CHAPTER 5

It’s Board, Not Bored

Not everything that counts can be counted, and not everything that can be counted counts.

—Albert Einstein

It was the wonderful American blues singer Albert King who first recorded the classic, “Born Under a Bad Sign” in 1967. The best line of the song is, “If it wasn’t for bad luck, I wouldn’t have no luck at all.” Starting in 2018, Boeing, the great aerospace company, had a string of what might be called “no luck at all.” The Boeing 737 MAX entered service in 2017, and in October 2018, a 737 MAX carrying 189 passengers crashed after take-off. Five months later, another 737 MAX crashed after taking off with 157 passengers.

It wasn’t luck at all, bad or otherwise, however. With two plane crashes in five months and 346 passengers dead, Boeing scrambled to find answers. The reports from both crashes faulted plane design as one of the factors.¹ In the 737 MAX, apparently, there had been some flight control changes, which many 737 pilots said they had not learned about until after the second crash in March 2019.² Some said Boeing omitted the changes in some of the flight manuals and should have required special training for the pilots. While Boeing initially said that there was no additional training needed for the 737 MAX, the company reversed its position over time.³

During this tumultuous period for the Fortune 500 company, there is no record in the minutes of the Boeing Board of Directors that the problem was discussed or that any board member of this prestigious company asked any questions of the CEO. At least in the official board meeting minutes, there was never a recorded discussion of the issues with the 737 MAX.⁴ As a result of the two crashes, some pundits argued that many pilots were losing some of their basic flying skills with all the automation.⁵ Wouldn’t you think that as a board member of an airline manufacturer with two crashes in five months, you would ask the CEO about that? Wouldn’t you talk to your two biggest customers, Southwest and American, and ask them for feedback from the pilots on the plane? Are they nervous about flying it?

Certainly, someone on the Board must have challenged the CEO, right? Apparently not.

This kind of passive behavior is not that of a functioning board. It is B-O-R-E-D behavior. In the middle of one of the company’s most challenging moments in history, nobody, ostensibly, asked the CEO about the real story.

Why aren’t the Board of directors, whether public or private companies, more engaged?

One reason may be that the popular and academic literature on leadership and transformation tends to ignore the Board. Perhaps that’s because the Board’s perception is not strategic; it’s more of a rubber stamp. The presentations by executives get sanitized before they reach the Board, and its members don’t challenge the executives. As a result, boards are not a force for change. No company needs a board filled with folks there only for the money and the esprit de corps at the dinner before the day of meetings. Board members should feel moved by the larger purpose of the organization. Joe Astrachan, who has served on 20 boards and is an Emeritus Professor of Management at Kennesaw State University and Family Business Fellow at Cornell University, puts it simply:

“You’ll agree with me when I submit that there are good managers and bad managers,” he said.

“Of course,” I replied.

A weak board stays complacent, never challenging the information that they’re spoon-fed. On the other hand, a strong board includes members with the experience, knowledge, intelligence, and personality to get to the truth of what’s going on behind what the CEO is telling them.⁶ [See Table 5.1 Bored vs. Board for a list of distinctions between the two board personality types.] While boards don’t set the organizational velocity (OV) strategy, members should provide the framework for it, actively seeking truth and holding the CEO accountable to the mindset that drives new growth. The Board can’t be bored. They must be engaged.

Boards Can Handle the Truth

In most companies, the idea that the Board of directors makes important decisions during its meetings is a myth. Most decisions are made well in advance, the meeting a formality. Board presentations tend to be watered-down versions of the truth meant to pacify rather than engage. Yet, the Board’s purpose is not merely to rubberstamp the carefully crafted report but to think aggressively about the future. Was COVID-19 on the full agenda of the January 2020 board meeting of any publicly traded companies? What about disruptive technology?

