I was chatting to a buddy last week. Said buddy is onto his second CEO gig. On both occasions he has been leading high growth organisations and our coffee conversation centred on the the role of a board and the value it can deliver. My coffee companion suggested that, since boards work on a collective basis with no one individual able to make a decision, that they are by definition dysfunctional. Thus ensued an interesting conversation about governance generally, and collective wisdom in particular.
On a related note, my Twitter timeline seems to be perennially filled with Tweets and retweets from people who have an unhealthy preoccupation for anything even remotely connected to Elon Musk. At the risk of sounding blasphemous, it seems that in this day and age, when followership of formal religion seems to be waning, that we introduce new Messiahs to follow.
Of course, here in New Zealand the general tendency has been to find these false Messiahs from various sporting codes, in particular rugby. And while I have no disdain for Richie, Dan or Beauden, I’d struggle to compare their feats with walking on water or turning that same water into wine.
On the international stage, however, it seems that many people identify the truly innovative as their Gods of choice. Steve Jobs, by spearheading disruptive innovations in the technology space, was seen by many in a God-like way. Today’s example is Musk who, it must be admitted, does have a penchant for making some pretty big dents in various sectors.
From Tesla singlehandedly creating the Electric Vehicle category to Space X making space travel accessible and (relatively) economically priced, Musk is undeniable a visionary, and one who has an uncanny ability to instinctively know where the world is going.
And so, if you are a Space X or a Tesla, you have the incredible luck of having a visionary at the helm. True he is a visionary with zero self-awareness and a penchant for saying entirely the wrong thing. But he’s a visionary no less. For the rare organisations that enjoy a Musk or a Jobs steering the ship, a board’s role is one of compliance and control with little to do in the way of actual business decision making. While I am certain that the Tesla board spends a lot of time talking about how to keep Musk under control, it’s a safe bet that they don’t have much to offer in terms of the future strategy of the business.
But what for the 99.999% of organisations who don’t have leaders who can intuit the future and through sheer brute force make a dent in the universe? How do these organisations chart a course, build a culture and best execute upon the opportunities open to them.
At the risk of surfacing the very obvious bias I have as a professional board member, this is where governance comes in. It is also where the wisdom of the crowds shows its value.
If you’re an organisation with a genius in control, you don’t need a diverse set of perspectives and a reflective conversation about what the right things to do are. If, on the other hand, you’re an organisation run by an average human being with requisite human frailty, you want a forum to take advantage of the various experiences, skillsets and contexts on offer. This is where a decision-by-consensus approach comes in. Sure it may take longer to make a decision when said decision is based on reaching a point of consensus but, all things being equal, the quality of that decision will be far higher for being borne out of the committee crucible.
It is true that on occasion a board needs to make decisions based on a vote. But most high performing boards see this situation as sub-optimal and far prefer to either decide after a deep conversation harness the various perspectives or to request more time and information prior to making a decision. While a board may be dismissed by some over-confident and totalitarian leaders as a barrier to execution at speed, it is a way of delivering well-considered decisions that generally stand the test of time.
It won’t be music to Elon’s ears, but it’s the truth and one that similarly despotic and dictatorial leaders should consider.
Ben Kepes is a Canterbury-based entrepreneur and professional board member. He’s all about consensus.
