THE JOURNAL OF PEOPLE + STRATEGY
The Agile Board
September 15, 2021
Agility is now a key business skill. By using a five-factor framework, C-suite leaders and board directors develop stronger agility muscles.
Henna Inam is an executive mentor with The ExCo Group and board director with Engro Corporation. She is also the author of Wired for Disruption – The Five Shifts in Agility to Thrive in the Future of Work.
This article was published in print and online in the Summer 2021 Issue of the Journal of HR People + Strategy.
By Henna Inam, Engro Corporation
This period of seismic disruption has provided an enormous leadership test for CEOs and their C-suite teams, and they have faced heightened scrutiny over whether they are able to develop new mindsets, capabilities, and competencies for the more complex environment of the new normal. But just as important, board directors also need to develop their skills to better steward their organizations through disruption.
As an independent director serving on the board of a publicly traded conglomerate (Engro Corporation), I have experienced first-hand the challenges boards are confronting:
- Redefining what success looks like in a year when financial results were unpredictable due to the pandemic and employee safety and well-being rose to the top of the agenda
- Striking the right balance of working through key decisions with the CEO without micromanaging
- Responding to the increased need for stakeholder engagement (climate, employee activism, response to the Black Lives Matter movement)
In my book Wired for Disruption – The Five Shifts in Agility to Thrive in the Future of Work, I make the case that disruption is here to stay and that it is our job as leaders to evolve ourselves to be agile. I share a framework focused on five shifts in agility that help leaders thrive. In this article, I will share each form of agility and apply it to the context of boards of directors. (Take the quiz on agility at https://transformleaders.tv/wiredfordisruption/.)
1. Neuro-Emotional Agility
As the world disrupts, we are all leading in greater complexity, ambiguity, and speed of change. From a neuroscience perspective, unpredictability and perceived lack of control, which we all felt during the pandemic, creates a threat state in the human nervous system, part of our evolutionary survival mechanism.
This level of threat creates elevated stress in our minds and body. Our brain’s reaction to stress is to double down on our stress response. For some, it results in a desire to exert more control. For others, it results in a desire to disengage. Just when we need all of our resourcefulness to manage change, our stress makes the challenge even harder. This threat state prevents us from seeing things clearly and coming up with creative solutions. It has led to widespread burnout.
When our nervous systems are threatened, we tend to narrow our focus toward survival thinking. At the board level, this is dangerous because boards are increasingly being asked to respond to long-term sustainability threats and opportunities, as well as multi-stakeholder perspectives. This requires a calm and creative board with the presence of mind to consider what is important over the long term while weighing in to provide perspective to CEOs in crises.
Neuro-emotional agility is the ability we each have to manage our own neurobiology to shift ourselves from states of threat to states of calm, creativity, and centered presence so we can make better decisions. In disruptive and high-stress environments, board members need to become aware of their own nervous system-induced response and grow their capacity to manage themselves toward greater resilience. As one board member said to me recently, “Board members are human too.”
There are several resources to manage our own neurobiology and reduce the threat state. Dr. Richard Boyatzis, a 30-year researcher from Case Western Reserve University, shares that our brain has two different neural networks: the analytic neural network, which is task-focused, and the empathic neural network, which is more open to being in a connected state with others. His research shows that these networks act like a see-saw. When our attention is focused on one network, the other quiets down. When faced with a threat, many of us switch to task focus to deal with the threat state.
Dr. Boyatzis’s research shows that we can be more agile and open to change using our empathic neural network. His research also shows that we make more ethical decisions when we are in the empathic neural network. How to switch to this neural network? He suggests that we start by activating our parasympathetic nervous system. We do this by thinking of positive emotions like gratitude, and hope, or practicing mindful relaxation. Another key personal accelerator for directors is what I call the Purpose Accelerator.