Table 5.1 Bored vs. Board

Bored	Board
Manage risks	Ensures necessary risks are taken
Rely on previous experience	Continual learning/engaging
Compensation structure “consistent with industry”	Compensation structure encourages correct firm-specific behaviors
Extensive interaction with other Board members	Extensive interaction with top management team, customers, and industry experts
Highly cleansed presentations	Thought provoking presentations
Back-to-back presentations at meetings	Performance and committee reporting done in pre-reads. Issues and opportunities requiring debate and discussion dominate agenda
No participation in strategy creation	Guide culture and frame (not set) strategy
Relies on research provided from management	Does their own research
Pre-meeting board dinners, heavy on wine, light on substance.	Board dinners include management team paired with board members; pre-meeting breakfast to review notes from dinner and action plan for meeting
Management dictates agenda	Board dictates agenda
“Back ‘em or sack ‘em”	Challenge, encourage, coach
Shareholder focus	Stake holder focus
Nose in, hands out	Heart, gut and nose in, hands out
Seek prestige and compensation—need to be there	Seek fulfillment—want to be there
Providing good answers	Asking good questions
Homogeneous backgrounds	Heterogeneous backgrounds
Tech aware	Tech-savvy
Focus on whether the company is doing things right	Focus on whether the company is doing right things
Encourage innovation	Demand innovatio—set the tone with the CEO by providing permission to innovate (reflected in risk tolerance, KPI’s and compensation)

If not, that is a red flag. Or maybe, the white flag of surrender.

The sanitation of presentations to the top management team or the Board is a cliché. Often the issue is a misalignment of objectives. The presentation creators see the chance to communicate the opportunity or threat that they see in the market and propose a course of action to the group that holds the purse strings. At the same time, the management layer(s) between the creators of the presentations and the decision makers want to make progress as well. However, they also despise ruffling feathers. Their fear of upsetting the apple cart, or looking stupid, wins out. The goal is to get out of the meeting unscathed. The last thing anyone wants to be asked is a question that they can’t answer; hence, presentations are carefully crafted to avoid any danger zones. Too often, managers are ruled by fear: “What will the Board think of me? What will happen to my career if they decide to ‘kill the messenger?’” When leaders don’t speak up, insights perish, and opportunities are lost.

“I’d just completed redoing a deck for an executive meeting that was simply painful,” a senior vice president recently said to me, “because with every iteration, we had to dumb down the message to the point where the final message at the meeting ended up being, ‘We’re good. We don’t need to do anything.’” Of course, the truth was quite the opposite.

The following hypothetical situation illustrates how the sanitation process happens over months, sometimes years. The only part of this example not based in reality is the number of revisions. Since these presentations address more than one topic, there are typically many more than four revisions.

Original

These three market factors have coalesced over the last 18 months, negatively impacting margins in the Widget Division but creating an opportunity for Acme Corp to create a substantial new revenue stream. We’re proposing three pilots addressing this opportunity with different value propositions. We need $50k for each pilot and a team of 12 people for nine months.

First Revision

These three market factors have coalesced over the last 18 months, creating an opportunity for Acme Corp to create a substantial new revenue stream. We propose a pilot project addressing this opportunity. We need $50k and a team of four people for six months.

Second Revision

These three market factors have coalesced over the last 18 months, creating an opportunity for Acme Corp to create a substantial new revenue stream. We are conducting additional customer research to validate the opportunity. If the research confirms the opportunity, we will come back to you next quarter with a proposal to pilot a solution.

Third Revision

These three market factors have coalesced over the last 18 months. The market changes create a potential new revenue opportunity for Acme Corp. We’re working with McBain to do a “deep dive” on this opportunity.

Fourth Revision

We’ve been following changes in these three market factors that may impact the Widget Division. As we learn more, we will keep the Board updated.

So how does change happen at established companies if all the aspiring top managers are walking on eggshells? They gradually establish a consensus while sand slips through the hourglass. If their sanitized proposal gets some positive comments, the manager will start there—and only then see if they can build consensus one decision maker at a time. Here’s the rub—like any material, ideas that are too polished cannot be grasped and simply slip through one’s fingers.

In a conversation with a board member of a multi-billion-dollar global company, he said, “My experience with corporate boards is if the board chair and the CEO have a symbiotic kind of positive relationship, the business really moves forward. If the board chair is a placeholder, then we’re going through the motions to check the boxes at the board meetings and the CEO is on a different path doing his or her thing.”

