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The New Director's chair

Beth Comstock

On Boards, Sometimes the Most Obvious Questions Don’t Get Asked

September 9, 2019

Beth Comstock is widely known for the work she’s done to drive innovation at GE, and for her book, “Imagine It Forward: Courage, Creativity, and the Power of Change.” She is also a director at Nike, and my colleague, David Reimer, the CEO of The ExCo Group, and I were eager to catch up with her to hear her insights about boards for our interview series with prominent directors.

Reimer: You’ve been active as a director on boards for 20 years now. What’s changed?

Comstock: The expectations of boards have changed. Directors are much more demanding about transparency, and they want more ability to get to know the leadership team directly — not just to have them come and pitch to you in board meetings, but to be able to spend time with them in the field, and to get to know people on the leadership team.

There’s always been an expectation that you have to build your own kind of information network, but there’s more of an understanding among directors that you must do that. Culture has also emerged as a theme that matters. When I joined my first board, the topic wasn’t even on the board agenda.

Reimer: How do you get a feel for culture as a director?

Comstock: You have to get good at asking probing questions. Do your homework in advance, and nothing beats going out on your own. If it’s a retail company, you can just go to a store and be your own mystery shopper and ask people how they like working here or what’s it like. You also have to say to management sometimes, “Hey, we’re not seeing enough of XYZ team.” Or, “We don’t understand why this is happening.”

Another area that has changed for all boards are new issues like cybersecurity. It’s not enough just to know you have good protocol. You want to eyeball the cybersecurity team. There’s no benefit in me going to sit at a computer with the cybersecurity person, but I want to have had a chance to question them, to see them.

Bryant: Are there certain questions that you would suggest directors get comfortable asking?

Comstock: Whatever your expertise is, start there with asking good questions. You were brought on the board because you have an expertise. I came into Nike largely because I’d worked a lot in digital media. I’m a marketer.

So a lot of the questions I’ll ask would be about things like the competition. Why is the competition doing this? Did you try to do that? Why are they succeeding? You try to dig in and you try to bring in things that maybe don’t get discussed. I try to start with some basic expertise. I’m not going to be the best one to ask them supply chain questions.

That being said, sometimes the most obvious questions aren’t being asked because people are so deep in their expertise. So just stop and say, why are we doing it that way? I know we’ve always done it, but why now? That didn’t work, but what did you learn? What should we ask you in the future? Timing can also be a key factor. Why now? Why didn’t it work then? Might it be a good time now?

    “With culture, don’t just expect the answers to come from the head of HR.”

And with culture, don’t just expect the answers to come from the head of HR. That’s putting too much pressure on the HR team. Does the legal counsel have a view of culture? Does the CFO? What about the global operations person?

It’s also asking different people similar questions. And when you ask to see culture surveys, don’t just settle for the aggregate results. Show us the worst ones. Show us the toughest feedback that caused you concern. Ideally, the next time they’ll offer that without being asked.

I’ve often thought that a great way to go into a company as a director is to join the audit committee, because you do get deep in the weeds. You get the ombudsman’s complaints, you get the financial issues, and you develop a feel for the company.

Bryant: What are the biggest lessons you’ve learned about serving on boards?

Comstock: When you’re on the board, you’re not running the company. There’s this misperception that if you’re on the board, you’re going to tell them what to do. Every chairman and CEO has a board they’re accountable to, so there is that check and balance, but management runs the company, not the board.

You also learn as much from the other board members as you do from management, and that surprised me. You see how they make decisions, what kind of questions they raise, and how they look at issues. It challenges you to be on your toes, and you learn a lot from these folks.

Third is that it’s a serious role. When things are going great, you can cheer on the team, and you ask tough questions. When you have challenges, you really have to get in there and be willing to wade through a lot of issues and ugly truths, but you also have to support the team. Many people assume it’s all smooth sailing, and that you just show up a couple times a year. It’s work.

Reimer: You’ve on both sides of the table – as a board member, but also presenting to boards in your many roles over the years. Any reflections on what makes for the best board presentations?

Comstock: Early on, the goal was to do a killer presentation, have the board say, “Bravo, that idea is genius.” Then you don’t know what they talk about after you leave. There’s all that anxiety, and oftentimes they don’t talk about anything because you’ve covered everything.

Instead, I wish I would have gone in with some questions. The board members have their areas of expertise, so it’s better to ask them, “Here’s where we’re going. What do you think?” People might think that’s a sign of weakness, but I don’t subscribe to that.

Reimer: Are there a couple of key pieces of advice you would give to a CEO about how to engage successfully with the board?

Comstock: You’ve got to ask yourself, “Am I really using my board effectively?” The best leaders I’ve seen are the ones who open themselves up and say, “This didn’t go as well as we wanted to. I’d like to have a little post-mortem with you.”

So that would be another piece of advice: volunteer the post-mortems. Don’t necessarily wait for your board to say, “We didn’t think that went so well, what are you going to do about it?”

Bryant: Let’s talk about innovation, a big area of expertise for you. What is the role of the board of directors in helping foster a culture of innovation?

Comstock: It goes back to asking good questions. I hope that every board has a committee structure that allows for deep dives into innovation. At Nike, we have an innovation and sustainability committee. At GE, we set up a science and technology committee that served the same function.

    “The board, more than anything, needs to be a voice for tomorrow.”

And what’s the board asking there? They’re asking, “Are we spending enough money, or too much money?” It’s a chance for the board to unpack important trends in a way that the full board can appreciate. As part of your strategy review, the board’s responsibility is to make sure there is a strategy for tomorrow. The board, more than anything, needs to be a voice for tomorrow, and to be asking those probing questions.

What didn’t work and why? How are funding decisions being made? Is there a board or VC board committee structure to bring different points of view to make decisions? Who are the people who are running these innovations? What are their backgrounds? What happens to them if they succeed or don’t succeed?

You’re pulsing on all those questions, but largely you’re looking at how capital and people are being allocated, and really testing the sincerity of intention. You want to make sure people aren’t just dabbling.

Bryant: As a director, what level of engagement do you need from the CHRO?

Comstock: You need transparency, clearly. They need to have the freedom to express their points of view, separate from management. They need to be able to say, “Maybe the CEO sees it this way, other people see it this way, but here’s how I call it,” and feel that they’re encouraged to do that, especially if they have data to back it up. That said, CHROs shouldn’t bombard you with data. They have to come in with a point of view, a perspective, and then be willing to back it up with the data.

Reimer: Given all your experience in different roles over your career, how would you complete the sentence: “Leadership is about…?”

Comstock: leadership is about courage and getting people to believe in the impossible. It’s also a journey into yourself to do both of those things. Courage is also the ability to take risks to do things that aren’t popular, and the ability to see tomorrow when your investors only want you to plan for today. Courage is about taking risks on people who are different or nontraditional choices. Courage is about understanding your strengths and weaknesses and realizing you need people to round you out.

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