Managing Your Long-Term Relationships

Having a board that you’re comfortable with and like spending time with gives you a chance to detach from the day-to-day of the business a little bit while you think about the business more broadly. In doing this, you want to create a relationship with each individual board member as well as a cohesion between the board members themselves.

Transcript

Having a board that you’re comfortable with, that you like spending time with gives you a chance to detach from the day-to-day of the business a little bit while you think about the business more broadly. You work on the business rather than in the business, and that can be a real satisfying and energizing part of the experience of building the business, and the board can really help you with that. It’s useful to think of the board not as one generic thing, but as individual board members. As a CEO or entrepreneur, you want to have this one-on-one relationship with each board member, but you also want to create a relationship between board members, and as a result allow there to be some cohesiveness in the dynamics between everyone on the board. That requires a lot of work. It requires the same kind of work that you put into your leadership team. Understanding what strengths and weaknesses are, articulating what you want different people to do in different roles, is a key part of this. The other, and we talked a lot about expectation settings earlier, is recognizing that your board members are going to behave in different ways when asked to do specific things for the company. Each one of them has their own characteristics and their own way of relating to whatever is going on. Some board members are going to be very, very good at performing the task that’s been asked of them. Other board members are going to run very open loop, and it might be unclear whether they’re actually getting done what was asked. And some board members are going to do way more than whatever your expectation was based on their own personality and the way they do things.

One of the situations where the relationship between the CEO and the board goes off the rails is the case where the CEO loses the confidence of his management team. Most boards have a relationship with more than just the CEO. And when board members start hearing from members of the management team that they don’t have confidence in the CEO, that often starts to create challenges which oftentimes results in the CEO being replaced. Now it’s important for a CEO to realize that the solution to that is not to manage the communication between the members of the management team and the board. In fact, that’s very counterproductive. If the members of the management team don’t feel like they can communicate with the board members, and if there isn’t clear rules of engagement for that communication, a CEO can often find himself blindsided by essentially a rebelling of the management team through the board.

As a CEO, you’re setting expectations, you’re either going to exceed them, meet them, or come short of them. And that’s going to happen across lots of dimensions of the business. That’s okay. But if you either deny reality or don’t communicate about what’s happening, that’s a problem. If you say you’re going to do X, and then you do Y, and you don’t explain the reason you did Y instead of X, that starts to build over time. If you see a recurring pattern of that as a board member, I start to lose trust in you as a CEO. The other dynamic that happens that’s very similar is a situation where the information that is coming from the CEO to the board is highly curated, and not reflective of what’s going on in the business. Some CEOs think that they can control that especially as companies get bigger. It’s much easier as a CEO to not try to control that, to let the board have access to that information, to let the board have the transparency and exposure that they want, so that you’re actually dealing with substantive issues versus the situation where you wake up one day and the board thinks the company is looking like X and you think company is looking like Y. When there’s a gap between those two, that often also creates huge conflict for the CEO. My advice to CEOs is whenever they find themselves in an uncomfortable position, or ambiguous position, is just own it, and communicate it. Don’t try to figure out what the blame is. Don’t get stuck in the cycle of self-justification. Just put it on the table, air it out, talk about it, and move through it. Don’t just bring the problem, but also bring suggestions for solutions. And present your suggestions not as absolutes, but as hypotheses or ideas. Your board members will almost always want to work with you to improve the situation.

Suggested Readings

Founders School || Startup Boards || Managing Your Long-Term Relationships || Impact Guide (PDF).

Feld, Brad and Mahendra Ramsinghani. 2013. Startup Boards: Getting the Most Out of Your Board of Directors. New Jersey: John Wiley and Sons Inc. Chapter 11 “Managing Ongoing Expectations”.

Feld, Brad and Mahendra Ramsinghani. 2013. Startup Boards: Getting the Most Out of Your Board of Directors. New Jersey: John Wiley and Sons Inc. Chapter 13 “Communication Conflicts”.

David Cohen. “Board Conflict Is Normal.” WSJ Accelerators. Blog column, April 4, 2014.

Questions for You

Do I have a relationship with each individual board member? Which relationships can I improve?

Have I created cohesion amongst the board members? How can I foster this?

Have I set expectations and responsibilities for each board member and their role?

How do I manage the relationship between team members and board members? Can this be improved?

Do I make it clear to board members why I’m making the decisions I’m making, despite whether it conflicts with their given advice?

Am I transparent with the board about what’s going on with the company?

Questions for Your Team

Do I feel comfortable speaking to board members?

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