February 28, 2021
By Stuart R. Levine
As board members of private companies, now is the time to digest the disruption and pain caused by the global pandemic—to gain perspective, understand the implications for your business, continue to grow, and move forward on the right strategic path. Understanding the reality of the moment and its implications for customers, employees, the community, and their investors is essential. Critical thinking for recognizing and defining opportunities and achieving outstanding performance will be centered around effective board leadership, internal leadership, investments in technology, employee engagement and well-being, innovation, and cybersecurity programs. Ensure that you are focused in a disciplined way on a cultural reset based on data.
This thinking begins with an independent assessment of the board as well as new data collected from customers and employees to gain immediate insights into the future. Boards must insist that new strategies are developed from current customer expectations as well as employees who can ensure excellent outcomes.
This is a defining moment for boards and management to begin the journey to achieve results in this newly defined world. Board members are privileged to be the stewards of capital, strategy, and the future of the organizations they serve. Your response and tone will help establish the standards throughout the organization.
Data collection from customers and employees will serve as the foundation for effective strategic planning and oversight. Research on risk oversight, conducted by Protiviti and North Carolina State University in their global study released in early 2021, include these top four risks for 2021:
“Our study not only frames a business environment beset by pandemic uncertainties and a struggling economy, but it also points to digital transformation and acceleration,” says Joseph A. Tarantino, president and CEO of Protiviti. “Staying close to the customer through reliable market data and analytics has never been more important in terms of making quality strategic decisions.” Directors need to make sure their CEO and management team are considering these top risks and that they are reflected in the CEO’s dashboard that creates the basis for strategic conversations and accountability with the board.
Directors must take the time to ensure a productive path forward based on the reassertion of values, trust, and respect. There are terrible consequences now for bad strategic decisions that lack a foundation in values. Each individual has the capacity, especially during Covid, to infect an entire company both physically and emotionally. This is the time to seriously review management’s actions that will have long-term consequences on retention, recruitment, and profitability. For example, the development of standard wellness programs designed in a silo by human resources will no longer meet the requirements of an enterprise risk review.
In addition, the time is now for honest discussions about diversity in the organization and on the board. A perfect example of the power of diversity on innovation is the discovery of the Pfizer vaccine. Two German scientists, Dr. Ugur Sahin and Dr. Ozlem Tureci, a husband-and-wife team who founded BioNTech, used their messenger RNA technology to rapidly develop the first vaccine in months rather than years. They cared about principles and science over business. They were so busy developing a vaccine that was 90 percent effective at prevention that the details of their financial partnership with Pfizer in their Lightspeed Project remained incomplete. Trust and personal relationships were key to them. Their diverse team was composed of scientists from 60 nationalities, half of whom were women.
The definition of an independent director has never been more important as we all face unrelenting pressure to adapt to a new world. This responsibility now will require leadership skills at the board level. As an example, strategically leading a discussion on the investment in technology could become the difference for the long-term resilience of the organization. Attracting new members to your board that have the vision and experience in this area will be critical. These conversations cannot be grounded in fear but need to be based on clear thinking and metrics. This process must be effectively managed with care. The decisions for the deployment of capital are extremely sensitive in this environment, but if they are positioned properly, the opportunities will become apparent.
This process needs to be based upon character and data. Character is needed to be able to challenge the norm and avoid being consumed in a cloud of uncertainty. Collecting the right data is key. In one of my leadership experiences in management, I shifted the focus from traditional marketing, running tombstone ads in prestigious publications, to building a database to strengthen our relationships with our customer base. This data was then pushed up against a strategic planning process to redefine the future development of products and services desired by customers. And forget about the big terms like AI. Just start to see how you can collect data, move faster, and become better through data and technology. Your focus must be on digital transformation that impacts customer loyalty, revenue, and profitability.
Boards may have another big challenge: new strategies must be driven by the right CEO. This may involve an in-depth discussion of succession planning. The right CEO may no longer be a family member. This sensitive issue can be challenging and difficult. Board members must begin this process with the creation of a future state or vision for the company. The next steps are to discuss how to achieve these goals and objectives through the leadership of the company. What evolves is a definition of leadership criteria that aligns with the future aspirations desired. If this is done for the right business reasons, with the right tone, it can accomplish the right things for the company. Very often, the hiring of an outside independent firm for assistance helps bring the right issues to the table to ensure the trajectory of the company is sustainable and resilient.
We all have choices to make. We can choose to sit in front of the television and hear repetitive negativity. Or we can listen to music, find things that inspire us, and strive to become better each day, continuing to learn and renew our spirits. Directors need to think about the future and the impact you as a board member can have on your organization’s culture and strategies.
As Peter Drucker once said, “Culture eats strategy for breakfast.” So, make sure your culture will enable you to innovate and move forward effectively. Engaging all people and delivering a high-quality personalized customer experience will ensure your organization a competitive advantage. You also need to have a little fun. Lift yourself up, FaceTime your children and grandchildren, find ways to enjoy your life. Don’t take no for an answer through responsive and reflective leadership. The future is in your hands. Make it count.
Stuart R. Levine has served in leadership positions at 15 private and public boards, including The American College of Physicians Foundation, Broadridge Financial Solutions, D’Addario & Co., Dale Carnegie & Associates, European American Bank, Gentiva Health Services, Northwell Health System, Olsten Corp., and WLIW-Channel 21 (PBS), He has authored three books including The Leader In You: The Six Fundamentals of Success and Cut to the Chase.