Widening gaps between board rhetoric about change and corporate reality are not inevitable and can be closed according to Prof. Colin Coulson-Thomas. Speaking in Mumbai, India at the World Congress on Total Quality he outlined an approach to achieving multiple objectives that has generated huge returns on investment for early adopters.
Coulson-Thomas acknowledged that gaps between aspiration and achievement are not new, and that in many walks of life there is a gap between promise and performance: “Poor performance is sometimes tolerated and often concealed. Graphs and charts invariably show progress, even though we know actual standards are falling.”
According to the Professor “We live in an age of sound bites and spin. Many people rationalise failure – it is always someone else’s fault, or it is due to external factors. People rarely stand up and say they were stupid and took dumb decisions.”
Coulson-Thomas’ investigations suggest “Failure also has its vested interests. Many managers would be out of work if they did not have problems to solve. Consultants can earn a fortune from struggling change and transformation programmes. All that many of these initiatives transform is their bank balances.”
The Professor finds “Some complex and costly programmes keep large teams of executives and consultants busy for many month, and even years. Even if they deliver, in the meantime the world may have changed and something else might be required.”
Coulson-Thomas has himself been the process vision holder of successful transformation programmes, and since becoming the world’s first professor of corporate transformation has examined many ways of boosting performance. His research looks at ways of capturing and sharing what high performers do differently and has identified cost effective ways of quickly achieving multiple objectives.
His research also reveals that “One cannot assume directors are competent or that boards are effective. Many people do not think through the consequences of their decisions, and better and more cost-effective options are often overlooked. Corporate governance rhetoric has raised expectations, while performance is often unchanged.”
“Although corporate governance codes of practice have spread like a pandemic around the world and experts, consultants, commentators and advisors on corporate governance abound, ” Coulson-Thomas points out “in this era of corporate governance we have seen the biggest ever failure of corporate governance – a catastrophic failure that has threatened to bring developed countries to their knees.”
Congress delegates were told they should not be surprised “Groupthink, following the herd, keeping in with others, agreeing with the last speaker, wanting to be seen as a team player, and being deferential are deeply ingrained human characteristics.”
The Professor’s research and work with boards suggests performance depends upon behaviour – upon what boards do, rather than upon how they are structured: “One can tick all the right boxes, and comply with governance codes, and still take stupid business decisions. Directors can insist board assurance frameworks are updated, and yet fail to challenge colleagues or ask questions when they do not understand.”
So how do we close the gap between promise and performance? Coulson-Thomas suggested “One could start by promising less, but many people - especially those eager to please - like to promise more. Luckily increasing performance is now a real prospect. New ways of building, capturing and sharing what high performers do differently can enable others to emulate their achievements.”
The Professor finds “it is now possible to simultaneously speed up responses, boost performance, increase understanding, make it easy for people to do difficult jobs, free people from dependency upon particular locations, support mobile activities, relocation and outsourcing, reduce stress, avoid risks, enable bespoke responses, cut compliance costs, and deliver quick paybacks and large returns on investment.”
Coulson-Thomas pointed out “The wisdom of crowds does not apply to lemmings. It sometimes takes a brave person to stand against the crowd. Yet expenditures on costly multi-year change programmes should be challenged when quicker, cheaper and more flexible alternatives exist. This is why good independent directors are so important – honest, secure people who question and instinctively do the right thing.
The 21st World Congress on Total Quality was organised by the Indian Institute of Directors in association with the World Council for Corporate Governance and held at the Hotel Leela Kempinski in Mumbai. Its theme was 360 degree transformations through innovation, transparency, engagement, accountability and responsibility.
Dr. Colin Coulson-Thomas, an experienced consultant, Adaptation board chairman and academic at the University of Greenwich, has helped over 100 boards to improve director, board and corporate performance, and spoken at over 200 national and international events in 40 countries. His books “Developing Directors” on building better boards and “Winning Companies; Winning People” are available from Policy Publications.