Trust is a vital topic as it relates to the CEO-Chair relationship. The key is to create the opportunity for debate; if there’s not an ability to have that debate, the Board is B-O-R-E-D. While at UPS, I recall leaving a meeting with a colleague who told me something they were thinking about during the session but never said out loud. The idea vaporized into the ether, never to return. When board members are silent, the opportunity to move the organization forward stalls. However, when board members are encouraged to speak from intuition and experience, they create new angles of thinking for the organization. It’s far more productive than simply reading a highly polished 500-page report.

The goal is more time for engaging the ideas from the report—and less time being presented to. But, again, that requires mutual trust, an environment where honest assessment is welcomed. The question, “Where do we want to be?” followed by a robust and open discussion is expected of companies built to last forever. In times of rapid change, the top management team must continually engage the Board to move rapidly. Just because a company views itself as a Forever Company doesn’t mean it has forever to stay relevant.

You Don’t Have Forever

Blockbuster wrongly thought that it had forever.

In 1993, six years after Wayne Huizenga invested in Blockbuster and became its second CEO, the company bought up local and regional video store chains, growing the chain significantly to 3,600 stores. When the low-hanging fruit was gone, Huizenga sold to Viacom for $8.4Bin 1994. Viacom then brought in senior executives from Walmart and 7-Eleven to help them make sense of customer data. On the surface, they did all the right things, leveraging technology to get insights from what would soon be referred to as “Big Data.” The team drove improvements to both the top and bottom lines.

Blockbuster became the master of retail during this Gold era, cramming store shelves with candy, toys, and other quick-pick merchandise. John Antioco, CEO from 1997 to 2007, was a retail genius and that permeated every corner of the organization, which viewed itself as quintessentially retail—not a movie provider.

By 2004 they had 9,000 stores worldwide, revenues of $5.9 billion, and a market cap of $5.0 billion. Then the bottom dropped out as premium TV channels and Netflix offered from-the-sofa access to movies. As I mentioned in chapter 2, Blockbuster’s retail bias—or its “marketing myopia”—was no different than Kodak seeing itself as a film company rather than a capturing-memories company and Borden seeing itself as a dairy company rather than a milk products company. (We see signs of this today as well. Wells Fargo seeing itself as a bank, leaves the company vulnerable to fintech leaders like Coinbase, Robinhood, and Lemonade.)

At some point, one would think the Board would see the competition and challenge the business model. Blockbuster had a 12-year head start on Netflix and even passed up a chance to buy Netflix for $50 million in 2001 (Netflix was valued at $270 billion in December 2021). But the management team didn’t see the threat, or possibly they didn’t know what they needed to do. They might have thought they would be around forever without tweaking their strategy. Boldly stepping out of consensus, CEO John Antioco launched an online-based DVD-by-mail business in 2006. In 2012, Blockbuster prepared to launch a streaming service (when Netflix’s market cap was a mere $6 billion).

However, according to a former Blockbuster CMO, the Board was so retail-focused that its members viewed embracing online as a threat to Blockbuster’s future; they thought it would cannibalize foot traffic. It was the ultimate irony. The Board at this moment couldn’t check the management team’s bias because they had the same bias! On top of that, the addition of activist board directors led by Carl Icahn created a short-term bias that made longer-term changes untenable.

The demise of Blockbuster yielded many lessons, but one lesson rarely discussed is the need for diversity on the Board. A lack of diversity renders a board ineffective. You might as well have cardboard cutouts of the board members. The same rich experience that makes board members so valuable is the same experience that can create a bias that hinders OV. That is if all have similar experiences. Consequently, the essential component of change—a challenge of the status quo—doesn’t occur.

If board members think they have forever but don’t embrace a “Forever Company” philosophy, then management efforts to adapt to market changes are dead on arrival. The future is created every day, and existing positions must be continually updated and revised. Board members must challenge the management team to fight the tendency to focus on what you sell versus the value you provide.

Board members must speak up; they have to challenge. Not because they don’t trust the CEO, but because they do.

Embracing Risk

For an organization to embrace the OV mindset and framework, so must its Board. OV is not a project. It’s not something to champion for a certain period of time. It’s a way of life. It’s a way of living differently in the years of the Fourth Industrial Revolution. And increasingly, it’s not an optional life choice.

One director recently lamented to me about his board meetings being so quick and efficient that “you can almost do it as a recording; you don’t even need to be there.” This director proposed dividing up board members and executive team members into smaller groups and giving them three questions to discuss so they could get underneath the surface information they heard. Unfortunately, the idea was shut down with a terse, “That’s not the way we do it.”

