Big Ideas in the Boardroom

“Boards can sometimes fall back into thinking that all they’ve got to do is governance and then they’ve done their job, but that’s a trap,” says Andy Brent, Senior Independent Non-executive Director at Connect Group. “It’s important they are engaged in the long-term strategic direction of the business.”

Balancing short-term imperatives with long-term goals is one of the most challenging issues a board will contend with, as highlighted in Criticaleye’s recent survey.

In fact, 95 per cent of respondents said that boards should pay greater attention to creating long-term value, while devoting more time to strategy was cited as the best way to drive better business performance.

On top of this, the time spent on corporate governance and reporting issues was seen as a potential barrier to adding value, with over half saying that it diminished the value a NED could add to the business.

“Non-execs and the board have to spend time on governance because it’s a key part of their role,” says Celia Baxter, Non-executive Director at Senior. “But I think that if it’s all the board does then it’s not going to be very helpful. The board has to grow the business and purely focusing on governance is unlikely to do that.”

This point is echoed by Charlie Wagstaff, Managing Director at Criticaleye, who said that NEDs have to apportion their time carefully in order to add maximum value: “Non-executive directors must be the champions of their executives, but they must do so in an increasingly complex and competitive environment – whether that’s getting the right balance between supervision and strategic input, or ensuring teams have a diverse set of views and experiences.”

Closing the gap

The interplay between the executives and NEDs must be open and transparent. You cannot get sucked into an ‘us and them’ mindset.

Pauline Egan, Non-executive Director at AIB Group (UK), says: “[The relationship] varies from company to company. It is indicative of the culture and whether or not the executives see the NEDs as a sounding board, a source of alternative perspective and independent challenge, or just a regulatory nuisance that must be complied with.”

Chairman and NEDs have to make the effort to be visible. Andy comments: “Make sure you put the time in to go and visit your business regularly outside the cycle of board meetings, both to ensure that you know the people and so they know you understand what they’re doing.”

Andy goes on to say that there has been a conscious effort at Connect to make sure this is happening. “We rotate our board meetings around the different company locations; wherever we go we’ll have a pre-board breakfast session with the local management team,” he continues. “It helps us meet more people and gives us a chance to see the nuts and bolts of the business.”

Ultimately, this interaction helps the NEDs and executives understand their respective challenges and how to work together. “It’s very important NEDs get that alignment,” he adds.

Don’t get overloaded

The information that boards are expected to understand and provide oversight on continues to expand, particularly in regards to risk. For some NEDs, it can be difficult to see the wood for the trees.

Phil Smith, Chairman for UK&I at Cisco, comments: “You need a good company secretary and chairman to make sure you’re giving issues the right focus, and to ensure you’re not getting bogged down in unnecessary details and losing the purpose of the board.

“For example, if the board receives reports with hundreds of KPIs to look at, you can focus on one or two but ultimately the important issues are drowned by the less important. The company secretary has to be vigilant on the information coming to the board.”

Quite simply, “the board does not have the time or even the proper context in many cases to review a dozen 80-page papers”, Phil comments.

This has put additional pressure on audit committees in particular, and an increasing number of sub-committees are being created to deal with specific challenges.

Tim Eggar, Criticaleye Board Mentor and Chairman at Cape, says: “Much of the governance can be done outside the main board, especially a lot of the process work. It’s then up to the chair of each committee and the chairman to ensure it’s not swamping the agenda for the main board meetings.

“The committee chairs should also ensure that routine governance process isn’t dominating.”

A good chairman will understand how to set the right rhythm for discussion in the boardroom, so that governance and compliance are executed to a high-standard, while proper consideration is given to the business and its resilience over the medium to long term.

Andy recommends regular strategy reviews, whereby the board comes together and looks ahead to think seriously about where the business is going, and whether it possesses the leadership capability to get there.

“Don’t run it as a session where the executives come with the plans and the non-executives sign it off, but rather a working session where the teams come together, challenge each other and maybe even go through one or two iterations of what the strategy should be,” Andy adds.

