How Trends in Corporate Governance Vary for Smaller Firms


Flickr photo from reynermedia on Creative Commons

I work mostly with smaller organizations, especially family-run companies, but I’m interested in corporate governance trends at larger institutions. I’ve written before about why privately held companies might want independent boards of directors. What is good for large institutions is often also helpful in small companies. And sometimes smaller organizations are ahead of stagnated large companies—they can change more rapidly when the need arises.

Here are some recent trends in corporate governance, together with how I think the trends may work differently in large and small companies:

  • Focus on independence and diversity

The Council of Institutional Investors (CII) states in its Corporate Governance Policies that at least two-thirds of a board’s members should be independent. Most small businesses rely primarily on company management to serve as directors. When most of the shareholders are also managers in the organization, this makes sense.

However, as a business grows, a focus on independence becomes more important. Large institutional shareholders will demand a voice on the board, and their opinions might or might not agree with what management wants. Because shareholders are the ultimate decision-makers, their voices should decide who is on the board.

Diversity may or may not be a focus in both large and small companies. Public sentiment desires more diversity in corporate decision-making, and greater racial, ethnic and gender diversity can keep consumer products, entertainment, and other companies with a public base more in tune with its customers. However, shareholders at some institutions may feel less strongly than others.

Here is another trend where small and large companies may diverge. Shareholders at family-run companies are more likely to want continuity and consensus than larger companies with institutional owners. Board diversity is particularly likely to be important where the shareholders are public entities, such as government worker pension plans or universities.

  • More scrutiny of the board, through self-assessment and shareholder assessment

The U.S. National Association of Corporate Directors (NACD) recommends that the Governance Committee of boards should have a process to routinely assess its own performance, the performance of its Committees, and its individual directors. Moreover, a Nominating and Corporate Governance Committee is one of three standing committees—along with an Audit Committee and a Compensation Committee—that the NYSE requires be composed entirely of independent directors.

This self-assessment is a growing trend in corporate boards. Along with self-assessment is an increased scrutiny of the board by institutional shareholders. With only independent shareholders on the governance committees of publicly traded companies, these large shareholders have the opportunity to assess the board and make changes when necessary.

At smaller and privately held companies, self-assessment and shareholder assessment may be less rigorous. But all companies should develop some form of board member assessment. For these smaller companies, it might be an outgrowth of internal succession planning and leadership development.

  • Increased transparency and disclosure

Along with board assessment comes the need for transparency in board activities. Shareholders cannot assess what they cannot see. The NACD expects boards to disclose sufficient information to shareholders to enable them to assess whether the Board is functioning effectively.

What is sufficient information will vary from organization to organization. In larger organizations, what is material to the company’s functioning will be much greater than at smaller companies. But as the number of independent board members increases and there is less involvement of management directors (who presumably know what is going on internally), the amount of disclosure will increase.

  • Attention to a broader array of risks, such as cyber-attacks

It used to be that boards only needed to worry about the corporate balance sheet and CEO succession (and they could avoid the succession issues for years at a time). However, in today’s environment, cyber-crimes will only become more sophisticated, and every organization needs to consider its vulnerabilities, along with those of its suppliers and customers.

Now, not only must directors focus on financial threats, but other existential risks as well. These risks might come a wide variety of causes even beyond cyper-attacks—natural or environmental disasters, terrorism, and public relations debacles.

A good board of directors at any institution, large or small, thinks about these threats. Each organization will need to undertake its own risk assessments, then educate its board of directors about its conclusions.

* * * * *

Flickr photo from thetaxhaven on Creative Commons

Flickr photo from thetaxhaven on Creative Commons

Institutional investors at large organizations will continue to demand greater influence not only on financial strategies, but also on risk assessment and board member assessment. As these demands grow, shareholders at smaller organizations, including family-run companies, need to analyze what makes sense in their companies.

Furthermore, managers interested in developing themselves to be board members someday—regardless of the size of institution on whose board they might serve—would be well served to educate themselves in these areas of corporate governance. To be a serious candidate for any corporate board, an individual needs to be savvy about what shareholders expect in today’s environment.