A board with experienced members and an archaic process can create a default cultural mindset that assumes the company can apply what worked in the past to fundamentally new threats or opportunities. One director told me about an annual board meeting that spends 40 percent of the agenda reviewing all of the risks in the business—from financial risk to safety risk to insurance risk. The one risk rarely on the agenda is the risk of disruption. Board meeting agendas tend to focus on what has happened or what is happening, not what may happen.

One of the better ways to ensure a board is facing disruption risk head-on is to devote one board member to disruption risk. This helps ensure that the Board is creating the agenda and challenging management, not the other way around. The Board can’t expect the leadership to accept some reasoned risk to move with OV if they are unwilling to do the same.

Be aware that lawyers can be a significant roadblock. Legal counsel on the Board or at meetings will want to shut down the discussion of disruption. Paradoxically, it’s legally worse to discuss disruption and do nothing about it than never to discuss it in the first place. If the Board doesn’t discuss it, there may be less legal liability.

Give Permission

As I have stated, OV first requires a change in mindset followed by a change in operations. The Board encourages a mindset change when it gives the CEO permission to do things differently. Then, the CEO turns around and gives senior managers the same permission to do the following:

Permission does not have to be specific. Perhaps the most helpful and important permission a board can give is simply releasing the CEO and the senior team to do what they need to do. It’s encapsulated in one word, “Go.” Obviously, this is not an allowance to go rogue, but the explicit permission to make decisions and take risks. It establishes a foundational layer of trust between a board and the management. During the pandemic, this kind of permission was even more critical, especially when everyone ran scared.

Ben Baldanza, the former CEO of Spirit Airlines, gave me this example:

This wasn’t a rash decision. Ben and his team had the data to back the decision and a process for implementing the change. “And what we learned after the fact,” said Ben, “was the private equity firm that owned the company at the time actually had bets within their group as to how many months we would do it before we pulled it back.” Ten years afterward, the policy is still intact. And Spirit’s airplanes are still full.

OV requires the rapid pressure testing of ideas outside the corporate bubble. The Board should be part of that external pressure testing, and the permission they give expedites it. Board members are selected for their outside viewpoint—from different industries, with various skill sets. It’s this outside perspective that should be used to help question current reality. The essence of OV is its iterative process—ergo, observe, accept, and act. The Board should help with “observe,” but they have even a larger role with “accepting,” because of the permission that they can provide the CEO creating the boundaries for decision making.

At the same time, board members must be able to conduct their own research, independent of what the management says is going to happen. Board members need to “logic check” assumptions and provide a framework for the CEO and her team. Whatever the risk or opportunity, there are always indicators boards can look at to ascertain if management’s vision is rational. For example, economic trends, geo-political developments, new technology introductions.

It’s the job of the Board to critically challenge the CEO and his or her leadership team. Not in an obnoxious way, of course. But the Board cannot simply presume that what the CEO and the sanitized presentation says is fully true. CEOs need the background, judgment, and expertise of the Board.

You Need a “4-Star General”

As I wrote in the chapter on leadership, OV requires a leader with the right mindset, someone willing to take informed risks. The Board is directly responsible for that hiring decision. Some of the most innovative companies over long periods of time are founder-led. That is, the entrepreneur who started the company and stayed at the helm for decades.

Mark Kvamme was on LinkedIn’s Board when the company was faltering and brought in Jeff Weiner to run the company. “We had a lot of issues,” said Mark, “and we brought in Jeff Weiner, who was not a founder but knew how to partner with Reid Hoffman and made LinkedIn what it is today.”

The LinkedIn board took a risk on Weiner, who had never been a CEO before. In fact, Weiner had not even been the general manager of a large enterprise. Mark continues:

It’s the Board’s job to hire the four-star general, not the administratively minded operations leader who manages the Board so that the organization runs efficiently. The role of the Board is to allow the CEO to make mistakes. “If you don’t allow the CEO to make mistakes, then [he or she] won’t take chances,” said Mark. Boards must allow for failure, as long as it’s guided failure in the pursuit of a goal—with the expectation that the organization will learn, iterate, adapt, and move forward as a result.

