By Roger Hitchcock
When we don’t feel well, we go to see a doctor so that he or she can assess our symptoms, make a diagnosis and provide treatment so that we can get better as soon as possible. We choose the most suitable doctor based on our symptoms – we do not go to a dentist if we think that we have pneumonia.
The same approach should be applied in business.
When all is not going well within a business, people often assume that things will eventually fix themselves. The truth is that, as with our health, business health needs to be looked at to assess symptoms, make a diagnosis and provide treatment as soon as possible.
Doing this from the boardroom utilises a robust board evaluation or diagnostic that is conducted by a knowledgeable and experienced partner who can provide objective input based on qualitative and quantitative findings.
Ross Ashby’s law of requisite variety states: When the variety or complexity of the environment exceeds the capacity of a system (natural or artificial), the environment will dominate and ultimately destroy that system.
In the business world, we see companies as multi-faceted systems with constantly evolving levels of complexity. This is then compounded by operating within (often ever-changing) parameters – whether operational, governance, legislative or compliance.
Add to that numerous variables, and you can see how if something goes wrong or is structured incorrectly, a number of different symptoms can emerge, impacted mainly by people and systems.
Issues with relationships and personal dynamics in the workplace can lead to inefficiency. System issues are often more far-reaching by impacting results negatively and leaving people unsure of what to do, leading – once again –to a lack of both effectiveness and efficiency.
One of the ultimate key measures is the company’s bottom-line figures: Is money facilitating the performance of the business by enabling what it needs, and is the business healthy and profitable?
At the end of the day, in order for a company to operate, it needs the right people acting on the right information, and doing the right things with the right systems at the right time.
Getting a Meaningful Diagnosis Amidst All the Complexity
A board is responsible for ensuring that the business delivers effectively on its purpose while at the same time taking into account the impact on and influence of all stakeholders – one of the key stakeholders being shareholders, with their own expectations, needs and interests.
Measuring how well a board is performing from a range of different perspectives – and gaining insight into what specifically it needs to improve – requires a thorough, well-designed board evaluation or board performance diagnostic, best conducted by an external objective party.
As mentioned before, it is also best done by combining qualitative and quantitative insights of the board as a whole as well as of individual directors, to get a holistic and balanced view.
A meaningful diagnosis would consider assessing:
- The people around the boardroom and in the business
- The process followed to get the right information to the right people at the right time
- Existing skills and capabilities, and how these support the activities that need to be done
- The rhythm/cadence of the business – at both a board and management level
If you are experiencing any of the symptoms in this article, you need to diagnose the real reason behind it.
Rather than just providing a snapshot of symptoms and diagnosis, Sirdar’s board evaluations and diagnostics provides a treatment plan in the form of a 12- to 18-month roadmap with actionable next steps to make the journey to the next summit that much easier. Find out more here.