What other corporate governance trends do you see? Which trends that I mentioned do you think are most important?

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When Is Mediation NOT a Good Idea?

handshakeI was recently scheduled to mediate a case, but the day before the mediation was to take place, the plaintiff’s attorney called to tell me the case had settled. What? I thought. Without me?

But from the parties’ perspective, this was the best result possible—the case was resolved and they didn’t have to travel to the mediation or pay me. In fact, I suspect that the scheduling of the mediation is what prompted the parties to get serious about settlement. So I believe I had an impact in the case as a mediator, even though I didn’t get paid a dime.

In what situations do parties to a dispute not need a mediator?

As a starting point, let’s look at what mediation is. Mediation is a process in which a neutral person (the mediator) assists the parties to a dispute in reaching their own mutually agreed upon resolution of their differences. The parties—not the mediator, nor the judge or jury in a lawsuit—decide the outcome of the problem.

Given this description of the process, mediation is not necessary when

  • The parties have already agreed on how to settle their dispute

At that point, there is no need for a mediator, although the parties might need an attorney to help them put their agreement into writing. Or if a lawsuit has been filed, they probably need attorneys to get the case dismissed. But a mediator is only of assistance when there is a pending dispute.

  • Both sides are able to discuss the matter rationally and emotion is not an issue

Of course, no one is ever completely rational and unemotional when a significant dispute is pending. But in many business disputes, the two parties (and/or their lawyers) can resolve the matter without the need for third-party intervention (such as a mediator).

This is what happened in the situation I described at the start of this post. The parties were perfectly able to negotiate without me, and they did.

  • The matter at stake is not subject to compromise or negotiation (although most disputes do involve issues that can be negotiated)

Sometimes, there is a matter of principle on which one party wants a court to rule, such as the constitutionality of a statute. While mediation might narrow the issues in such a case, it is unlikely to resolve the whole dispute. The parties, even with the aid of a mediator cannot resolve these matters of principle, where the result desired is bigger than the dispute between the specific parties to the case.

Apart from these situations in which mediation is not needed, mediation is also not appropriate when:

  • The parties don’t know enough about the facts yet

Sometimes mediation is attempted too early in a dispute. If both parties don’t know their own facts and evidence, then it is difficult for them to negotiate and reach agreement. But it is a good idea to attempt mediation prior to investing a lot of time and money into discovery of the other side’s position. Good mediators can draw out enough facts from the parties to define the contested issues and enable a reasonable settlement.

I would not rule out early mediation in a case, but I would advise parties to know as much as possible about their own position in the dispute. And I would encourage candor during the mediation itself. Hiding facts and evidence is not likely to improve the chances of a good settlement.

  • The dispute deals with the rights of someone who is not competent to enter into a legal agreement or physically or mentally unable to participate in the process

If one party is a minor or mentally disabled, then that person is not able to participate in negotiations without a legal representative.

Also, mediation can be a long, tedious, and frustrating process. If one party does not have the physical or mental stamina to participate, then either the mediator should make allowances in the timing of mediation sessions or mediation should not occur. It’s important to be upfront with the mediator about the parties’ capacity to participate in the process.

  • There is an overwhelming imbalance between the two sides

If one party holds all the cards in the lawsuit, it might be difficult to reach a fair settlement. A good mediator is skilled at dealing with imbalances of power, but it is possible that one side might feel pressured into accepting a poor settlement.

I am inclined not to forgo mediation when I sense an imbalance of power, but I might well stop the mediation if I sense the process is unfair. I would suggest that the parties get attorneys or family members to assist them, or I would recommend they let the case proceed to litigation. Thankfully, these situations are rare.

When has mediation helped you? When has it not?

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Celebrate “Be Kind To Lawyers Day” on April 12, 2016

gavelIt’s a surprising “holiday” but one we need—Be Kind To Lawyers Day, celebrated on the second Tuesday of April each year.

