Equilar 500 companies have announced 59 CEO departures through the third quarter of 2019. This compares to a total of 80 CEO departures in all of 2018. 48 of the 59 CEOs departed by the third quarter with the other 11 expected to leave later this year.
High-profile breaches make the news far too often, ones that
compromise hundreds of millions of people’s data and that cost organizations
millions of dollars. Many companies that have been hit are still working to recover
from reputational and financial damages, months and even years later.
Looking beyond the big headlines, though, your board can
find valuable information on cybersecurity in those companies’ proxy
In 2018, the Securities and Exchange Commission (SEC) issued updated interpretive guidance to help public companies draft their cybersecurity disclosures. The guidance encourages companies to be more transparent on their cybersecurity risks and incident disclosures, including disclosing the board’s role in overseeing cybersecurity risk. But if you look at most companies’ proxy statements, their disclosures don’t really say much. In fact, they often include only a sentence or two with boilerplate language that simply states that their board or one of its committees oversees risks related to cybersecurity.
On the other hand, when you look at the proxies of some companies that have successfully managed to make it through a breach, there’s usually a noticeable difference. They are more transparent about their board’s cybersecurity oversight. Their disclosures are also more robust, spelling out in more detail what their boards are doing to get a better handle on cybersecurity.
Here are some of the things such companies are doing—and
that your board can do as well to strengthen your cybersecurity policies and
“private sessions” with the chief information security officer (CISO) or chief
information officer (CIO). Private sessions have historically been used by
the audit committee to hear from someone leading a significant risk area of the
company without senior management in the room. Having a similar private session
with the CISO or CIO provides an opportunity to have candid and confidential
conversations, to clarify matters discussed in previous committee meetings, and
to talk about sensitive topics like key risks and the adequacy of the cyber
budget and resources.Hearing directly
from third parties about the company’s security programs. Many companies
are using third parties to perform cyber readiness assessments, penetration
testing, breach table-top crisis simulations, and other support exercises around
cybersecurity. While these third parties are generally hired by management,
they can also present their findings or points of view to the full board or the
committee responsible for overseeing cybersecurity. This provides an “outside-in”
perspective on the company’s security program.Leveraging
internal audit to test aspects of cybersecurity-related internal controls. Companies
can use internal audit for independent testing of certain aspects of their
cyber risk program. For example, internal audit can look at internal controls
around user access control management, security controls, third-party vendor
management, security exceptions, exception approvals, and the monitoring of
expired exceptions. Internal audit can also follow up on both the results of
penetration testing and suggestions for improvement. Paying
particular attention to the company’s cybersecurity crisis plans. Most companies
have accepted that they will have to deal with a cyber breach at some point, so
it’s crucial to have a response and recovery plan. Boards who have dealt with
breaches are disclosing their active participation in overseeing those plans.Including
cyber oversight as part of their discussions related to company strategy. Being
proactive and focusing on cyber risk at the strategy stage is also critical—ether
related to ongoing businesses or the company’s focus on adopting emerging
technologies in new business areas. Noting in disclosures that the board is
incorporating cyber risk into its strategy discussions indicates that it is
getting ahead of the risk and not leaving it as an afterthought. Specifying
the number of times per year the board is briefed on the threat environment and
the company’s progress in addressing cyber risks. Briefings seem to be happening
on average about twice a year, with certain industries indicating that they are
getting briefings quarterly. More broadly, some companies are disclosing how they are
staying educated related to cyber risk, either by noting annual board training
or by discussing the addition of directors with specific cybersecurity
expertise to the board.
Companies that have gone through a cyber crisis have experienced the process from start to finish, and they have recognized the need to be more transparent in their disclosures about the board’s role. If you haven’t been through a crisis, it can be helpful to look at such companies’ disclosures. There’s a lot you can learn. At a minimum, you can think about whether your board should be doing the same things, and if you are doing these things already, you might want to enhance your disclosures to show that you’re taking the right steps should your company be hit with a breach.