By Dawn Murden, Editor, Advisory

Our survey also found that two thirds of NEDs and chairs do not frequently meet the HRD to discuss executive leadership development. Why might this be? If you’d like to get in touch about this, or any of the findings, please email dawn@criticaleye.com

Don’t miss next week’s Community Update, which will bring you highlights from Criticaleye’s Asia Leadership Retreat, in association with Accenture and CEIBS.

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How to Support a First Time CEO

Stepping into the CEO role for the first time is a daunting task. You’ll face immense pressure to tackle widespread responsibility at a relentless pace. No CEO can do it alone and a first-timer in particular will need support in making that transition.

“The top job requires so many skills and leadership capabilities that just acquiring them − let alone using them − can seem overwhelming. Once you’re in the role, don’t expect that you can do everything yourself; a strong leadership team should be there to support you and give you time to reflect and decompress,” says Matthew Blagg, CEO of Criticaleye.

We ask leaders for their experience of being, or supporting, a first time CEO. Here’s what they had to say…

Get the Support of the Board

Ron Marsh, Criticaleye Board Mentor and Chairman at Polypipe

For a first time CEO probably the biggest challenge is having the confidence to drive through change in an organisation that they’re not entirely familiar with.

The chairman is there to support them in that, but also to challenge them and respond to their individual needs. He should be supportive without taking responsibility away from the chief executive. It’s more difficult for a NED to directly support the CEO as they don’t have routine interaction with them, but they should provide the sounding board for the chair and CEO to reach a solid conclusion that they can then back.

One of the things a chairman should look for in a new CEO is whether they are overworked – the hours they put in and the sheer effort needed for the job is immense; it can be too much for some.

The main concern is whether the chief executive is feeling lonely and isolated. That often happens when significant changes occur within the top team and at that point the chair should provide a little more help.

Look for Strategic Insight

Catriona Marshall, CEO at Hobbycraft

I joined Hobbycraft in 2011 as a first time CEO. I was heading into a major change programme in a very competitive market with high expectations from my private equity owners. I knew I would need the support of a good board.

The chairman’s role is very important – they maintain a healthy relationship with investors and the board. They should be supportive but also independent. You want them to point out the pitfalls and give you honest advice but also help you on how to get to where you want to be.

From a functional perspective, the CFO should be able to take on things like IT, the supply chain and property but I love to have a buddy on the strategy; someone who can understand the implications of a strategic question.

Getting a CFO who is technically good and commercially savvy is hard, but getting one who can also build a team is the real trick.

Find a Top CFO 

Ian Harley, Criticaleye Board Mentor and former Finance Director and Group CEO at Abbey National

The relationship between a CEO and CFO is the most important in any corporate entity because of the level of contact between them.

They should be complementary – with different strengths and talents – but it’s also very important that they are in locked step; they must move together on the big issues.

I spent five years as CFO to a very charismatic CEO, an ideas factory who sometimes spoke before he thought. When doing investor roadshows with him I’d need to catch those loose balls. My role was to be pragmatic. I also focused on the numbers because he wasn’t technical in terms of accounting.

When I was promoted to CEO I was lucky to be able to pick my own CFO. It was someone I knew from inside the organisation and had worked with for years. If you inherit an incumbent that’s potentially quite tricky – especially if they were a candidate for the top job, which is almost always the case.

Any CEO will have disagreements with the CFO but you must try to have them in private because stakeholders in the business will see the chinks between you and will worry about it, if not try to exploit it.

Create a Team with Complementary Skills 
Greg Morgan, Director at executive search firm Warren Partners

The energy and dynamism of the first time CEO can be a huge asset to any business, especially when well-supported and given the autonomy they crave.

When preparing for a first time CEO role the candidate should be open and honest about their relative blind spots – everyone has them. These could range from having a limited experience of operations, not having done M&A or being a novice in engaging with shareholders or the City. Individuals should involve themselves in situations that enable them to mitigate some of those blind spots.

Businesses that are committed to developing their people will encourage their ‘brightest and best’ to operate outside of their comfort zones and to seize every opportunity to broaden their skillset.