One final note on hiring: integrity matters—always has, always will. McDonald’s seemed to forget this perennial fact in the hiring of the beleaguered Steve Easterbrook. The systems and lines of communication internally must have been gummed up enough for the Board to have no clue of his relationships with subordinates.⁹ Possibly, they overlooked his craziness because he was turning in one great financial performance after another. That his prior boss didn’t know or chose not to categorize him with a gross negative disqualifier says volumes. Then the Board hired him; how? Yes, Steve Easterbrook was a Four-Star General, but integrity remains the core prerequisite of a leader.

Holding the CEO Responsible

It’s not the Board’s job to set the strategy but to help the senior team realize their stated strategy. If OV is an agreed-upon way of operating the business, then the Board supports the approach through incentives. One board chairman had an under-nuanced philosophy about the CEO. “You either back ‘em, or you sack ‘em.” That, of course, does little to facilitate OV. The Board not only needs to provide the permission to move with speed and agility but the framework and boundaries to go with it. If the CEO and top management team are always second-guessing how the Board will interpret their actions, it adds friction to the wheels. Simply put, if a board aspires to hire a CEO to change the organization’s trajectory through OV, then the Board truly needs to give the senior team the freedom to do so. And that takes courage.

When Jeff Weiner was hired to run LinkedIn, his style was completely different from the prior CEO. Weiner was much more transparent. One of his first acts was to start a weekly company wide meeting in which he took questions. He was transparent in a way that was different in kind from the previous leader. Mark Kvamme says, “I actually sat in one of those meetings with other board members, and it made me so nervous because I thought, Holy crap, he’s saying everything. What happens if XYZ company hears about that?”

An essential instrument of the Board is the skill of “indirect influencing.” It’s completely different from directing the CEO and their senior team on what to do. Indirect influence is a separate category of leadership not talked about in the textbooks. The Board indirectly influences the specific issues put on the agenda, asking good questions, and providing additional information not already sanitized in the board presentation. “A board can help prioritize management by basically giving them the freedom to ignore certain things,” said Ben Baldanza. “You can only work on these four things, but you don’t have to worry about this right now.”¹⁰ This is a form of indirect influence—giving freedom to the management team to say that it’s okay not to get some things done because other things are more important.

Another form of indirect influence is how people are called on for comments or questions. A sophisticated and wise chair knows the opinions of each of their board members and can artfully manage the discussion by calling on people for analysis. This often preempts negative opinions or allows everyone to voice the negative opinions at the beginning of the debate. That way, they won’t inhibit or deflate later conversations.

In theory, no CEO has carte blanche authority to run the company without thinking of what the Board thinks. The Board hires the CEO, can fire the CEO, and sets the CEO’s compensation. Boards can’t (or shouldn’t) tell the CEO what to do but should tell them what they can’t do. The CEO can seek individual input from board members in one-on-one conversations, but having the Board agree on what the CEO should do is dangerous.

Hiring and Firing

Regarding CEO evaluation and compensation, today’s boards abdicate both responsibilities to third-party companies like Korn Ferry, a global organizational consulting firm. The consultant comes in to evaluate the CEO and establish the compensation structure. There’s nothing wrong per se with an outside firm setting a compensation benchmark. Compensation consultants provide insight on how compensation, both fringe benefits and salaries, compares to the company’s industry peer group. But evaluation and compensation are two distinct processes. The challenge with outsourcing the evaluation component is that firms like Korn Ferry want to be hired again. No consultant is going to rip on the CEO. That would obviate the engagement a year from now.

The good evaluation firms start with 360-degree reviews of the CEO and the Board, followed by detailed developmental reports. These reports are not critiques; they focus more on identifying weaknesses and strengths. They offer suggestions for capitalizing on strengths and plans to address shortcomings at the individual level (CEO and board member) and group level (Board and CEO top management team). They are worthwhile.

However, board members are still responsible for evaluating the CEO. If a third party is engaged, board members cannot simply accept the report and move on to the next agenda item. Board members need to debate CEO performance and invest time in these discussions. Insiders (i.e., the Board) cannot abdicate the responsibility for performance evaluation to outsiders (consulting firms like Korn Ferry), who will take the path of least resistance. That’s true of evaluating the CEO, as well as the Board. It’s impossible to assess the contribution of a board member without being in the room and experiencing the person’s contribution first-hand.