While there may not be many of the more robust disclosures
out there just yet, I believe we’ll start to see more in the future—not only
because the likelihood of companies being attacked is constantly on the rise but
also because boards will continue to be in the spotlight as cybersecurity oversight
Ready or not, artificial intelligence (AI) is already
permeating the business world, posing a host of opportunities and—if AI isn’t
approached intelligently—an accompanying host of risks. AI’s lure may be in its
capacity to collect and learn from data, which is indeed revolutionary, but AI’s
implications extend well beyond having the right data at the right time and
deploying it well.
NACD, in partnership with Grant Thornton, hosted an October 29 roundtable discussion in Naples, Florida for directors wanting to better understand the implications of this rapidly expanding technology and the board’s role overseeing how it is implemented and managed within an organization. Over the next two weeks, the NACD BoardTalk blog will feature highlights from this discussion.
Nichole Jordan, Grant Thornton’s national managing partner of
markets, clients, and industry, led the conversation by breaking down the
concept of AI into three questions boards should consider:
What is our understanding of our company’s
digital transformation strategy?Are we leveraging technology for our board work?
How is our company staying ahead of regulations?
A digital transformation strategy hinges on the people that
a company has to deliver on that strategy, according to Jordan, and AI can be a
differentiator in a marketplace clamoring to attract and retain top talent. For
example, some companies are using artificial emotional intelligence to monitor
employee engagement and to make better-informed decisions and better drive
In the financial services industry, for instance, the responsible
company must pay financial penalties when trading errors occur, but these
errors are common—and understandable—because the people responsible for
executing trades are constantly operating under high-stress conditions.
Innovations in wearable technology could be used to notify an employee when
they are under a heightened state of stress and encourage them to slow down or
wait to make a decision in the interest of avoiding making an error.
That same wearable technology could be used to monitor an
employee’s facial expressions and vocal cadence—which could result in better
business outcomes and, as one director observed, coaching and feedback in a
call-center context. Other directors observed that AI could be used for
employee safety and compliance—such as using AI technology to monitor time on
the road in the trucking industry, in which drivers are required to drive no
more than 11 hours per day.
These possibilities do raise ethics and compliance issues,
though. For example, these potential advantages could also be seen as invasions
of privacy. Many of the AI programs being piloted now to help employee
performance are opt-in only, meaning the employee must consent for the company
to collect their personal information in this way. Multiple attendees also
expressed concerns about the hiring phase, in which AI could ostensibly be used
to screen for people that fit the company’s current mold—potentially perpetuating
or introducing discriminatory hiring practices, as well as denying a company of
the game-changing talent it might have hoped to attract.
Here, it’s critical to remember that AI is only as good as
the algorithms that underpin the system. “This is the risk here—and also one of
the reasons why these systems are in pilot mode,” Jordan said. “But it’s also
why the combination of the human and the machine leads to the very best
Jordan emphasized the need to mindfully temper technology
with human discretion and judgment:
“AI provides data points for a hiring manager to consider or
can reduce a significant volume of applications—and those industries where
there is a high job application volume is where we see this technology being
tested right now.”
“But,” as one director observed, “there are so many
mom-and-pop shops that don’t bring enough sophistication to the table that they
run a huge risk of making some significant errors.”
“And it’s not just hiring,” another director added. “It’s
promotions from within and making judgment calls. I’m concerned about biases
and missed opportunities.”
Jordan noted that at the board level, an AI strategy is
required because of that risk. “While the company may not be engaging with AI
today, there should be a discussion about when it will be incorporated into the
strategy,” Jordan said, “or, at least have some outside organizations come in
and talk with you, because it’s good for boards to get that outside
Visit the NACD
BoardTalk blog next week for additional coverage of this discussion, including
insights on how boards are using AI to approach their work and the regulatory
concerns around this rapidly evolving technology.