As a first time CEO, it’s no less important to flag where you’re going to need support – the business will not be expecting you to be the finished article; they will respect your honesty and candour and it will get them thinking about the make-up of the team you will need around you.

Potential implications for the business range from hiring or retaining a ‘heavyweight’ CFO to support the new CEO, or asking the chair to remain in the post a while longer.

Follow Criticaleye on LinkedIn 

Connecting with China’s Consumers

Western businesses won’t break the Chinese market with ambition alone. It takes patience, research and knowledge of the market’s consumers. Understand the customer and you will know how to position, alter and grow your offering.

To think that China is a homogenous or static market would be a huge mistake. Criticaleye’s Global Conference Call, Understanding China’s Consumer Landscape aimed to drill down into the complexities of consumer behaviour.

Michael Crompton, General Manager for Asia at Criticaleye, said: “Understanding the consumer is so important. The company − its brand, its product or service and everything it stands for − has to match the desires in the marketplace. Work out what people are passionate about and appeal to that. Also consider product differentiation depending on whether you enter a basic, mid-range or premium market.”

Here are some of the key points to emerge from the call:

Foreign vs Home-Grown 

David Comeau, former President for Asia Pacific at Mondelez International, which owns brands, including Oreo, Chips Ahoy! and Belvita, explained that you can’t just export a Western idea and hope that it’ll stick.

“It’s not simply about bringing a product or idea to China, it’s about how we understand what the Chinese want and do it in a way that feels home-grown,” he said.

To tackle this, David gave his Chinese team the freedom to tailor the brand communication and new product pipeline to suit the market. “We gave them ownership, we set them creating messaging around the brand that made sense to the Chinese consumer so it felt home-grown,” he said.

Remember you will be competing against a rising number of domestic brands, many of which are enjoying growing customer loyalty.

Anne Stevens, Criticaleye Board Mentor and Board Trustee for charity Over The Wall, reflected on the market changes that have occurred since she was Vice President for People & Organisation at Rio Tinto Copper, where she led the people strategy and practices across the Americas and Asia Pacific.

“There has been a rapid amount of change in a relatively short space of time; businesses and products are now viewed differently. In particular by millennials and younger Chinese consumers,” she noted.

“Previously, we saw a lean towards Western products, for example Prada and Burberry in luxury fashion, but now there’s a move towards local brands. Leaders need to stay on top of these changes and tune into what the market is telling them.”

Take Advantage of Trends 

A taste for domestic brands is not the only consumer trend in China and understanding more of them helps you position your product or service.

Chris Riquier is Board Director at Foxley, a platform for website design and online marketing; prior to that was CEO for the market research and market information group, TNS Asia Pacific, where he gained insight into the Chinese market.

On the Conference Call Chris noted some trends that Western companies have done well to adapt to; one of which is the growth of domestic tourism, which outdoor clothing company The North Face has taken advantage of. “Previously, their advertising in China was very much directed at Western experiences such as trekking in The Alps, now it’s directed at urban Chinese who want to experience rural China.”

He also explained that uniqueness and self-expression are of growing importance among Chinese consumers. “Individuality is an intoxicating taboo that is growing within the marketplace and according to research, 64 per cent of consumers within Beijing and Shanghai agreed with the statement: ‘I don’t like it when I see others wearing the same clothes as me,” he shared.

Understand the Channels 

According to Iñaki Amate, Group Director for Greater China at Fjord, Western companies often underestimate the power of digital platforms in China, especially those on mobile.

“It’s important to understand why people behave as they do and why people in China consume media in a different way compared to other markets,” he said. “Always test before you enter, and not just segments; create the persona of the different users before you create the products and services. In a market like China, which is so broad, it may sound challenging but you need to go one level deeper.”

Take the pervasive WeChat, for example. While it is similar to an instant messaging platform like WhatsApp, it also has a payments platform, meaning consumers can order food, taxis, manage their money, sort utility payments, pay traffic parking tickets, check the weather – it has a long list of uses and owner Tencent is constantly developing it.

Chris said: “I come back to a Western market and see the messaging apps we have; they seem positively archaic compared to China. Brands have to be aware of this if they are going to connect with consumers.”