At an individual level, this accelerator helps us improve our agility by reflecting on how we can be a force for good to solve challenges that erupt during disruptions. We find the sweet spot between our gifts and strengths, what is meaningful for us, and what our stakeholders need from us at this moment. As we steer our attention intentionally toward how we can serve, it helps us move toward the empathic neural network.
At an institutional level, many boards and CEOs have chosen to lead by anchoring themselves in the organization’s purpose and values. For example, Unilever has emerged strongly as a purpose-driven company. In 2010, CEO Paul Polman unveiled its new purpose, “to make sustainable living commonplace.” Since then, Unilever created a set of leadership standards and taken 60,000 employees through workshops to discover their own purpose. These purpose conversations help employees develop their own Future-Fit Plan, a framework that Unilever uses to transition workers to a more flexible workforce model for managing future crises.
QUESTIONS FOR DIRECTORS
- Ask yourselves whether your organization’s purpose is clear and helpful for decision-making during the disruption.
- Each board member can reflect on their own purpose and share this with others on the board. The Purpose Accelerator can be used as a resource. Connecting with our own purpose and then sharing it with fellow directors can enable greater team cohesion and trust, which allows for healthy conflict and the exchange of different perspectives.
- Ask yourselves whether there are clear plans and protocols
2. Learning Agility
Alvin Toffler, the American futurist, wrote: “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.” Learning agility is the ability to learn, unlearn and relearn. Boards are increasingly having to steward decisions in unpredictable situations. In times of disruption, our ability to unlearn is challenging and critically important. This requires us to have the humility and curiosity to examine our own biases, mindsets, and assumptions.
From a neuroscience perspective, biases are a normal and efficient way for the brain to create shortcuts in decision-making. It’s very effective when the future is like the past and nothing is changing. The brain continues to operate efficiently. However, when things are changing rapidly, the brain can continue to believe old assumptions and even throw out new data in favor of what it believes. This is called cognitive dissonance.
Some common and well-researched biases include our bias to believe we are right, and our bias to believe the people we like (who we perceive are like us) over the people who are different. Novel and rapidly changing situations (e.g. how do we safely bring people back to work) often don’t have a best-practice solution. We have to create practices, which require learning, experimenting, and listening to many perspectives.
A great tool that I recommend is what I call The Bias Checklist. It allows each of us to practice understanding our own biases so we can grow our learning agility. between an organization and its employees? For example, a view that some board members may have is that the employees’ views on politics, social justice, or the environment should not be part of workplace conversations. As remote work has blurred the lines between personal and professional lives, and as companies are expected to do more to address societal challenges, this view can seem outdated. Younger generations expect to bring their whole selves to work, including their non-work beliefs and perspectives.
QUESTIONS FOR DIRECTORS
- How does each board member become aware of their biases and share that bias up front? How does the board engage in conversations about the directors’ individual and collective biases and challenge them?
- Is the board creating room for unlearning? Do the board’s culture and the board meeting agenda create open space for challenging assumptions and uncomfortable conversations? For example, boards need to debate whether they are there to serve all stakeholders or primarily the shareholders.
- As things change rapidly, boards need to challenge their assumptions about future scenarios. Many boards have scenario committees to think about the long-term impacts. Does your board need one?
- What are each board member’s assumptions about the role of employees and employee activism? What personal biases do board members have about the employment contract?
- As new situations and crises emerge, which decisions are part of the board’s mandate vs. the CEO’s mandate? Is the board discussing which decisions are right for them to engage in?
- Does the board create opportunities to learn together so that shared experiences can be discussed? For example, the board that I serve on created a learning session as part of the World Economic Forum’s virtual Davos meeting in January 2021. We attended a key session on long-term thinking and stakeholder capitalism and then debriefed our learnings.
- What are the relevant learning topics for the board? Current topics include: ESG (what are the relevant risks and opportunities? What are the right metrics?), digital transformation, future of work (reskilling and upskilling), employee activism, cyber-security, other industry-specific innovations and disruptions, and climate activism from shareholders and investors.