In what has been characterized as a “move[ment] away from shareholder primacy” and a “commitment to all stakeholders,” the Business Roundtable (BRT) released a new “Statement on the Purpose of a Corporation.” The new statement is, in many ways, a reversion to the BRT’s 1981 “Statement on Corporate Responsibility.” The 2019 statement supersedes the 1997 “Statement on Corporate Governance” which had declared that “the paramount duty of management and of boards of directors is to the corporation’s shareholders.”
of this, of course, is news to the regular readers of the financial
press. The new statement has received a tremendous amount of attention
from investors, journalists, academics, and politicians. It will be
carefully considered by public company management teams and boards of
directors, even those not part of the BRT.
all of that attention, at least three critical points seem to be underappreciated. They
are worth pausing over.
despite the title of the statement, it is really not so much about “purpose” as
it is about commitments to various corporate constituencies. A
corporation’s purpose is typically to produce goods and/or services in the
advancement of business goals often articulated in a mission statement. The
purpose of the corporate form is to enhance the ability to gather the equity
capital required for the production of those goods and/or services by promising
limited liability to those capital providers. All of this takes place in
the context of a capitalist economic system, the benefits of which the new statement
Second, the now somewhat discredited language of “primacy of shareholder interests” never meant that there weren’t duties to the other stakeholders. Nor did it imply that long-term shareholder interests could be served without meeting the fair expectations of the other stakeholders. The various commitments articulated in the statement represent what corporations were already obligated to do or what most found it in their enlightened self-interest to do when attending to building value for the shareholders. For example:
The statement commits to “delivering value to customers.” Customers are protected by the market—companies that do not deliver value through quality and innovation do not flourish and may not survive. And, customers have the protections of the antitrust laws, the FDA, the CPSA, privacy laws, the UCC, tort law, and contractual warranties. The statement commits to “investing in our employees.” A dedicated, motivated and well-trained workforce is a competitive advantage. Especially at a time of relatively full employment, the market will punish companies that do not treat employees well. Employees are protected by OSHA, WARN, ERISA, ADA, ADEA, EEOC, FLSA, NLRA, whistle-blower anti-retaliation laws, employment agreements, and state law limitations on noncompetition agreements. The statement commits to “dealing fairly and ethically with our suppliers.” Suppliers have contract rights and will not do business with those who stiff them.The statement commits to “supporting the communities in which we work… and protect[ing] the environment.” Again, there are specific protections here (including environmental laws), and companies support their communities through the payment of taxes and philanthropy. Moreover, universities and other not-for-profits with stock in their endowments benefit from corporate profitability.There
is also a raft of protections for creditors—a stakeholder group that was not
specifically called out in the statement.
are of course duties to the shareholders, to whom the statement appropriately
commits to seek to “generat[e] long-term value.” That commitment is enforced
through generalized fiduciary duties. Unlike the other stakeholders, the
shareholders generally are not protected by specific laws and regulations
(other than securities laws). Moreover, shareholders receive value only if
there is residual value left over after all of the other stakeholders have
received their due. This is graphically illustrated on the right side of a
corporate balance sheet—shareholders’ equity is at the bottom and can be
Finally, the legal impact of the statement must be questioned.
The statement does not change the law. Generalized fiduciary duties are still owed only to the shareholders, and in some ways that is the practical meaning of the phrase “primacy of shareholder interests.” Even though some commentators have suggested that the statement establishes equivalent duties to all of the stakeholders to whom commitments are made, that is simply not the case. And, from the standpoint of corporate decision-making, thank goodness for that! Nor does the law stand in the way of fulfilling the commitments articulated in the statement: It has always been the case that corporate directors and officers can take actions of the types that are committed to in the statement… so long as there is any rational basis for concluding that those actions will ultimately redound to the benefit of the shareholders. That is the legal and economic underpinning for corporate social responsibility.
Thomas A. Cole is senior counsel and chair emeritus of the executive committee of Sidley Austin LLP. He teaches the seminar on corporate governance at The University of Chicago Law School. He is the author of CEO Leadership: Navigating the New Era in Corporate Governance, to be published in November by The University of Chicago Press. His colleagues advised the BRT in the development of the 2019 statement. The views expressed in this essay are not necessarily the views of Sidley or its clients.
For more thoughts on stakeholder primacy, check out NACD Directorship‘s November/December 2019 article, “The Primacy Debate: Voices For and Against.”
Boards are under increasing pressure from
investors, regulators, and the general public to adapt to and better manage the
factors that influence how organizations are created, grow, and succeed—and to
do so with transparency and accountability. This requires unparalleled
collaboration and harmony of purpose among those charged with risk management.