When David was at Mondelez he realised the company had to adapt to the rise of ecommerce in China. “We saw other companies [start] on [nothing] and grow unbelievably quickly – for example, we saw a Chinese nut company called Three Squirrels go from zero to more than 200 million sales online. We weren’t growing like that,” he explained.

That’s when Mondelez started partnership discussions with companies, including internet service portal Tencent and the ecommerce company Alibaba, to develop the business’ online mindset.

“That was a huge win for the organisation in terms of incremental growth. A lot of growth will come from those channels as consumers develop stronger online habits; this is happening elsewhere but China’s leading the way,” said David.

Partnering isn’t a Necessary Evil 

There’s often a presumption that China plays by different rules. One of these is that you must join forces with a Chinese entity to get your business off the ground, but this is not always the case.

Chris at Foxley noted that it’s difficult to make a generic statement about partnering and the best course of action, be it a joint venture, M&A, investment or going in alone. “It’s contingent on what market you are going into, your company and products or services,” he said.

“Apple is an example. Where it has strong products it’s going in alone; where it feels less able to compete it’s going down the partnering or investment route – for example, it has invested $1 billion in the app-based taxi company, Didi Chuxing, which is Uber’s main rival.”

If you’re going to form a partnership, be it via a joint venture with a commercial partner or another type, it must deliver discernible value and include clear roles for those involved. “Partnerships in China need to be seen as a good thing. It’s a real chance to create a ‘one plus one equals three’ scenario,” David adds.

Read more from Chris Riquier, or find out how to organise your leadership team in Asia 

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The Great Leadership Taboo

Plenty of CEOs and senior executives scoff at the idea of having anything to gain from leadership development. After all, if you’re running a business or a division of a corporate, you’re evidently accomplished in your role, so why would you need a guiding hand?

It’s an old-fashioned way of thinking and one of the reasons that over half of the Fortune 500 have either burned out or faded away in the past 15 years. As volatility and uncertainty across the business landscape have become the accepted norm, there’s no room for complacency and blind-spots in the top team.

The Human Resources Director is uniquely placed to understand where an individual executive, or the whole ExCo for that matter, may require additional support to help them achieve their goals faster.

With this in mind, Criticaleye polled a selection of HRDs on whether enough is being done to sharpen leadership skills among executives. The results show there is a gulf between how organisations are set up and what HRDs believe is required.

According to the results, 86 per cent identified a lack of leadership capability as a barrier to growth. Thirty-nine per cent said that their existing framework for reinforcing leadership skills is inadequate, while just over half (52 per cent) want to improve what is currently in place.

Matthew Blagg, CEO of Criticaleye, says “the figures clearly suggest that CEOs and leadership teams are not doing enough to ensure they have the right expertise in place for the future”.

Saying the “L” word
So, is there some kind of taboo around the question of leadership development for senior executives, including the CEO?

Orlagh Hunt, Group HR Director for Allied Irish Banks, Corporate Banking, Ireland, comments: “It is difficult to tell people they are not as good as they think they are, and also to get senior executives to focus on development.

“They should see life as a learning journey; no matter what your experience is you should always seek to learn and develop.”

A degree of openness or, to use a popular term at the moment, ‘curiosity’ is not always easy to find. Simon Laffin, Chairman of FlyBe Group, gives the example of trying to persuade a CEO to take on a mentor. “CEOs tend to have large egos…You are totally reliant on the CEO being open to having a mentor or not. I personally would encourage it but some don’t want it,” he says.

Yet our survey identified external mentoring and experiential learning as the most effective tools to support senior executives in performing at the highest level. These were followed by executive coaching, partnering with business schools and external courses.

Elements of a high-performing executive team
Organisations fixed on a hierarchical model are going to struggle in the current environment. An overly directive approach results in poor communication, inflexibility and an organisational culture where information and knowledge are withheld, rather than shared.

Such an environment won’t appeal to the best talent and everything seems to point to successful businesses adopting an agile model. According to the survey, the most important elements of a high-performing executive team include trust, constructive challenge and collaboration – all components of a flat hierarchy.

