The leader’s checklist for administrators

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Donor: Wharton management professor Michael Useem is director of the Wharton Leadership Center and the McNulty Leadership Program. He is the author of The Leader’s Checklist: 16 Mission-Critical Principles (10th Anniversary Edition), Wharton School Press, 2021 and The Edge: How 10 CEOs Learned to Lead, PublicAffairs Books, 2021.

The goal

Continuously understand and assess your board’s performance and responses to today’s most pressing strategic and leadership issues.

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Business leaders are increasingly called upon to partner with leaders, playing an important role in driving a company’s strategy and leadership. Fortunately, many of them have extensive experience in running their own businesses and are ready to contribute to the strategy and leadership of a business. The challenge for them is to bring this expertise regularly and systematically to their boards – and for this, a set of governance checklists, consisting of a series of well-researched questions, can be a useful resource. These checklists can also be used as models for leadership in advisory committees, product teams, work teams, or just about any other group. And the leadership roles of board chairs can be extended to group leaders and team captains.

Action Steps: Apply Three Manager’s Checklists

Directors Checklist 1. Questions for Directors, Officers, Owners and Investors:

  • Do business leaders and managers have a compelling strategy to create value and increase advantage?
  • Are business leaders and managers able to think and act strategically?
  • Is the business organization capable of executing its strategy?
  • Do all officers and directors add value to the company’s strategy and leadership?

Administrator checklist 2. Risk and resiliency issues for administrators:

  • Identify hazards that can become disruptive or even disastrous if not detected and mitigated, including those caused by management.
  • Work with leaders to caution against intuitive thinking that can lead company leaders to misjudge high impact, low probability risks.
  • Bring more deliberative thinking into both the boardroom and the executive suite.
  • Hire directors with prior experience in risk management to strengthen the engaged and deliberative oversight of business risk.
  • Helpfully guide and assess business risks in the development of new products and services, asking critical questions and challenging management’s assumptions.
  • Urge executives to justify their forecasts, anticipated results and identified risks without micromanaging them.
  • Strengthen the standards of informed and active engagement in risk monitoring; recruit and coach senior executives to think more thoughtfully about business threats.

Manager’s Checklist 3. Questions for Homeowners and Investors:

  • Has the board chosen the right board chair and established a process for identifying the next one?
  • Does the president organize effective executive sessions and ensure that the CEO receives real feedback from directors?
  • Is the president able to work well with senior executives, but also ready to ensure that a failing CEO is mentored or fired?
  • Has the president set up a way for directors to communicate directly with owners and investors?
  • Does the board annually assess the performance of the president?
  • Has the chair made arrangements for the best prepared directors to chair key committees?
  • Does the chairman regularly consult other administrators offline?
  • Does the president focus directors on the strategic challenges and leadership capabilities of the business?
  • Are directors actively leading the business on key decisions in partnership with executives, not just overseeing them?

How a company used it

As the Chinese group Lenovo, the world’s largest personal computer company, globalized its operations, directors played a central role in defining the strategy, leadership and integration of the business. Lenovo acquired the personal computers division of IBM, and in doing so, actively adopted the four questions of the Director’s Checklist 1 to strengthen the strategic thinking and leadership of its directors and executives.

Regarding the fourth question of the first director’s checklist, for example: Do all board members and senior managers add value to company strategy? – the company overhauled the composition and procedures of its board of directors to strengthen the multinational contributions of directors. Regarding the second question: Are the post-acquisition board of directors and management team ready to think and act strategically in chairing their company? – Lenovo broadened the focus of its directors to focus on strategy and leadership of the company’s multinational operations.

Applying the second question from the Director’s Checklist 1 – whether senior executives are able to think and act strategically – the board insisted that Lenovo executives reflect the new areas. geographic areas of operation of the company. One year before the acquisition, all members of the management team were Chinese; two years after the purchase, 6 were from greater China, 1 from Europe and 11 from the United States.

According to the three leadership checklists, there was a clear difference between how Lenovo’s board of directors operated before and after its decision to acquire the IBM PC division.

In line with the fourth question of Directors’ Checklist 1, whether officers and directors add value to the company’s strategy and leadership, Lenovo has submitted a multitude of strategic questions to the board of directors. administration for its control and final decision-making. Issues included how long to keep the IBM logo on its products, what new acquisitions to pursue, what adjacent product areas to enter, and whether to build devices that link laptops and desktops together.

Lenovo directors also lobbied for new directors who would add in-depth experience to the company’s strategic and corporate leadership. Lenovo has also shifted its directors from a relatively limited role in management oversight to more active engagement in corporate strategy and leadership. The board had been primarily concerned with audit and compensation, but after the acquisition it played a much larger role.

To ensure a disciplined alignment of strategy and leadership, Lenovo has formed a strategic committee appointed by the board of directors, responsible for overseeing the medium and long term decisions of the company on behalf of the directors. The strategy committee met monthly on issues ranging from company leadership to cultural integration, and played a particularly important role in assessing the leadership of the company, as specified by the checklist. 2 of the director. The Executive Chairman and CEO submitted annual self-assessments and 360-degree feedback results. committee and board, and the directors then assessed the extent to which executives had met the financial, market share, talent recruitment and related goals of their annual plan.

According to the three leadership checklists, there was a clear difference between how Lenovo’s board of directors operated before and after its decision to acquire the IBM PC division. Prior to the purchase, the board of directors functioned without a strategy committee or annual performance review. Director decisions have shifted from auditing accounting and shareholder rights to branding, sourcing, strategy and leadership. Directors replaced the first CEO, decided not to make an acquisition, and facilitated the cross-cultural integration of very different divisions.

A decade after acquiring and reshaping its board and management to better strategize and lead the business, Lenovo had the largest global market share in PC sales. To get the most out of a board, developing a set of governance leadership checklists is one way to ensure that directors and officers pay attention to the features in detail. mission critical for what constitutes an optimal combination of strategy and leadership in your boardrooms. .

This Nano Tool is adapted from The Leader Checklist: 16 Mission Critical Principles, by Michael Useem (copyright 2021), courtesy Wharton School Press.

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