But findings from a new Institute of
Internal Auditors (IIA) report paint a troubling picture that is anything but
harmonious. Worse yet, the report’s key findings suggest that boards generally
have an overly optimistic—and potentially dangerously skewed—view of how risks
OnRisk 2020: A Guide to Understanding, Aligning, and Optimizing Risk uses quantitative and qualitative surveys to determine how boards, executive management, and chief audit executives view key risks based on their personal knowledge of the risks and their views of their organizations’ capabilities to address them. Importantly, the report offers an analysis of how those views differ and what that means to an organization’s risk management.
Data analysis for this year’s report reveals
varying levels of misalignment among respondents on 11 primary risks. Some of the
report’s most important findings include:
Boards have a consistently rosier outlook than others who walk the halls. Executive management’s views on risk management capabilities are consistently more conservative than the board’s, which suggests an even more disconcerting condition: Boards don’t grasp the complexity of the risks their organizations face, aren’t getting the right information to fully understand the organization’s risk posture, or simply take what information is presented to them about risk management at face value. Furthermore, directors are more likely than executive management and chief audit executives to think their organization’s risks are well managed. This suggests better communication pipelines are needed between management and the board to ensure that directors see the full risk picture.
Most survey respondents believe a certain level of misalignment on risk perceptions is acceptable. The qualitative survey found approximately 7 in 10 respondents expressed the view that some level of misalignment is “healthy”. While some misalignment around individual knowledge is to be expected, a cavalier attitude that that misalignment is somehow healthy is troubling, in particular with respect to misaligned perceptions of an organization’s ability to manage risk.
Certain industries are falling behind when it comes to integrating enterprise risk management processes. Overall, 67% of respondents reported using a systematic approach to identifying, managing, and monitoring risk. However, some industries that struggle to develop coordinated risk management strategy include health care (51%), retail/wholesale (47%), and public/municipal (38%).
Cybersecurity and data are increasingly important for proper board oversight, but respondents seem to have little understanding of these areas. Boards and C-suite executives reported minimal knowledge in cybersecurity and data, which were rated among the most relevant to companies today. For example, less than a third of board members and executives interviewed rated their knowledge of cybersecurity at either a six or seven on a seven-point scale (top two). Organizations should make improving their understanding in these areas a top priority. Moreover, predictions by chief audit executives about the growing influence of three risk areas—data and new technology, data ethics, and sustainability—offer organizations an opportunity to proactively address them.
Talent management is on the radar of all OnRisk 2020 respondents. They understand that finding and keeping talent, particularly workers with data and information technology skills, will drive future success.
The Time for Action Is Now
Internal audit is often unfairly criticized
as identifying problems without offering solutions. Indeed, a long-standing macabre
joke among risk managers is that internal audit’s job is to come in to bayonet
One of OnRisk 2020’s significant benefits is that it offers solutions. Through careful analysis of survey data, as well as additional research, the IIA has identified actions each respondent group could take to improve their alignment on risk management and, ultimately, enhance their organization’s ability to address each of the 11 risks examined in the report. One theme for recommendations across a number of key risk areas was for boards to press executive management for more information or more frequent updates on risk management efforts. Another was a push for greater transparency and timeliness from executive management when reporting on key risks. OnRisk 2020’s overarching message is that all organizations can benefit from conducting reviews of risk knowledge and capability perspectives among their boards, C-suites, and internal audit functions.
One definition of risk management is to
identify and evaluate risks based on impact and likelihood, then implement
necessary controls and processes to leverage or minimize them. Any weakness in
an organization’s risk management strategy or its execution is, in itself, a
risk. Misalignment among the board, executive management, and internal audit on
risk is one such weakness that can and must be corrected.
F. Chambers (CIA, QIAL, CGAP, CCSA, CRMA) is CEO and president of The Institute
of Internal Auditors. He has worked as a risk management and internal audit
leader for more than four decades.
In the report of the 2019 NACD Blue Ribbon Commission, Fit for the Future: An Urgent Imperative for Board Leadership, NACD and this year’s commissioners offer recommendations for a critical and updated approach to board leadership and operations, involving greater speed of decision making, proactive behaviors, adaptability, and innovation. Necessitated by a landslide of challenges such as the pressure for companies to articulate and justify their broader purpose, increased investor scrutiny, fast-changing geopolitical strife, and the growing complexities of technology and business model disruption, boards must evolve rapidly in order to create long-term value amid seismic shifts, sometimes occurring concurrently, and sometimes interacting and amplifying each other.