Another key element identified was a common purpose. Nicky Pattimore, HR Director at Equiniti, comments: “The leadership team has to be aligned with the purpose… we ran workshops with all the senior management team to ensure this. Consistency of messaging is critical and you have to have regular touchpoints with employees across the organisation.”

Difficulties arise when executives pursue their own agendas too aggressively. Indeed, the survey found that a lack of alignment over strategy is the primary reason for senior executives quitting.

Ian Cheshire, Chairman of Debenhams, suggests that the top team must genuinely agree where the future of the business lies. “Alignment comes when people have had the chance to work together and own the strategy. You can’t just hand them a to-do list,” he comments.

The HRD and CEO can create the right degree of openness and collaboration within the executive team, provided they’re willing to make the effort. “There will be moments as a HRD when you are standing alone,” says Orlagh. “All the pressure will be on you to tell the CEO about the issues within the business, largely because the other executives won’t raise it themselves.”

Ultimately, there can’t be any sacred cows or taboos in the executive team, especially when it relates to talent. “Some CEOs don’t find managing individuals within the team and the team dynamics that easy, [whereas other] leaders accept challenge as a natural part of a healthy team dynamic,” adds Orlagh.

“Even if you find it tough, as the HRD, it is important that you are willing and able to challenge. It is important that your relationship with the CEO is such that they know that you are doing it from a desire to enable their success, not from a point of ego.”

What are your thoughts on leadership development? If you have experiences and opinions that you’d like to share, please email marc@criticaleye.com

This article was inspired by Criticaleye’s recent HR Director and CEO Retreats
Find out more about our upcoming Asia Leadership Retreat or read more on Strengthening the Executive Team

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Questioning Digital Transformation

Forget legacy systems, many corporates are holding onto legacy revenue streams – meanwhile agile start-ups are nibbling away at their profits. The development of digital technology waits for no one, so CEOs and their teams need to instigate change.

The average life span of an S&P 500 company will decrease from 60 to less than 15 years by 2020 and, at the current churn rate, 75 per cent will be replaced by 2027. These stats echoed through the room during our recent Digital Retreat, held in association with Accenture Digital, where attendees gathered to discuss what digital means to them.

Capturing what was said at the event, here we highlight four questions that leaders should ask themselves when faced with digital transformation:

What problem are we trying to fix? 

Figure out what you want to do before you roll out new technology.
Arabel Bailey, Managing Director and Digital Lead for the UK & Ireland at Accenture, says you must start with the problem you’re trying to solve. “Traditional organisations are often organised around product lines rather than customer needs.

“Many understand the theory of digital and being more customer centric but don’t know how to execute it.”

Ashok Vaswani, CEO of Barclays UK, spoke of his company’s digital journey, which for a business established over 300 years ago has been a difficult undertaking. He believes that it’s all down to strategy and a focus on the customer: “Strategy is three questions: Where are we now? Where do we want to go? How are we going to get there?

“We set up two groups of 10 to 12 people to come up with the answers. One thing to come out of it was that every product we provide is a means to an end, rather than an end itself.”

Another key finding was that customers want speed and convenience. “We realised mobile was the way to go. We built a mobile app and launched it in July 2012,” Ashok explained. “Ninety-two per cent of all payments are now done on mobile, it’s an incredible force.”

Do we know what’s happening in other companies and sectors? 

It’s important to have antenna pointed to the outside world. This is particularly the case when agile start-ups are springing up all around you.

Narry Singh, Managing Director and Head of Digital Strategy for EALA at Accenture, who spent 20 years living and working in Silicon Valley before relocating to London in 2014, likened these start-ups to a thousand mice nibbling away at the profits of those too slow to brush them off.

Using a home improvement retailer as an example, he listed over 15 platforms − such as Pinterest, TaskRabbit and Houzz – that could disrupt its industry.

“The biggest risk to incumbents from start-ups is their speed, talent, capital and fresh brands,” Narry said. “Look at funding sources like Angelslist.com and see where the ‘smart’ money is going.”

