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Introduction
Managing multiple boards across diverse industries is a challenge that not everyone is equipped to handle. And this difficulty doesn’t only come from issues related to governing those specific boards. There are also multiple hurdles in the orchestration of those groups for the sake of bettering the company.
Gregory K. Jones is a seasoned Senior Partner and Co-founder of Edgewater Private Equity Funds. He has led the Chicago-based company from its establishment. His impressive track record in business includes founding and helming UBid.com as CEO and Chairman of the Board. He has guided UBid.com to remarkable success, including approximately $500 million in revenue and a high-value initial public offering (IPO).
This article covers his central strategy for success in these arenas. That strategy is to build synergy. Synergy is critical for businesses in all industries because it ensures that pooling resources for an aligned cause generates exponentially greater outcomes than the mere collection of those resources could bring about on their own. Building synergy when it comes to managing multiple boards is about how to do so across complex groups of stakeholders to drive aligned, high-performing results.
The Complexity and Power of A Diverse Portfolio
Just as a sophisticated machine is made up of parts that move in different ways and serve different functions, portfolios are at their strongest when they are diverse. Most financial specialists know and understand this principle. This is why you will rarely see anyone being advised to put all of their resources into a single investment. If that investment fails or even underperforms, the investor risks losing all their funds and experiencing grave financial upheaval. Strong portfolios consist of a mix of different industries, business development stages, geographic areas, founders, and board compositions.
The unique challenge is that each board will have its own specific pace of movement, culture of operations, and strategic pressure from the market. Hence, the reason boards need to be aligned. Aligned boards lead to clear, assertive decision-making, which encourages stronger execution of those decisions and increases the confidence of investors.
An Exemplary Approach to Board Leadership
With a savvy approach to board leadership, any board can become a formidable source of support and direction for any enterprise.
Clarity of Roles and Expectations
Each board member needs to have a distinct job. When people come together with a central goal in mind, that’s only half the battle. Each member of that group needs to understand precisely how they fit into the strategy for meeting said goals. By clearly describing what a board member’s specific role is, you take care of three concerns.
First, there are no members who are on the board without any kind of direction. Your board doesn’t need people to take up space. Each seat on your board is a precious resource and should be handled as such. Your boards need people with a track record of getting things done to lead the company to greater heights.
Second, no two board members are wasting time and resources by completing the exact same tasks. Everyone’s expertise is used to a high level of efficiency. Since synergy is all about the whole being greater than the sum of its parts, that makes it necessary that there are no redundant parts.
Third, should there be personnel changes, what kind of new board member needs to be brought into the fold is obvious. This makes recruitment faster and easier. It also helps avoid biases and habits that can result in someone being brought onto the board simply based on their proximity to the project or someone else they know being on the board, and not because they can effectively contribute to the project and overall health of the company.
Create and utilize an onboarding process that directly reflects each company’s unique mission and values to make sure you always have the right people in the group.
Strategic Alignment Without Uniformity
The exact same playbook isn’t going to work for every board. This is why Greg adapts elements of a core strategy to fit the needs of specific contexts. He aligns everyone around those central pillars, such as growth metrics, accountability, ethics, and the creation of value. Diversifying how you approach various board systems will help strengthen each of them based on their needs and resources.
Leveraging Diversity as a Strategic Asset
A wide variety of industries, perspectives, and experiences can bring a sharper focus to discussions that the board needs to have. Greg encourages a healthy friction in meetings. Just make sure this friction is always geared toward serving the company’s overall mission, not individual interests and egos.
Pitfalls to Avoid in Board Management
There are many ways to improperly manage a board. Try to avoid the most problematic ways that boards become ineffective and create liabilities for businesses instead of being assets for their growth and longevity.
Update-Heavy Board Meetings
One of the reasons that employees complain about long meetings that could have been emails is that those meetings are focused on updates instead of being focused on making decisions.
Being in update-heavy meetings is unproductive and can leave motivated members feeling drained and frustrated instead of inspired and energized. The same issue can weaken the impact of board meetings. Instead of spending so much time on updates for deliverables, keep the meeting time geared toward making decisions that can be acted on outside of the meetings. For example, a week or two before a board meeting, a form could be sent out that allows each member to provide an update on their particular tasks since the last meeting. The responses on that form can be distributed to members a few days before the meeting so that everyone is caught up by the time the members gather again. Zero meeting time gets wasted on updates, and all the time is spent moving the company’s mission forward.
Allowing the Board to Stagnate
Filling the board with the same kinds of people all the time means that it stagnates. No new ideas or perspectives enter into the conversations that are being had about the company. It’s helpful to bring in new voices regularly so that they can provide challenges, perspective, and accountability.
Boards of Sycophants or Cynics
Boards are meant to be made up of people who partner with each other in order to make a team effort to reach business goals. If a board is merely a collection of sycophantic people who think the company can do no wrong, they will have a lot of blind spots related to where the business needs to improve.
When a board is made up mostly of cynical people who are consistently openly complaining about everything the company does, the places where things are going right can be overlooked for the shortcomings.
The goal is to create a balance. Members should not hesitate to celebrate victories, but they also shouldn’t shy away from pointing out when something is going awry so that it can be addressed and resolved. The board leaning too far one way or the other clouds the board’s vision and impedes its ability to make sound decisions for the sake of the company.
Evolving With The Times
It’s easy to just keep doing the same things with the same people, regardless of industry, context, or shifts in the market. But the most successful boards of top companies throughout the world aren’t afraid to embrace the times in which the business is operating. Someone having decades-old experiences within an industry might not be as helpful as someone who has fresh experience in that industry, as things stand in recent history. You may sometimes even run into board members who don’t know a particular strategy or type of technology exists. Meanwhile, a member from later generations may use that tech daily for their own personal or professional ventures and could be just the person to help the company adopt that tech to increase revenue and productivity.
Make the shift towards boards that a more inclusive, younger, and more tech-savvy. Emphasize environment, social, and governance (ESG), diversity, equity, and inclusion initiatives (DEI), and resilience strategy at the board level. Seasoned professionals like Gregory can often serve as mentors for the next generation of board chairs so that experienced guidance is nurturing current and forward-thinking ideas.
Conclusion
Managing multiple boards isn’t just operational, it’s relational. Making sure that each board has what that specific group needs to function appropriately and avoiding the most common problems people run into when trying to manage multiple boards will help you meet your goals more quickly and manage these groups more easily. Gregory K. Jones’ model proves that synergy comes from thoughtful and intentional design, self-aware and adaptive leadership, and strategic recruiting and alignment of board members. High-performing boards build high-performing companies. But the secret ingredient to creating those high-performing boards is synergy.