In this environment, which puts a premium on orchestrating
dramatic transformations and the successful execution of new ideas, there is an
even greater onus on boards—and board leadership—to exercise good judgment.
The general counsel, as an advisor to the board and as a partner
to board leadership in the role of corporate secretary, plays an important part
in identifying future-state opportunities and supporting board leadership’s
efforts to identify needs and embrace change. While the general counsel will be
a pivotal player in supporting actions identified throughout the report, key
areas of focus for the general counsel are highlighted below.
Build Agility and Clarity
Into Board Operations and Structure
Facilitate board assessment. The general counsel can both recommend and facilitate assessment of the current operations of the board and the performance of existing directors. Likewise, the general counsel can help determine and document the needs for future directors, with an eye toward diversity and the skills needed to future-proof the board. Board assessments would be usefully complemented from time to time by a 360-degree management assessment of the board, enabling some helpful truths to be conveyed, in a measured fashion, about how the board’s overall contribution could be strengthened.
Rethink agenda setting in partnership with board leadership. Board leaders—and by extension generals counsel—must optimize scarce meeting time, rethink agenda setting, and consider the use of virtual tools to connect more continuously as a board. Important objectives include creating “white space” time in the board agenda for open conversation and to delve into identified issues of importance, and fostering dialogue and minimizing time spent on formal presentations.The general counsel should make creative recommendations for new ways of collaborating. For example, the general counsel could recommend that board leadership consider encouraging cross-fertilization and interaction between committee chairs, combined with periodic joint meetings of committees with overlapping or interlinked mandates, such as the audit, risk, and technology committees.
Regularly update documents to keep forward momentum and provide clarity. Working with the chair of the nominating and governance committee, the general counsel can assist in performing a rigorous governance review that covers the board’s governance guidelines, operations, structure, and charter(s) every year. The board’s annual goals should also be clearly captured, and minutes may need a fresh approach to effectively document thinking on strategic issues.
Streamline reporting to the board. Review the protocol for the flow of information to the board to ensure appropriate transparency on company performance and risk, while also evaluating the volume, efficacy, and digestibility of information provided to the board.
Draft board leadership and director role requirements. The general counsel can surface the need to define, and periodically refine, the characteristics and role requirements expected of the company’s next board leader in order to prepare candidates to lead the board into the future. For example, the board should consider emphasizing the importance of fortitude and adaptability when updating the leader’s role definition. Also, the general counsel can draft individual director job descriptions that reflect the new requirements of the board’s current and future strategic needs, valid stakeholder expectations, and an inclusive board culture.
Revise and refresh director onboarding. Robust director onboarding is becoming increasingly important, and repeating onboarding for directors who have held a seat for some time can also be valuable. In fact, a board on which one commissioner serves has created a “re-boarding” program for directors, which kicks in 18 months into their board service to help them better understand the business and to enhance their board and committee contribution.
Foster Continuous Learning
Partner with board leadership on a learning agenda. The general counsel should assist in developing and maintaining a targeted, continuous learning agenda for the board, which may include time on board or committee agendas for learning about industry-specific topics or emerging trends, as well as external time spent on additional learning that may benefit the company on governance matters, regulatory developments, shareholder/stakeholder issues, and/or team dynamics and decision making. A continuous-education strategy for the board should also include sessions where the board collectively reflects on governance failures that happened elsewhere, perhaps at companies in their industry.
Consider management’s learning as well. Continuous learning also applies to management, and the board should encourage selected executives to take board positions at companies that are not competitors. For the general counsel, seek opportunities beyond the legal sphere to increase your value as a business partner to the board.
Balance risk with a need for increased visibility. In the board of the future, the board leader needs to challenge prevailing assumptions about the limits of transparency and disclosure, engaging directors and management in dialogue about how to appropriately offer visibility into the workings of the board. As a leader in managing organizational risks, the general counsel should have a voice in how to increase visibility without also increasing risk to an unacceptable degree.