There’s no way an outside consultant can read a board transcript and make any substantive evaluation of the contribution of a board member. What happens with outside consultants and their soft reviews of the CEO also happens with their assessment of board members: “It’s all good. No need to worry. Every board member is doing great! So here’s our rubber stamp, in case the SEC ever comes calling.”

If the evaluator is not in the boardroom, it’s nearly impossible to conduct a proper evaluation of a board member.

The Board shapes the organization’s future with their choice of CEO and the influence they wield over the top management team selections; not just the right people, but the right category. A business luminary who had studied boards extensively explained that many accountants and lawyers tend to create friction for an OV firm while marketing, technology, and R&D people tend to have the opposite effect. Richard D’Aveni, The Bakal Professor of Strategy at the Dartmouth Tuck School of Business, recounted a specific example at General Motors:

The importance of selecting the right people extends to the Board of Directors itself.

Selecting for Impact

The future view of an organization is compromised if the Board is full of executives in the twilight of their careers. Not every executive in their waning years has stopped growing, of course. Imagine rejecting Peter Drucker for your Board because of age. Drucker was more relevant at 90 years old than most executives at 50.

However, the Board’s composition should represent the organization’s strategic needs, transforming itself to become more tech-savvy. Research conducted by MIT in 2019 revealed that organizations with digitally savvy boards outperformed their less-sophisticated peers. Unfortunately, the ongoing challenge for boards is the lack of tech-savvy among its members, a third of whom admit to not having learned about innovation.¹¹

A digitally savvy Board is comprised of members with an enterprise-level understanding of current technologies such as AI and Big Data. In addition, they are familiar with digital processes and platforms that enable new business models, an improved customer experience, and more efficient operations. This digital savviness is often a consequence of one of two activities: time spent, either as a board member or a senior executive, in a high-clock-speed industry (where business models change quickly, such as software or telecom), or having an executive role with a strong technology component. Researchers at MIT found that it takes three digitally savvy members to have a statistically significant impact. In fact, companies with three or more digitally savvy directors had 17 percent higher profit margins than those with two or fewer, 38 percent higher revenue growth, 34 percent higher return on assets, and 34 percent higher market cap growth.¹²

Filling a tech void on a board might mean reaching outside the industry. This is preferable to only including academics and professionals from the industry. If you can’t build tech-savviness from within, it might be necessary to hire board members solely for their tech expertise. You simply can’t wait for a board member to get up-to-speed (think the so-called 10,000-hour rule: 3.5 years at 8hrs/day)—the organization will lag behind.

The primary characteristic you want in a board member is expertise born from experience. Companies appoint a director to their Board primarily for their experience. They have an intuitive feel for the industry. The industry and business function to which they have dedicated their career is second nature. The Board often deals with complex situations where many factors need to be weighed simultaneously. This is where board members show their worth. They can reach back into their intuition to frame issues facing the firm.

Boards need directors who have invested the necessary time and effort in digital opportunities to intuitively connect the dots between what they know and the current situation in front of them. Firms that don’t have this capability on their Board of directors will have to face only one uncertainty: how long it takes them to go bankrupt. They must have all the three qualities that comprise the Disruptors Trifecta, which I discussed in chapter 4: smart, knowledgeable, and technologically fluent.

Don’t be overly concerned that your board members have so-called “skin in the game”; that can send a wrong signal. It indulges them. It’s critical that the Board is filled with those who aspire to make an impact, who want to be there and don’t need to be there.

Don’t fill the Board with former CEOs. In my research, board members who have been CEOs come in two flavors. One is the former CEO, who views themselves as better equipped to be the CEO than the current one. That type of board member will pick away at the current CEO and stick their nose into areas reserved for senior management. The other is the empathetic former CEO board member who thinks, “This Board is a bunch of jerks. My role is to be the CEO’s cheerleader.” A better approach is to limit or rule out altogether former CEOs as board members. Or perhaps only recruit those who were CEOs for a short time and have participated in at least five other boards before being evaluated by yours. In the past, companies sought out directors who had a successful history of building companies. The thinking was that such directors would contribute with their experience. “That doesn’t work so well going forward now,” says Richard Manoogian, Chairman Emeritus of Masco and former Ford Motor Company board director, “that’s because in the Fourth Industrial Revolution, what worked even five years ago won’t work in the present.” Instead, Manoogian recommends putting people on the Board who are still running something and dealing with “all the things we didn’t even worry about ten years ago.”¹³

