Boards, micromanagement and failure

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5 August, 2009

‘I think people who fail, fail because they’re not involved enough’. So said Sir Martin Sorrel of communications group WPP last month when discussing micromanagement.

It’s an interesting dichotomy isn’t it? On the one hand many would argue (executives mainly) that boards spend too much time on detail and not enough time on strategy; whilst on the other hand, failure often results from not attending to the detail.

But why do boards focus too much on detail? Well, one common reason is because it’s presented to them by executives in long papers full of the stuff sometimes, but not always, at the request of non-executives. As a non-executive I once had a paper presented that was 17 sides of A4 on the basis the author thought the board needed to understand the history of the issue. We didn’t, I lost the will to live and for the life of me I can’t remember what we decided.

But this isn’t why failure occurs. It occurs when boards neither sufficiently understand what detail is important to them nor its implications. Enter our old friends analysis and judgement, which if I could bottle I’d sell to, among others, the banking industry.

But of course not all bankers are bad. A few years ago I was observing a board in action when a paper was presented proposing to improve efficiency and save revenue by centralising beds and closing some wards. All very sensible but the paper contained no numbers whatsoever.

I wanted to chip in and say, ‘You’re not going to make a decision on the basis of this paper surely’ but then I remembered the consultant maxim that the client is always right. In any case a non-executive got there before me saying he couldn’t assess the merits of the proposal because the arguments were not quantified. He asked - quite rightly - for the proposal to be re-presented to the board with numbers added. The non-executive was a banker.

Readers' comments (6)

Anonymous | 7-Aug-2009 1:17 pm
This really doesn't get at the nitty-gritty of effective boarding, despite acadeimic and consultancy badges.

You can spend shed loads of time on detail and you can spend shed loads of time on strategy. Both can result in decisions that are poor and almost all boards are disconnected form the work and rarely make good decisions.

The question is, how do you know what is crossing your board table, and that the managers give actually matters or makes a difference. The short answer is the majority of boards don't.

Most boards are disconnected from what matters of what counts and their effectively get in the way of improving matters. You have to know that the measures you see relate to the important things and also really understand a problem to make a decision about it.

This world is beyond many boardrooms where decisions are made by little coteries or cliques, with managers and sometimes against. Managing by the numbers just doesn't work
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Neil Goodwin | 7-Aug-2009 4:30 pm
I understand the point 'anonymous' above is making. Of course it's down to the people round the board table and the way they work internally and externally, the information they choose to look at and the way it's presented to them. I've said before that boards are a bit like democracy: it's the best model we have, in this case for running organisations, until a better one comes along.
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Anonymous | 7-Aug-2009 6:10 pm
You'll find that the reason a load of un-necessary detail is presented is that it is endemic in the NHS to put in everything you can possibly think of (Just have a look at any of the 'balanced' scorecards, or helpful toolkits). You then have a mass of more junior managers, scrutiny committees, EMT. PEC, stakeholder panels, equality impact assessments, risk assessments and the like, for the paper to go through before it reaches the board. Each of these can reject the paper, but none can approve.
By the time it reaches the board, it has probably been re-drafted ten times or more, is about four times as long as it was to begin with, and has been 6 months getting there.
Couple this with the PCTs paranoid fear of receiving a 'challenge', and before long the 'safe' decision is to avoid making the decision at all. And you can be certain, that with all that detail, they'll be some excuse for deferrment to the next meeting.
It has nothing to do with the non-execs.
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Anonymous | 11-Aug-2009 12:56 pm
This is a different 'anonymous'

As a lifetime NHS bureaucrat its always been very clear to me that my career depends on producing product that my Cheif Executive and Board (in that order) find useful. Every Board I've ever worked to whinges about there being too much detail in reports. However, contrary to the opinions above, it has everything to do with Non-Execs. In my experience, whilst the Board might collectively state they want brief strategically focussed papers, there are always some Board members, often non-Execs who then go looking for the detail and complain when its absent. In truth, for some Board members this is the level at which they are comfortable. This creates a lowest common denominator mentality in which one chucks everything into the paper anticipating what points of detail might be raised by a minority of Board members. Until Boards members individual behaviour is consistent with the Board's collective request for non-detail strategic papers so it will remain.

So Neil, next time you're on a Board, tell your fellow members to stop whinging and do something about it. Since paper writers in the organisation actually do want to deliver what the Board wants, it should not be hard. It will just require some consistent Board behaviour. Frankly, if a Board can't get papers to it written they way it wants, what hope is there on delivering the really difficult part of its agenda?
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Anonymous | 11-Aug-2009 12:56 pm
This is a different 'anonymous'

As a lifetime NHS bureaucrat its always been very clear to me that my career depends on producing product that my Cheif Executive and Board (in that order) find useful. Every Board I've ever worked to whinges about there being too much detail in reports. However, contrary to the opinions above, it has everything to do with Non-Execs. In my experience, whilst the Board might collectively state they want brief strategically focussed papers, there are always some Board members, often non-Execs who then go looking for the detail and complain when its absent. In truth, for some Board members this is the level at which they are comfortable. This creates a lowest common denominator mentality in which one chucks everything into the paper anticipating what points of detail might be raised by a minority of Board members. Until Boards members individual behaviour is consistent with the Board's collective request for non-detail strategic papers so it will remain.

So Neil, next time you're on a Board, tell your fellow members to stop whinging and do something about it. Since paper writers in the organisation actually do want to deliver what the Board wants, it should not be hard. It will just require some consistent Board behaviour. Frankly, if a Board can't get papers to it written they way it wants, what hope is there on delivering the really difficult part of its agenda?
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Anonymous | 12-Aug-2009 10:18 am
It is no surprise that lots of people on here are posting 'anonymously'

In environments free of fear, personal points of view and professional points of view would be able to be expressed.

We don't live in that world. We live in a top-down, target-driven world where whistleblowers get sacked and only the centre knows best.

Perhaps this is also an obstacle to good governance? But if this is the case, it is a problem created by how we think about management and the world of regulation that we have created.
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