- How to structure learning? Does the scope of the committees need to shift? Do we need more fluid committees that come together to solve emerging issues?
- Who should steward board learning? Who is the board learning from? For example, many boards are used to learning from consultants and other experts. In complex situations, we need to find new sources—for example, to get direct and unfiltered perspectives from employees, customers, activists, etc., without undermining the decision-making authority of the CEO.
3. Trust Agility
Trust agility is the ability to grow trust to have pivotal conversations. Trust in teams makes them nine times more agile. These disruptive times require strong and agile decision-making, and that requires healthy conflict and debate. Healthy conflict requires strong trust within a board.
QUESTIONS FOR DIRECTORS
- Do board members trust each other enough to engage in healthy conflict? Are levels of trust among board members and with management measured regularly, so that they can work together constructively to make decisions on emerging issues?
- Is there enough diversity of perspective on the board and are the nominating/governance committees ensuring that these diverse voices get heard even after they are brought on to the board?
- Is there understanding and alignment on the values of the board as a whole (e.g., their collective views on environmental and social issues)?
4. Stakeholder Agility
Stakeholder capitalism is on the rise. The board needs to evaluate whether the current shareholder focus needs to expand toward a greater stakeholder focus. The Business Roundtable has declared that the purpose of an organization is to serve the needs of its key stakeholders and not just shareholders.
CEOs and boards are increasingly facing pressure to take a public stand on key issues like climate, social justice and race relations, and voting laws. Stakeholders demand it and activist shareholders and investors alike are withholding support for re-electing board members based on their stances on these issues.
An example of stakeholder clarity is Delta Air Lines. CEO Ed Bastian and the board chose to take a stand on the Georgia voting laws to not restrict voting. The level of clarity on how to make decisions within a stakeholder ecosystem stemmed from Delta’s purpose and values to connect the world.
QUESTIONS FOR DIRECTORS
- Who are the stakeholders that matter most, given your business ecosystem?
- How will the board engage with stakeholders? How will the voices of the stakeholders be heard (e.g., Exxon Mobil has recently added a climate activist to its board)?
- What do your stakeholders want? What are the mechanisms at the board level to engage with stakeholders? Is management regularly conducting listening sessions with all stakeholders? How does this information and insight get communicated to boards? How do we listen deeply to understand these stakeholders? What are the risks and opportunities and what are the metrics that matter to these stakeholders?
5. Growth Agility
Growth agility is the ability to grow and develop ourselves in response to the complexity of the world in which we operate. We as board members need to see our work on boards as opportunities for enormous growth in our own knowledge, skill sets, and capacities.
Growth agility requires a mindset shift. Many of us who have had careers of great achievement and impact believe that we have somehow “arrived.” As board members, we may then assume that our role is to share our perspective with management rather than see board service as an opportunity to learn and grow ourselves.
Each board member can create a development plan for themselves. The role of the board chair needs to evolve from “the one whose voice counts” to the one who is facilitating to ensure all voices count, including the dissenting voices. Times of complexity require the exploration of multiple perspectives.
The capacities for board members include:
- The capacity to engage in pivotal and difficult conversations where there is no right answer
- The ability to reflect and grow self-awareness of their own agility and impact
- The ability to create a trusted partnership with the CEO and also hold them accountable for the non-negotiables
Our board on Engro recently went through a self-reflection exercise that not only enabled learning but also created tremendous trust.
There are no rules about how an individual board member’s values get translated into organizational decision-making. We need to enable space and time for reflection and to steward the CEO’s growth (rather than just focus on their results). Speeding up our personal and collective evolution requires us to slow down and pause and reflect.
QUESTIONS FOR DIRECTORS
- Does the board’s human capital committee need to re-evaluate CEO succession and the new competencies that are expected of the CEO (e.g., agility, empathy, resilience, integrative thinking)? Do the standards of leadership need to be refined across the organization?