they still carry with them. Read on and I will share two areas or principles where smart board members really zero in.
I recently attended a major company’s board meeting. I loved listening and watching where and how that board managed a constructive inquisition. True to form, this very capable group put a spotlight on the following:
Principle No. 1: Where there is complexity, one usually finds cost and opportunity!
When management proposes something that is complex and difficult to understand, the antennae of knowledgeable board members’ usually buzz. They know that if they can’t “get it,” a lot of others won’t either. The unintended consequence of complex systems or processes is often extraordinary administration and that usually costs a lot in people, technology and capital. On the other hand, board members get excited when management is capable of taking the waste out of complexity. This usually means more margin if that activity has commercial value. The worldwide champion on reducing complexity into simple, almost beautiful elegance is of course Apple.
Principle No. 2: Cause and effect are not closely related in space and time.
This principle is well known by experienced board members. They understand that providing data does not equal problem resolution. Finding the real cause and true drivers of end results is one of the most challenging aspects of strong leadership. This is especially true with complex systems. When real catastrophes happen it is usually based on multiple, interconnected root causes. That’s why intensive investigation is necessary and finding the cause is hard work. The same is true when something is exceptionally better in value than what others are providing. The outcome of extraordinary value is often based on a connected system; all elements working optimally. That’s why sports teams can’t be excellent from just copying a playbook from another great team. There is more to being exceptionally better than just what’s in the playbook. It’s the end-to-end system that wins.
- Look for complexity in your work and personal life. Simplifying it will result in cost saving and/or a way to make more money (get better results). Just pick one thing and pilot it. When you hear somebody propose something that is too complex, don’t just assume you’re the only one that doesn’t get it. Trust your gut and really question where the simplicity might be. My guess is if you don’t “get it,” others don’t either.
- Learn how to get to root cause by using effective problem solving methodology. The Japanese scientists and engineers, who really developed the break-through total quality and lean systems, reinforced the five “whys?” They believe that if you ask the question “why?” after each response to a problem, you’re getting closer to the real root cause.