Most of us—lawyers included—enjoy a good lawyer joke. On Facebook just the other day, I found a Herman cartoon from August 13, 2010, depicting two divorce attorneys and their hapless client. (Click here to view.)

I admit that I chuckled when I read the cartoon, though many lawyer jokes strike me as tasteless. Kind of like blonde jokes.

Despite my own desire for more respect as an attorney, I was surprised to learn about Be Kind To Lawyers Day. There’s even a Be Kind To Lawyers website that explains the day as follows:

“INTERNATIONAL BE KIND TO LAWYERS DAY was established as a holiday celebrated annually on the second Tuesday in April. This date was chosen because it is strategically sandwiched between April Fool’s Day (April 1st) and U.S. Tax Day (April 15th).

So now lawyers of every stripe can be honored and treated like regular people for at least one 24-hour period every April.”

We all know some of the quotes about lawyers:

  • “The first thing we do, let’s kill all the lawyers.” – Shakespeare, Henry VI (though the character making this statement intended to eliminate the lawyers who might prevent revolution)
  • “He who is his own lawyer has a fool for a client.” – Anonymous

But have you heard the following:

  • “Nobody has a more sacred obligation to obey the law than those who make the law.”  – Sophocles (most lawyers I know follow this aspiration)
  • “Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough.” – Abraham Lincoln (the good lawyers I know agree with Lincoln)
  • “Law is nothing unless close behind it stands a warm living public opinion.” – Wendell Phillips (which is why some judicial opinions are not respected—public opinion is not close behind)

In my experience, the law is generally an honorable profession, and most attorneys are honorable people who try to do the right thing for their clients. It’s too bad we forget it so often.

Like most professions, it’s the bad apples who make the news. The lawyers who disobey the law or court rules. The lawyers who create causes of action to garner more in attorneys’ fees than the underlying dispute is worth. The lawyers who want publicity more than a good result for their client.

Still, I’m glad there’s a Be Kind To Lawyers Day. Here are a few suggestions on how to participate:

  • Take your favorite lawyer out for a drink or a meal (make sure you’re not being billed!).
  • Send your lawyer a “thank you” or “just because” greeting card, or send a gift of appreciation like flowers or fruit or chocolate.
  • Abstain from telling lawyer jokes for 24 hours. (You can do it!) If you can’t abstain, switch out the lawyer with your profession. It’s probably still funny.
  • Try to write up your own contract, Articles of Incorporation, or draft your own will. It’s harder than it looks.

Lawyers are helpful—even necessary—in a society based on laws. Show a little respect. Respect is what attorneys want most, even more than kindness.

What will you do on April 12 (or any day) to be kind to a lawyer?

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Politics in the Workplace: Should I or Shouldn’t I?

american-politics party imagesIt seems the Presidential campaign of 2016 has been going on forever, and we still have more than seven more months to go. For those of us in the workplace, every day is a minefield. Do we voice our opinions? Do we stifle others who voice theirs? Just like at the dinner table, politics and religion are difficult topics in the workplace.

1. What laws control political speech at work?

First of all, remember that the First Amendment does not apply to private employers. Employees do not have free speech rights that either for-profit or not-for-profit organizations have to recognize at the office. Therefore, private employers have a lot of discretion in how they address political speech and other expressions.

Indeed, political speech and activities, even away from the job, has cost even high-level employees their jobs. Remember that Brendan Eich was fired as CEO of Mozilla because of a political donation.

However, employer discretion does have limits. The National Labor Relations Act can permit political discussions and distribution of political materials in nonworking areas and on nonworking time.

Moreover, some state laws restrict what employers can do.  Some state statutes protect employees who discuss politics at work or who wear or display political symbols. Other states prohibit disciplinary action or other retaliation against employees who engage in political activities. And many states forbid employers from coercing political action or particular votes by their employees. It’s important to know the law in your jurisdiction.

One commentator has stated bluntly:

Most people have an opinion when it comes to politics. So should employers and HR managers keep such talk out of the workplace?

