Tag Archive: asking questions

Problem-Finding: A Vital Board Skill

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Solange Charas is the president of Charas Consulting, Inc. and a senior-level human capital professional with 20-plus years of experience as corporate CHRO and consulting firm practice director. She is currently pursuing her doctor of management at Case Western Reserve. She has served as the chair of the remuneration committee for a NASDAQ-traded company.

Michael Roberto, author of Know What You Don’t Know: How Great Leaders Prevent Problems Before They Happen, shared his insights with the 200 directors who attended last week’s NACD Directorship Forum in NYC. He explained why it makes more sense to concentrate on “problem- finding” than “problem-solving.” Practicing problem-finding helps leaders spot and address emerging concerns while they are still manageable and before they turn into disasters. It is a vital board skill.

Roberto opened his talk with examples from the Cuban Missile Crisis and recounted his conversations with Robert McNamara about that perilous time. He also gave examples from the 2003 NASA shuttle failure from his interviews with then Space Shuttle program manager, Linda Ham. Using these two examples he illustrated the fundamental value of actively seeking out problems before they find you.

I think his presentation had the attention of the audience—there was something seductively compelling about the idea of using proactive techniques to anticipate and avoid dangerous problems. Yet, despite our intellectual agreement that being proactive is always more effective than being inactive or reactive, what’s the trick? How do we set about successful problem-finding?

Roberto offered these seven steps to becoming a proactive problem-finder instead of a reactive problem-solver:

  1. Circumvent the gatekeepers – get unfiltered information.
  2. Become an ethnographer – watch what your constituents are doing and stay alert to what’s happening in the periphery. Watch for “Hirschman’s exit” or “voice” phenomena;
  3. Hunt for patterns – try to draw on past experiences but don’t get caught in the trap of misusing analogies.
  4. Use intuition to “connect the dots;” lessons learned from small problems can contribute to understanding the path of large problems.
  5. Encourage innovative thinking and risk-taking on a small scale – piloting programs and experimenting may be the key to learning. “Fail often, succeed sooner.”
  6. “Watch the film” – what is your team and the competition doing? “Adopt the military’s “After Action Review” (AAR) process to learn and improve;
  7. Create a climate of information-sharing – encourage people to speak up and have a mindset of “openness.”

In my opinion, our shareholders and stakeholders expect us board members to do our best to steward the organization. To do that, we need to listen to our inner dialogue to understand what can inhibit our participation in important activities. What can cause us to abdicate our leadership role? Is it fear that we may be viewed as pariahs and shunned if we voice a dissenting opinion?  Do we feel safer if we ignore an issue? Like the Ravenous Bugblatter Beast of Traal in Douglas Adams’s Hitchhiker’s Guide to the Galaxy, do we believe that if we can’t see the problem, then it can’t see us? Or do we assume that someone else will tell us about the problem when it get big enough? All perilous pitfalls—which might be avoided by practicing problem-finding.

Read more about the NACD Directorship Forum here and here.

To reserve your seat for the NACD D100 Forum, November 8-9 at the Waldorf Astoria, NYC. Sign up to learn from Jet Blue director General (rtd) Stanley McChrystal, Polymer Group CEO Ronee Hagen and HealthSouth CEO Jay Grinney among others, and be our guest at the gala dinner celebrating the NACD D100 and Director of the Year honorees.

It’s the “Dumb Questions” That Can Save The Company

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Karen Kane provides CEOs and boards with strategic counsel in developing effective shareholder engagement programs, board agendas, board assessments and more effective board meetings. A former board secretary and former highest-ranking woman of the Federal Reserve Bank of Chicago, she attended NACD’s Director Professionalism course in Houston, TX, in early May.

It’s the Dumb Questions That Can Save the Company

Wayne Shaw encourages directors to ask “dumb questions” when it comes to reviewing the financials of any company. The Helmut Sohmen Distinguished Professor of Corporate Governance at Southern Methodist University notes that it is sometimes the question that wasn’t asked that gives directors insight into assessing the integrity of the firm’s financials. His presentation was part of NACD’s Director Professionalism® course in Houston, May 4-6.

Rather than getting caught up in the minutia, directors should ask management, “Are we on track to meet our financial goals and if not, what is the company doing about it?” He encourages directors to ask the CFO if the CFO is comfortable with the financial demands of the CEO, and to ask, “Is there pressure to make the numbers?”

Directors should ask internal auditors if they have any concerns with accounting or reporting issues. In following up with the external auditors, directors should ask how the company differs from others in the industry? What weaknesses did they find? How aggressive is the company’s accounting policies relative to the competition? And, is management responsive to the issues they raise?

Shaw cited chapter and verse of well known companies whose directors didn’t ask the basic questions. Asking some obvious questions would have saved millions of dollars of shareholders’ investments and sometimes the company itself.

See dates and locations for upcoming Director Professionalism courses.