Introduction
Often boards invite individuals who are successful in business to become board members. Business leaders are seen to ‘have something’ that boards can access to make them more productive and raise their status in the community. It is often assumed that individuals who are successful in business are well connected. Business leaders have ‘it.’
What is it that business leaders ‘have?’ What makes them successful in business? This article outlines what we can learn in Heart, Smarts, Guts and Luck.
Traits of Successful Business Leaders
On Sunday I attended a book signing with Tony Chan who co-authored the book with Richard J. Harrington and Tsun-Yan Hsieh. He explained that their team interviewed and researched hundreds of business-builders across the globe. They found that every person who is successful in business holds a combination of four attributes – Heart, Smarts, Guts or Luck.
They found that each person tends to be biased toward one of these traits in their decision-making. Mr. Tjan gave examples of people to help us visualize those traits in action. He said that the renowned chef Alice Waters and Starbucks’s Howard Schultz are Heart-dominant. Jeff Bezos of Amazon and legendary investor Warren Buffett are Smarts-dominant. Nelson Mandela and Virgin’s Richard Branson are Guts-dominant. Tony Hsieh of Zappos is Luck dominant.
What do these traits really mean for boards
According to the authors the heart dominant person focuses on purpose and they are passionate. These people are consumed by a deep passion and driving hunger to translate their purpose into reality (p.1).
Because these people have a burning desire to translate their purpose into reality, they probably would be exceptional board members if the mandate of a board would help them fulfill one of their passions. The question is whether they would be the best choice for a board if the mandate of the board was unrelated to their passions?
The Smarts driven person is rational and facts driven. He sets goals and a system of accountability. He carefully designs his strategy and aims for optimal performance. The authors make us aware that there are different kinds of smarts – street smarts, book smarts, people smarts, and creative smarts. These people see patterns. The question is would these people would make the best contribution when a board plans strategically, measures results and is highly accountable for outcomes or when a board moves from one meeting to the next without any real plan?
The Guts dominant persons are divided into two groups, risk takers and risk tolerators (p.4). The authors say that risk takers derive excitement and engagement from being in a situation laden with meaningful uncertainty….Risk tolerators do not necessarily seek risk, yet willingly pursue their goals by understanding and accepting and managing the risks inherent in a given decision. These persons face fears. Would these people make the best board members if a board wants to maintain the status quo, play it safe, or refrain from ruffling any feathers?
Luck oriented people maintain an attitude of humility conjoined with intellectual curiosity and optimism. These people are optimistic and believe great things can happen. Would these people be good team builders on boards? Would their ability to keep control their egos assist boards to focus on their mandates and build the networks they need to achieve their aims?
Does your board choose business leaders for their strengths
I would contend that many boards choose business leaders because they are successful or for their connections. Board do not stop and wonder what the style of the business leader is and whether that style would match the needs of the board. Is that true for your board or are these statements off base?
If your board randomly selects business leaders for your board, you may wish to read this book before selecting new board members. It is important that there is match between the strengths of the board member and the needs of the board because successful board members demonstrate specific traits.
The results of my research indicate that board members need to demonstrate these traits (for more details descriptors see pages 10 and 11 in Superior Performance for your governing body)
Committed
Committed board members take governance work seriously, setting aside time to do it thoroughly, and sharing expertise with other governors.
Able to see the big picture
Governors who see the big picture understand five perspectives on an issue – that of the users, consumers, clients, legal owners, and other stakeholders with a vested interest.
Willing to listen
Listeners pay attention to both verbal and non-verbal information, and compare it with what is already known to determine whether any discrepancies exist or whether new information is being provided.
Able to communicate
Good communicators maintain positive non-verbal stances during all interactions, acknowledge divergent views, identify areas of agreement and outstanding differences, and say what they mean.
Objective
This attribute enables a board member to maintain focus on the issue while remaining detached from personal comments.
Goal Oriented
A goal-oriented member focuses on the issue rather than on the person expressing it, acknowledges different points of view, and participates actively in conflict resolution.
Well-read on Task
Well-read refers to the actual act of gleaning information from various sources, comparing what is read with what is already known, determining what information is missing, and formulating questions to gather information to fill in the gaps found in the existing materials.
Willing to maintain confidentiality
The board members allow the governance processes to take their course. The role of the spokesperson is honoured, and information which was not designed for public distribution is not shared outside the boardroom.
Final Comment
The key lesson is that a business person may or may not be a match for your board. Whether she is or not depends on the model of governance your board follows, its style, its focus, and its level of maturity. When selecting board members who are business leaders it is essential to analyze the strengths of the board, where it is in its journey, what it needs, and the specific style that will con