The proxy statement and the compensation discussion and analysis can be utilized to tell a more comprehensive story about how the board operates.
It is likewise important to prepare designated members of the board to engage directly with investors on selected governance matters.
Use clear documents to impact accountability. Strengthening the board’s accountability for individual director and collective performance is an urgent mandate for every board leader. This requires that board members have a detailed job description and a clear understanding of what is expected of them. As noted above, the general counsel should have a hand in developing director role descriptions that reflect the enhanced requirements of the company’s board.
It is the board leader’s job, as ever, to build and maintain
a high-performing board. Board leaders must catalyze and orchestrate a
transformation in how the board is composed and structured, how it operates and
interacts with the business, and how it holds itself accountable. The general
counsel’s involvement, diligence, and creativity will be critical in supporting
board leadership on this journey. In addition to strategies and
recommendations, the 2019 report offers toolkits to assist the board and, by
extension, the general counsel, in accelerating change to achieve the board’s
optimal future state.
One of the key strengths of Career Partners International (CPI) is the unique combination of a global presence with local Partners serving as experts in their own Markets. We are pleased to announce two of our Partners are expanding their footprint in the North American Region.
Continuing its ongoing growth, CCI Consulting, a Career Partners International Firm, is proud to announce its expansion into Washington D.C., Baltimore, Northern Virginia, and Harrisburg. The firm has established an office in McLean, VA, and is soon opening offices in Baltimore and Harrisburg.
“We’ve been working in D.C. since 2004, supporting various government agencies as a women-owned business enterprise. This expansion reinforces our commitment to growing our federal and state clients while building on more than 30 years of success supporting commercial and non-profit clients,” said Sharon Imperiale, CEO, CCI Consulting. “We believe organizations in each of these markets will benefit from our experience, perspective, and ability to make positive impacts on the people side of their business.”
“This expansion into the Baltimore/Washington metro area presents an exciting new chapter for us and for CPI,” said Joseph Dougherty, Vice President and Market Leader for DC/MD/VA, CCI Consulting. “This is a critically important territory in the United States and there are ample unmet Talent Management needs. Our goal is to continuously help leaders link their human capital strategies to the evolving needs of their organization.”
Keystone Partners, a Career Partners International Firm, will launch expansions in the St. Louis and Dallas markets in early 2020. Keystone has grown exponentially in recent years and is known for their world-class delivery and client satisfaction, trends that are sure to continue with this expansion.
“Keystone Partners and CCI Consulting are long valued members of Career Partners International. Both firms contribute greatly to the organization, providing thought leadership, executive support, and unrivaled expertise,” states Bill Kellner, President of CPI. “We are thrilled that they have chosen to bring their expert solutions and services to clients in these markets.”
The post Career Partners International Expands in Multiple US Region Markets appeared first on CPIWorld.
While there is certainly an overlap, there are important differences between executive onboarding and performance failures. The vast majority of people that fail in jobs fail for one of three reasons: poor fit, poor delivery, or poor adjustment to a change down the road.
Poor fit is always a failure of selection, due diligence or attitude during onboarding.
Poor delivery is an onboarding failure if it’s caused by getting up to speed too slowing and a performance failure later on.
Poor adjustment is an onboarding failure if it’s rooted in not yet having built a network of trusted advisors to point out the need to adjust or how to adjust. It’s a performance failure if it’s rooted in a fundamental inability to see changes or listen to others.
The heart of executive onboarding well is converging into the team before trying to evolve it. This requires getting a head start, managing the message and then setting direction and building the team leading up to and through your first 100-days or so. Follow this with sustaining momentum and adjusting to change and your risk of onboarding failure is greatly decreased.
Click here to read more.
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Have you ever experienced challenges in your business that you resigned yourself to missing your financial plan? Teams in the National Football League encounter the moment where they are playing to make the playoffs or “playing for next year”. For them, throwing in the towel delivers higher draft capital for the next year. For the rest of us, though, we need to find a way to pivot and win and not accept mediocrity. One NFL team did just that at a moment of despair…they pivoted.
You’re not as competitive…now what?