They can’t, experts say, since attempting to ban political discussions is not only illegal, but also impossible to enforce from a practical perspective. But employers still have a responsibility to make sure workers feel comfortable at work. And it’s a delicate balance, employment lawyers say, because one person’s free speech is another person’s loud-mouthed bullying.

See Political Debates in the Workplace: Where to Draw the Line, by Susan Milligan, published on the SHRM website on May 12, 2015. This may be an overstatement, but it’s worth considering. And it’s probably true in some jurisdictions.

Whatever the law, remember that employers can set productivity and behavioral standards. Even in states with limits on employer responses to employee political speech and action, an employer can discipline or discharge an employee for legitimate, business-related reasons. Therefore, if an employee engages in behavior that interferes with the workplace or with his job duties, or if the employee is disruptive or violates some legitimate work policy, the employer can take action.

As with most policy-oriented actions, however, employers are on firmer ground if they apply their policies uniformly, without any discriminating against any protected group or based on the employee’s party or other political persuasion or position. It is easy for political activity to get mixed with race, gender or religion, so claims based on these protected categories are quite possible, if an employer isn’t careful.

2. What should managers do?

Susan Milligan suggests the following three tips:

  • Set the tone from the top by making sure managers respect the views of others.
  • Encourage in-person interaction. Technology makes it tempting to communicate by email—another vehicle for heated political comments—but talking face to face is more likely to improve people’s behavior.
  • Establish a culture of civility. All discussions—including political discussions—should be respectful and should abide by the company’s anti-harassment and other behavioral policies

Having a written policy about political expressions (speech, apparel, buttons, and other symbols), is a good idea, so that employees understand what is and is not acceptable in that workplace. The policy should cover not only oral discussions but also written communications, such as email and social media. Furthermore, employers should respond to employee complaints about political disagreements, just as they would to any other complaints.

3. What should employees who want to be politically active do?

Find out whether your employer has a policy and what it says. Most employees will probably decide not to push the limits of what is acceptable during work hours.

We’re all in this for the rest of the year, regardless of our political opinions. A little respect and civility can go a long way, on this issue as on so many others.

When has an upcoming election or a political issue caused problems in your workplace?

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Suicide Prevention: Yes, You CAN Help

suicide prevention logoThis topic may sound grim, but the bottom line is that we can help our colleagues with mental health issues, if we know what to watch for and how to offer assistance.

I have been fortunate not to have anyone close to me commit suicide, though I have known professional acquaintances who killed themselves and I’ve had several friends who have been devastated when a loved one committed suicide. I’ve known many people who have suffered depression. Some have received treatment, and others have not. The problems of depression and suicide are real in any workplace, and perhaps especially in the legal profession.

I attended an American Bar Association CLE program last week on the topic of suicide prevention in the legal profession. My purpose in attending was to obtain the Ethics CLE hours I needed to maintain my bar license. That purpose was fulfilled, but I was struck by how susceptible lawyers are to depression and suicide.

  • Lawyers are 3.6 times more likely to suffer from depression than non-lawyers.
  • Lawyers rank near the top in professions in incidence of suicide. Suicide is the third leading cause of death among attorneys.
  • 20.4% of law students have thought seriously about suicide sometime in their life, compared with 5% of all graduate students
  • 20.6% of attorneys admit to problematic drinking, compared to 11.8% in a broad, highly educated workforce

The problems of mental illness and suicide in the legal profession are serious. Yet attorneys are not likely to seek help. Attorneys are often perfectionists, and their very perfectionist tendencies both cause them to be more prone to depression and less likely to seek help. Lawyers worry about privacy and confidentiality concerns. They wonder if they will lose professional status and the ability to obtain and retain clients.

Many years ago, I worked with one attorney who shut himself in his office every day for about six weeks. He said he was writing the definitive brief on a particular issue for a case he had. Yet he closed himself off from all his other work and from the rest of his colleagues. This man and his wife had recently separated, and I now realize he was exhibiting classic symptoms of depression.

