HOW TO SURVIVE DIFFICULT BUSINESS REVIEWS
Whether you are working in a corporate company or in a private equity backed business, there are the inevitable monthly or quarterly business reviews to get through. This is where you have to account for your worth in an organisation and you have to do it in front of onlookers.
By nature you are a person that wants to be measured and by nature of the job, the roles of CEO or corporate divisional head are very measurable positions. There can be two or three partners from your private equity company present in the review as well as your colleagues from your operational team. In a large corporate company there can often be a lot more.
When I was running a large division across Europe-Africa for Unisys, there were upwards of 30 people in the room. The atmosphere in the room was one of great tension right from the start because of the president being so confrontational. The very last thing you can afford to happen is for you to look out of control in a business review or board meeting – out of control because you look as though you are out of touch with the business or you are losing your composure. I have witnessed senior people like vice presidents publicly reduced to rubble in business reviews.
In the case of a private equity backed business, your chairman should be a strong conduit between the operational directors and investors. It is the chairman’s role to orchestrate all the preparations towards achieving a communicative and constructive board meeting. Sadly though, not all chairman are good at this side of their role and at times the heat will be on between investors and management without the benefit of chairman diplomacy.
When the market is strong and your programmes are producing good results, everyone is in a relaxed state. But when faced with economic downturns, increased competition or R&D slippages, the challenges are at another level and so many senior leaders are poor at recognising these pressures ahead of time and taking appropriate action. Missed targets and a turn to loss making are the inevitable signs that leaders are inept.
In my experience the higher you go up in a corporate company the slower the corporation is to recognising trends. So often you will have the unenviable task of pointing out the realities and taking the wrath from superiors who still have their head in the sand. Being well armed and articulate is key to success in this situation. The same applies to private equity investors. They invested behind a growth and value enhancing plan and don’t want to go back to their investment committee saying you can no longer meet the promises in your plan.
Sometimes business progress can be through poor or delayed execution of programmes. This scenario too needs careful articulation. Investors can be brought on side if you set out very clearly why circumstances have changed and you have a well structured plan on what you are going to do about it.
Anything you have to say about where you are up to with the business or any remedial plans must be plausible. It is very dangerous to go to the board meeting armed only with a copy of the board report and ask if there are any questions, or having a set of slides containing woolly statements. These times call for specificity.
A set of well thought through very articulate slides is the best tool you can have for surviving a difficult review. The best plausibility comes from you saying that you have personally gone to the front line of all parts of the business areas. This includes talking to customers, joining sales meetings, and talking with sales and support people. Reporting back what these conversations said gives credibility to your explanations of issues and actions. It shows you are working at a practical front-line level and not just accepting what has been fed to you by others.
- Be thinking of your next board presentation straight after the last one. You can be sure the items discussed and decided upon will be brought up at the next meeting. I remember the president of Unisys hosing down numerous vice presidents because they were presenting strategies and programmes when they hadn’t seen enough customers directly. The hosing obviously didn’t work because they got another horrible time at the next meeting for not seeing customers. I knew very well he would be looking for customer visits at the next meeting and so I commissioned me and my whole director level HQ team as top priority, to visit as many customers around Europe that was physically possible. I was then able to say at the next board meeting that we had visited over 100 customers since the last meeting and I was going to tell him what they said. I had his complete attention. I then went on to present my strategy and programmes and these were fully accepted. Nothing can substitute for staying close to the front line of the business. You are then building your initiatives on bedrock.
- Use slides to set out your explanation of progress in the business or division you run. This is in addition to your board report. You can’t be in control of the meeting if you are just sitting there talking about your report and seeking questions. The conversation will wander about until you hit upon a number or subject you can’t explain. Your slides should be expressed in a way that your points can be understood even if you verbally said nothing. I explain to my CEOs that investors will take the slides back to the office and they will hand them around at their investment committee meetings. You cannot expect your investors to articulate as well as you can about your business but the slides will work hard for you on their own if they are clear and self understood statements. Having a few reminder words sitting next to a bullet blob is useless.
- If you find your president or private equity investors probing, don’t fight it. Never show any irritation. If you are defensive or dismissive, you will look like you are hiding something or don’t know something you should know. At worst it looks like you don’t value their opinion and this is a dangerous position. If your investors like you they are much more likely to work through things with you rather than talk secretly about replacing you. If your president doesn’t like you, you are heading for the chop at the very next disaster.
- At times when business is getting difficult, I will sometimes take some members of my team to the meeting and make presentations. This has the effect of strength by numbers and also brings even more detailed knowledge of what’s going on into the conversations.
- Before the board meeting or business review, make sure you understand how your investors view your progress having read your report. In a private equity backed business your independent chairman should be doing this as a matter of course and feeding back to you so that you can adjust your focus within your presentation.
Here are some links to further reading on the subject of getting the most out of your board meetings:
Michael Tait offers his services as an independent chairman to help business leaders achieve their goals.