Velocity Fabric

OV is not an initiative for a certain period of time. It’s not an 8-step system. There is no hiring an outside consulting firm to implement OV as a project while the company goes on with its regular business. It is a deep conviction that arises from within an organization. It’s what’s underneath the surface, at the foundation, that will ensure a pervasive mindset change and put a corresponding framework in place. And that foundation is primarily built on the Board.

Board members must be in the battle, not just observers of the battle. Board members with an attitude of “It doesn’t matter what happens as long as I can’t be held to blame” need to be replaced.

OV tests the corporation’s fundamentals—what we believe in, what we seek to achieve, what we reward, why we promote, how we talk to each other, and how we approach everything from information access to who receives decision-making authority to accept more risk.

A board first needs to understand the essence of OV, the “why” of it. The Board can then facilitate a structure that allows the company to operate with OV. Not just for growing the business, but for achieving the company’s environmental and social goals. OV transcends profits. It is woven into the fabric of the community, and the Board provides the tools to make that happen. They exert direct and indirect influence with the issues they raise, the questions they ask, and the information they provide.

However, the key for any of these positive changes to take root— for OV to flourish—is to create an environment that doesn’t lead to boardroom boredom.

What? OV begins with the Board of Directors. Boards that see their role as merely keeping the firm out of trouble enable a path to irrelevancy.

So What? Boards have the ultimate opportunity to challenge strategic direction and provide the permission senior leaders need to move with speed and agility. An OV leader must make strategic moves before they become obvious. Providing “air cover” for well-reasoned risk-taking allows leadership to test, learn, and grow at the pace of change.

Now What? Transparency and engagement between the Board and the top management team before, during, and after board meetings must be standard practice. There must be complete trust between the Board and the management team for this to happen. If not, fix that first. Before all heads can be held high, some heads may have to roll.

 

¹  “Boeing 737 Max Lion Air Crash Caused by Series of Failures,” BBC News. www.bbc.com. www.bbc.com/news/business-50177788 (accessed October 25, 2019).

²  P. Robinson and J. Johnsson. n.d. “Two 737 Max Crashes in Five Months Put Boeing’s Reputation on the Line—Bloomberg,” Bloomberg BusinessWeek. www.bloomberg.com/news/features/2019-03-13/two-737-max-crashes-in-five-months-put-boeing-s-reputation-on-the-line

³  A. Pasztor, D. Sider, and A. Sider. “Boeing Backs MAX Simulator Training in Reversal of Stance—WSJ,” The Wall Street Journal. www.wsj.com/articles/boeing-recommends-fresh-max-simulator-training-11578423221?mod=searchresults&page=1&pos=9

⁴  Baldanza, Interview.

⁵  C. Woodyard. May 25, 2019. “On Autopilot: ‘Pilots are Losing Their Basic Flying Skills,’ Some Fear After Boeing 737 Max Crashes,” USA Today. www.usa-today.com/story/news/2019/05/25/boeing-737-max-8-autopilot-automation-pilots-skills-flying-hours-safety/1219147001/

⁶  Astrachan, Interview.

⁷  Baldanza, Interview.

⁸  Kvamme, Interview.

⁹  J. Kelly. August 26, 2020. “The Saga of McDonald’s Fired CEO Is Heating Up With New Allegations,” Forbes. www.forbes.com/sites/jackkelly/2020/08/26/the-probe-into-mcdonalds-fired-ceo-is-heating-up-with-new-allegations/

¹⁰  Baldanza, Interview.

¹¹  P. Weill, T. Apel, S.L. Woerner, and J.S. Banner. 2019. “It Pays to have a Digitally Savvy Board,” MIT Sloan Management Review 60, no. 3.

¹²  Ibid.

¹³  R. Manoogian. April 22, 2020. “Chairman Emeritus of Masco and Former Ford Motor Company Board Director.” Interview by Alan Amling.