There are many physical and behavioral signs of depression. Some common signs include

  • Physical: high blood pressure, chest pains, rapid heartbeats, headaches, and/or fatigue—all physical symptoms of many diseases.
  • Behavioral: more rapid speech, less conversation, isolation from contact with coworkers, weight gain or loss, erratic or changed schedules, disheveled clothes or lack of bathing, or other unusual behavior in the workplace.

When you work with someone regularly, you know when they are not behaving normally. As the commentators in the ABA program said,

“When you know a person, you know what is normal and what is not normal.”

So, what do you do if a colleague is acting oddly?

If you notice a colleague acting oddly—abnormally—then talk to him or her. Don’t be afraid to be direct in asking if the person is thinking of harming himself or herself.

Risk factors for suicide include:

  • Previous suicide attempt (particularly if there has been more than one)
  • Substantial psychiatric problems
  • Alcohol or substance use
  • Resistance to accessing mental health treatment

Ask about these things in particular.

Not everyone with these risk factors will try to commit suicide. But there are warning signs. The ABA program gave this list of warning signs that someone may be seriously contemplating suicide:

  • Ideation — They have thought of suicide and may have a plan
  • Substance use — They are drinking or self-medicating more (with legal or illegal drugs)
  • Purposelessness — They feel their life has no meaning
  • Anxiety — Their anxiety feels overwhelming
  • Trapped — They feel trapped by their circumstances, unable to see a change
  • Hopeless — They feel hopeless
  • Withdrawal — They are withdrawing from friends and family and activities they enjoy
  • Anger — They feel anger, perhaps irrationally
  • Recklessness — They act recklessly, not caring about harm to themselves or loved ones
  • Mood Change — Their mood is atypical for them for a sustained period

If you know someone with these warning signs, find a way to get them talking. “How is your day going?” is a good opener.

Of course, it helps if you regularly solicit input from your colleagues. An open, inviting workplace offers the best chance of knowing when someone is in emotional pain. The “How is your day going?” opener should not be reserved for coworkers who are possibly suicidal.

Then, when a friend or colleague opens up to you, don’t just give them a pep talk, but really listen. Don’t minimize their concerns, but do express concern and offer assistance. People who are suicidal will not respond to “I’m sure things will get better.” They cannot hear that, and they need help. Let them know you care. Let them know you will get them professional help.

Have resources at your fingertips to call if the problem seems serious and immediate.

Resources that all professionals and managers should have available include the National Suicide Prevention hotline (in the U.S., the number is 1-800-273-TALK).

If you’re in the legal community, know your state’s lawyer assistance program number; it can be found from the American Bar Association link to each state’s site.

Know what resources your company or law firm offers, and have the Employee Assistance Program number handy. Have the number of a local emergency room available.

You can help by offering to stay with them while they call a hotline or your local Legal Assistance Program. Or take them to an Employee Assistance Program counselor.

If you are talking with the person over the phone and not with them, but are seriously concerned about his or her safety, do not hesitate to call the local police and ask them to make a well-being check.

The ABA program I attended was a good reminder for me that we need to watch out for each other in the workplace. When I mentioned this ABA program to a friend of mine in the military, he said that he had attended similar training through the military.

The advice he received was the same that the ABA stressed — ASK! Communicate with your colleagues. Be direct in asking if they are thinking of harming themselves. If they say yes, take action.

Excellent advice for all of us.

What training have you had in suicide prevention? If you have additional tips, add them in the comments below.


Filed under Human Resources, Law, Management, Workplace

Favorite Firing: Too Soon and Too Late—Two Examples of Potential Retaliation

MP900302921Retaliation charges now make up the most common type of discrimination charges filed with the Equal Employment Opportunity Commission, and the number of retaliation charges grew at 5% in fiscal year 2015. The situation is no better with complaints filed with civil rights agencies at the state and local levels.

Two recent cases illustrate the problems employers face managing employees who might file a retaliation claim. Adverse actions against an employee at any time after the charge is filed—whether too soon or too late—can both land an employer in hot water.