As fintech companies rise seemingly from nothing, established businesses must place more focus on price and margin. Speaking about Barclays, Ashok explained: “For every £1 of revenue my expenses are 51p. For companies that are digitised it’s around 22p. There is a sense of urgency to move from 51p to 22p, it’s in our interest to drop prices before we are forced to.”

From 2013 to 2015, Barclays made a cost base saving of £600 million. However, Ashok said there’s still much more to do.

Are we prepared for new ways of working? 

Adapting to the challenges and opportunities new technology brings often requires major organisational change.

Bal Samra Commercial Director at the BBC and Managing Director of BBC Television, relayed his experience of leading projects such as BBC Online, the iPlayer and BBC Store. He advised leaders to challenge the traditional boundaries and skills within the organisation.

“We have combined roles at BBC Three – we’ve developed new ones by mixing up social media and content,” he said. “We set up an academy to reskill the organisation and also launched an apprentice scheme that allows us to tap into a completely new pool of people.”

Bal also endorsed the creation of incubated teams whose sole purpose is innovating with new technology. “Separate teams work for big change,” he said. “It can be hard to identify measures of success at the beginning. Support them and let people get on with it, but have a gated approach. If nothing happens in six months’ time, it needs to be looked at.”

How do we get everyone within the organisation to work together? 

Legacy systems and getting buy-in from the board were cited as two of the main obstacles. Andrew Minton, Managing Director at Criticaleye, said: “Digital transformation is a tough job for traditional organisations with long-established operating models and legacy technology infrastructures. Every organisation will be at a different stage when it comes to digital maturity, but it’s a task leaders can’t ignore.”

Whether it’s being spurred on by the chief digital officer, chief technology officer or the chief exec, they need to translate it into something the board can understand.

For Arabel, examples can bring ideas to life: “Build a prototype, get customer feedback and present it to the board. Do things in a small way and then think about how to scale it, rather than thinking about full blown digital transformation all at once.”

Yet it’s critical to stress the sense of urgency for change. “Forget legacy systems, we have legacy revenue streams and they are declining. We need to have the courage to say: ‘Let’s move ahead’,” Ashok explained. “I have to go to the board and say: ‘Let’s get rid of those legacy revenue streams.’ If I don’t, the business will disappear before our eyes.”

It’s not just about the board and leadership team, colleagues across the business need to be aligned. Ashok demonstrated the importance of this by revealing that when Barclays’ mobile app was first launched it didn’t get the pickup they’d anticipated – staff weren’t telling customers about it.

“We needed to get colleagues excited about it,” he said. “But how could we get them excited about it if they didn’t have wi-fi in branches? So, we put wi-fi and 10,000 iPads into branches. The board asked how this would make money; it wouldn’t but it was something we had to do.”

Getting the organisational mindset to shift is a difficult task, but it has to be done. Ashok concluded: “It’s always a heavier challenge at the beginning. It’s about saying: ‘Trust me’.

“Now, it’s about saying: ‘Look what we’ve done,’ and to continue beating that drum.”
By Dawn Murden, Editor, Advisory

What are your thoughts on digital transformation? If you have an opinion that you’d like to share, please email Dawn at dawn@criticaleye.com 

Read more from Bal Samra on leading breakthrough innovation

Find out more about our upcoming CEO Retreat, in association with Accenture Strategy.

 

Where do CEOs Turn for Help?

Fractious board dynamics, disgruntled shareholders and poor performance will put enormous pressure on a CEO, especially if they’re new to the role. While solutions may not be easy to come by, it can be difficult for a leader to openly admit they don’t have the answers. That’s where a mentor can make a big difference.

A mentor can be particularly useful when starting a new role, says Matthew Wright, CEO of utility company Southern Water: “The value of a mentor is that you can draw on their experience in times of change. You might be entering a dysfunctional team, or the board might not be as supportive as you thought it would be.

“There are myriad issues that you can’t anticipate until you’re in the role. By speaking to someone who has been there, you can prepare yourself for what’s to come.”

Tom Taylor, and former Chief Executive of the Agriculture and Horticulture Development Board, says: “My mentor got me to realise that as a new CEO, it was not my job to solve every problem as I had first thought.

