When board composition is lopsided the company suffers. Too many financial folks looking exclusively at the numbers will overlook the business issues and other important aspects of corporate strategy. Too many sales-focused voices, and the operational aspects of the business will be overlooked in the quest for bookings. Too many engineers or closet techies, and the product direction becomes dominant. A board needs balance and it should complement the strengths of the management team.
In addition to balance among the various business disciplines (sales, engineering, finance, etc.), the board needs balance in problem solving and thinking styles. In 1981 Ned Herrmann, founder of Herrmann International and originator of Whole Brain® Thinking wrote pioneering research on thinking styles http://www.herrmannsolutions.com/about/ Herrmann studied how thinking styles influence leadership and decision making, and his work has evolved into a methodology for understanding how individuals react to situations and how they are likely to interact in groups.
There are several different personality profile frameworks in business literature, but the Herrmann approach is one that I find uncanny in its ability to discern an individual’s thinking style. What is interesting about its approach is the idea that balanced thinking includes four styles: Analytical, Experimental, Practical, and Relational. When presented with a challenge, each style contributes to arriving at a well-reasoned and effective response. Most individuals are dominant in one style or another, so a team needs a balance of thinking styles. Picture a balanced team or group working together: Somebody throws out a creative idea (experimental), somebody else starts running the numbers (analytical), another person steps back and asks if the idea makes sense or is doable (practical), and somebody else asks how it will impact the team or the staff (relational). All aspects of the problem are evaluated and considered, and a balanced decision emerges.
Applying these concepts to board composition, imagine a board comprised exclusively of Analytical thinkers – number crunchers. There is very little creative problem solving in that group. How can they be effective in helping management to guide the company? If management is the creative type, this picture results in a board / management relationship that is rife with challenge and potential conflict. Or, turn it around, suppose the board is dominated by experimenters, constantly throwing out ideas for changes to direction and strategy. If management is the analytical or practical side of the equation and they are constantly rejecting the board’s ideas, once again we have a conflict situation.
These conflicts are not all bad, and sometimes can result in useful checks, but imagine a more balanced composition where board and management participants have a range of thinking styles. If they are coached on how to draw the best out of each other, then each challenge will be evaluated from all sides in a cooperative manner. Better decisions will get made, and there is ultimately more alignment and support behind the outcome – more teamwork.
But who creates a board based on personality tests? Nuts, isn’t it? Not entirely. Board composition is frequently dictated by circumstances – who owns the largest share of the business, or who has the best industry expertise. The first step is to know what you are working with. If you know that a certain individual is dominantly analytical, then you can be prepared and know how best to work with them. Consider asking each member to take the simple Herrmann questionnaire so you can construct a board thinking style profile. It isn’t painful (just a simple questionnaire), and the results are typically very informative. Knowing each others profile is illuminating about how to most effectively work together. You learn to rely upon individuals for their style of input, and not look to them for input along an axis where they simply don’t excel. Knowing and sharing the profile of the entire board will improve interactions, and it will highlight where the board is missing a perspective and needs to compensate or add talent.
The next step is to screen new candidates by viewing them through a broader lens than just industry knowledge or market prestige. If you want to build an effective board/management team, then you need to think about personality and thinking style as key elements of success. We have all been in situations where we are thrust into working with a person that has the requisite knowledge, but is simply a jerk to work with. It never goes well. The same thing occurs when the jerk is a member of the board, but in this situation, the whole business is likely to suffer. Screening new board members for thinking style and fit is not such a far-fetched idea, and one that will result in much more productive and effective results.
