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Sunday, 7 July 2019

Considering Joint Managing Directors? Avoid it Like the Plague!

I feel that I can approach this topic without fear or favour simply because I have been through the situation personally and, quite frankly, it wasn’t a particularly happy experience. 

This was helped by using the experience I gained in several consultancy jobs where I found that the same problem is really widespread. 

It can be and frequently is a function of a family business and often occurs because an earlier generation is reluctant to cause disturbance in the family and hence the business by promoting one member over another. 

So what is this all about?  Simply put it is the cop-out decision to continue the family domination through joint-leadership, Managing Directors/CEOs and even Chair of the board and it can be a recipe for family discord at the very least. 

It is an easy solution on the face of it in the hope that each of the participants will modify their behaviour and compromise whenever there is potential discord.  The trouble is that because running a business is a job for a decisive mind, there can be a marked reluctance to listen to another opinion and compromise. 

Ideally the best way to manage a business is collaborative with  a significant proportion of decision making being effected at several levels through the organisation. 

For example Dan Pink in his excellent book, Drive, postulates the  concept of autonomy, mastery and purpose at all levels; autonomy to give freedom to the team to make decisions, which in turn encourages mastery through enhanced knowledge and all effected with a sense of purpose. 

David Marquette (Turn the Ship Around) takes much the same view as does Stephen Covey in his Seven Habits. 

It all comes together by the wise words from as long ago as the Crimean War and the strong opinions of Florence Nightingale (1820-1910) who, when presented with  a difficult decision in a failing hospital would ask: “Who is in charge here?”  

None of these gurus (and there are many more of them) are suggesting that the best form of leadership is top-down with the only autonomy being in the hands of the ultimate leader.   In fact the opposite is usually the case. 

If we consider the purpose and culture of the business and query its provenance then we must realise that it has to start somewhere and somehow.  It doesn’t just happen. 

I am strongly of the opinion that at almost any stage in the life of a business it is the primary function of the leader to determine the purpose, the culture, the mission and the values to be espoused by all involved and then to drive those criteria relentlessly into the organisation. 

In many ways it is the only top-down function of the leader especially if one of those criteria is the autonomy of decision making. If we allow and encourage decision making at all levels then the consequences of occasionally indifferent performance must be addressed and accepted. 

So, back to the topic in mind. Even in well adjusted families opinions on just about everything can be ventilated and argued over when there is discord at the top. If the culture and values of the organisation are compromised then there will be discord and uncertainty in the ranks and that can lead to splitting of decisions. In other words if I don’t like  the decision from one joint leader then I can always try another with a more compatible (for me) solution. 

There is, of course, the option of the vote at board level, heaven forfend.  The very necessity to need a vote implies that there is a split in the ranks and taking the vote strengthens it. 

I had a member of my Vistage CEO peer group who had 24 professional partners and when I naively suggested that decision making must need to be by consensus, he looked at me in astonishment. “Consensus?” he said “They demand unanimity”. I asked how they make decisions in the business as a consequence and he said, shortly “We don’t”. 

Be warned - splitting the ultimate decision maker, whatever the rationale,  can be a recipe for indecision throughout the business and that is a very undesirable outcome. 

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