“She got me to understand there’s a huge difference between leadership and management, which I think is one of the most common issues facing a first-time CEO. You can manage a team but you need to lead an organisation.”

Lonely at the top

Tony Cowling, Criticaleye Board Mentor and former CEO and Chairman of market research company TNS, agrees that mentoring helps new CEOs develop essential skills for the role. “Chief executives are often anxious when they’re new because there’s nearly always a part of the business they know little, or less, about,” he says.

He explains that one of his mentees soon realised they required a wider skillset for the role: “They’d come up through finance… suddenly they were CEO and had responsibility for the company’s marketing, sales and online presence. They thought: ‘The company needs to change in these areas, so I need someone with experience that’s different to mine.’”

While some mentees have come to Tony for his specific expertise, which in his case includes marketing and international expansion, he says much of it is about having the freedom to speak openly to someone, which often you can’t do within the company.

Agreeing with this sentiment, Julia Robertson, Group CEO of outsourced HR services provider Impellam, explains: “I worked with a mentor when I was first promoted from Divisional to Group CEO. The job is lonely. You’re unsure of what you don’t know until you’re there, and sometimes you won’t want to explore that with your chairman.”

It’s for similar reasons that Tom’s chairman recommended he took a mentor: “She realised there was benefit in the independence of a mentor, recognising there is always a line management relationship between a CEO and chair.”

Tony illustrates the issue of relying solely on boardroom support when he describes helping two CEO mentees through difficult relationships with their chairmen. One, who was a first-time CEO, had to manage the chairman off the team. “We discussed it in his very first meeting and he came to the conclusion that he had to do something. He feels much more confident having resolved the issue.”

It’s something that cuts both ways. Sir Michael Lyons, Criticaleye Board Mentor and Chairman of the English Cities Fund and former Chairman of the BBC Trust, who has acted as a mentor both formally and in his role chairing a company, says: “It’s quite possible for a good chairman to provide challenging support to their CEO, but there are inevitably performance judgements to make and it’s critical that the chairman does not get so close to the CEO that they’re unable to identify a failure or act upon it.

“The mentoring role is quite separate. It gives the mentee a chance to explore things that could be difficult to discuss with immediate colleagues, or board members.”

Mentoring in action  

While mentoring can provide considerable support in managing these relationships, its benefits extend beyond the boardroom to cover other issues including shareholder expectations, performance, remuneration or change management.

Penny Hamer, Criticaleye Board Mentor and former Group Human Resources Director of telecommunications company Energis, explains how she has provided mentoring through the restructure of an executive team and encouraged a female MD to put herself forward as Group CEO. “Her appointment has been a great success,” she adds.

The issues will vary with each CEO, which is why the mentoring relationship should follow a pathway defined by the mentee.

“This is not a place for blueprints,” says Michael. “In some meetings people might want to discuss the challenges immediately in front of them, on other occasions they might want to look further forward, or may even discuss something completely outside their working life. Addressing the whole person is very important but doing that in a way that doesn’t feel artificial or pre-programmed is key.”

Highlighting the different approaches, Tom describes how his mentor shadowed him through a variety of meetings: “She pointed out how much I adjust my behaviour to different settings without realising it. ‘There is more than one Tom Taylor,’ was her phrase. I was doing this unconsciously but once I realised that I could develop this approach as a tool, it made me a better CEO.”

Another pivotal aspect is the relationship dynamic. “Finding the right match between mentor and mentee is essential,” says Tom Beedham, Director of Programme Management at Criticaleye. “There needs to be the right chemistry and respect so that conversations can be open. Also, mentoring sessions need to be prioritised during what is inevitably a busy time for a new CEO.”

Mentoring relationships should evolve with the mentee’s needs and it’s important to be fluid. For this reason, a mentee should not be reticent to move on, indeed their mentor will have benefited too.

What does the mentor gain? Penny explains: “Exposure to different business sectors, which helps keep me up-to-date with current business challenges. Plus there’s the buzz of seeing someone develop in a challenging role.”

By Mary-Anne Baldwin, Editor – Corporate

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