The most important position in all of sports is the quarterback of an NFL football team. The teams that make the playoffs each year – particularly those that progress to championship games – have all-league quarterbacks that are destined to be members of the hall of fame. Simply put, when you have a hall-of-fame quarterback, you will be competitive. When you don’t, your path to success is very challenging. So, when your hall-of-fame quarterback gets hurt in the second game of your season and is replaced by a novice quarterback, do you lower your expectations? Most say ‘yes’. The Pittsburgh Steelers are saying ‘no’.
As the quarterback of the Steelers, Big Ben Roethlisberger has led the team to three Super Bowls. His game two injury led to the promotion of Mason Rudolph – a quarterback that had never started a game in his young career. Rudolph lacks Roethlisberger’s ability and, more importantly, his experience. Steeler fans prepared themselves for the inevitable losing. But, something surprising happened after the Steelers started 0-3, they pivoted – and doubled-down – to a new strategy to win games in a new way. They would win via defense.
Shrivel or Pivot
Many businesses find themselves in the same situation as the Ben-less Steelers. With a weak competitive position, they meander along with low expectations and resign themselves to being inferior to competitors. Have you ever had a competitor that launched a significantly better product or innovated their customer experience in a way that you questioned your ability to compete? Have you ever lost talented people that carried institutional knowledge and skill out the door? Its tough to swallow but you can accept defeat and do your best, or, you can pivot to compete differently.
The Steelers pivoted. Their offensive game plan became more conservative to accommodate the novice QB. Their defensive game plan became more aggressive to capitalize on a young and promising defensive group. And then, the Steelers doubled down to get an early win with this new strategy and convince their fans, and themselves, that they could be a playoff team without Big Ben.
BRAVE leadership: ATTITUDE matters a lot
In our book Point of Inflection, we talk about the BRAVE leadership framework where the letter “A” stands for Attitude. Attitude speaks to the choices driving leaders and how their teams will win with strategy, priorities, and culture. The Steelers shifted their strategy from offensively-driven to defensively-driven, they allocated their resources (best players) to reinforce the strategy, and they rallied the team to energetically execute. Coach Tomlin deserves a lot of praise for the culture of this team. His leadership and attitude got them to believe in the new direction, and each other, in an impressive feat of leadership.
Most NFL coaches these days are hired for technical skill – innovative offensive minds, quarterback whisperers, and defensive gurus – yet should a case be made that good leaders and positive cultures are the most sustainable advantage for a franchise? Can the same be said for businesses? It is no coincidence that the coaches with the most tenure in the NFL – Bill Belichick (19 years), Sean Payton (13), Mike Tomlin (12), and John Harbaugh (11) – are leaders of teams with sustained high levels of performance and team cultures that are considered rock solid? Leadership and attitude mean a lot.
Are Business Pivots Harder Than Football Pivots?
NFL pivots are high profile but it is really just a game, right? Business pivots aren’t quite so easy.
Or are they? The need to pivot can be prompted by a strong competitor, changing customer behaviors, a recent acquisition, or simply lackluster performance. Ask yourself whether you can envision these types of pivots below – pivots that can change the trajectory of your business as they have for other successful businesses:
Over invest in a customer service model that materially advances satisfaction
Change your pricing and packaging to dilute a competitor advantage
Build a customer buying experience that makes it much easier to buy with you
Develop a channel marketing and sales strategy that minimizes sales advantages at your competitor
If you believe in your strategy, establish a prioritization process that over-invests in the resources most in line with your strategy
Ensure you are inspiring and co-creating with your team vs telling them what to do
The list of options is long. Pivots require a good plan and a genuine belief in the future but they are possible in all areas of our business and personal lives. Don’t accept defeat…find a way to win.
Learn more about our current best thinking at business transformations
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We’ve heard it a million times in a million different ways. You can’t embrace the future with one foot stuck in the past. You can’t go forward if you’re looking in the rearview mirror. You can’t solve problems with the same thinking that created the problems in the first place. The common theme is about the need to close out one chapter in order to embrace the next one.
There are three parts to this:
1) Accepting the need to close out a chapter
2) Closing out the old chapter
3) Moving on.
Click here to read more.
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