No business plan survives first contact with a customer. Rather than jam a new strategy down the throats of a board of directors or team of executives, smart CEOs and entrepreneurs take the time to stress test their concepts before putting huge amounts of time, energy and money into new concepts that would have hit the wall. This takes ego control on the part of the leader and a respectful challenge from the advocates of customers and investors.
In a high-growth scale-up ventures, the person chairing the board and the person leading the executive team often have an intense and very active relationship. The CEO has the job of steering his or her team towards a vision they all share and the board is there as a strategic foil to assure that the strategic decisions–how the the team steers the vehicle–are likely to result in a favorable outcome.
The best strategic decisions result from healthy creative tension.
The video below illustrates how this works between Terry Bendera (CEO of Prostar) and Jeff Belford (his executive chairman and senior partner of Triwest Capital Partners).
In our strategic work with teams, we differentiate the blue team from the red team. The blue team is the proponent of a strategic initiative and the red team's purpose is to adopt an adversarial position and constructively look for weaknesses in the argument. The purpose of this debate is to generate feedback and perspective useful in strengthening the concept to make it more viable and easier to execute successfully. The function of the executive chair of the board and the board itself, which usually includes the CFO, is to put the brakes on an exuberant hard driving CEO, as a critical review of the argument underpinning a business thesis.
The board and other key executives advocate for customers and investors.
What make constructive dissent work as a cultural strategy is the work the senior leaders and board have put into creating an environment in which people feel safe to openly disagree. That's less of an achievement when the chair critiques the CEO. It's a lot more interesting when front-line leaders develop the ego-strength to accept the invitation to come at their executive team hard. Great ideas can come from anyone on a team and the people closest to customers and investors have some of the best perspective to share on how a fast moving vehicle can stay out of the ditches on either side of the road forward.
An open culture invites the kind of disagreement that improves decisions.