Baker v. KCI Technologies, Inc., (S.D. Ind., January 27, 2016):

The Facts: In the first case I’m profiling, a female employee, Alaina Baker, worked as an Environmental Scientist for KCI Technologies. After she complained internally about compensation, recognition, and promotional issues, Ms. Baker filed a charge of sex discrimination with the Indiana Civil Rights Commission. The company then investigated whether her concerns could be resolved to enable her to work as an effective manager. During the investigation, Ms. Baker told the Vice-President of Human Resources that she was not comfortable in her current situation and did not want to remain with KCI Technologies if nothing was going to change.

The company offered Ms. Baker the choice of a mentor or a severance package. Ms. Baker indicated that she didn’t think a mentor would help. Her employer then offered her another severance package, but she rejected that offer as well. KCI Technologies fired Ms. Baker, even though she had no record of job performance or disciplinary issues, because the company decided her antagonistic relationship with her supervisor would probably harm the business’s relationships with its customers. Ms. Baker then filed a claim for retaliatory discharge.

The employer filed a motion for summary judgment, which the District Court denied. The Court found that “a causal connection might very well exist between the filing of Ms. Baker’s discrimination complaint and her termination a mere three months later.” It should be noted that this decision was not a determination on the merits, and it is possible the employer will ultimately prevail, but the facts were sufficient to withstand a motion for summary judgment.

The Moral: It appears that KCI Technologies acted too soon. The company might have been better served to see how Ms. Baker performed over time. She might have caused problems with customers (their fear), but she might not have. By acting as precipitously as it did, the employer opened itself up to increased risk in the litigation.

Of course, every employer will have to weigh for itself whether acting to avoid harm in the workplace is more or less costly than the cost of litigation.

Johnson v. Lemonds, (M.D.N.C., February 4, 2016):

The Facts: In the second case, Paula Johnson had filed claims of age, disability, and genetic information discrimination against her former employer, Earth Angels, which was owned by Sandra Lemonds. Ms. Johnson had worked as a home health worker for Earth Angels.

Many months later, but while these claims of discrimination were still pending, Ms. Lemonds contacted Ms. Johnson’s subsequent employer, Kesler Home Care Services. She also visited the home of the new client for whom Ms. Johnson provided care. Ms. Johnson alleged that Ms. Lemonds’s contacts were retaliatory in nature, and that they caused the client to fire her—which led Kesler to fire her, and Kesler also fired her fiance and daughter who also worked for Kesler.

Defendant Lemonds filed a motion to dismiss based on insufficiency of the facts stated in the complaint. The federal magistrate overruled the motion. Based on what Ms. Johnson had alleged, the magistrate found that she had adequately stated a possibility that the underlying complaints of discrimination had caused the calls and visits to Ms. Johnson’s new employer and her later termination by Kesler.

Although a long delay between protected activity and adverse action tends to negate the inference of discrimination, the Court did not find that to be true in this case. The fact that seven months had passed since Ms. Johnson had filed her original complaints did not preclude a finding of retaliation. In fact, Ms. Johnson alleged that Ms. Lemonds took the earliest opportunity she could to retaliate.

Once again, the defendant has not lost everything, because this ruling was on a motion to dismiss, not on the merits. But the defendant faces a lengthy lawsuit.

The Moral: In this case, the defendant’s delay in acting for several months post-filing of the discrimination complaint was insufficient to rebut a retaliation claim. Waiting lengthy periods may negate an inference of discrimination, but it will not overcome it as a matter of law.

Putting it all together:

Defendants face a tricky situation in managing an employee once a claim of discrimination is filed. Any subsequent adverse action—regardless of the timing—increases the risk of a retaliation claim.

An employer is best served by demonstrating extreme patience in documenting an employee’s performance issues, by insuring that there are comparable employees treated the same as the plaintiff, and by providing the employee with multiple opportunities to improve (unless the situation poses a danger to the employee or others).

How have you managed your way through possible retaliation claims?

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Beyond Integrity, Leaders Need Ability and Persuasiveness

sekulic-Vetta-Getty Images

Sekulic-Vetta-Getty Images

Last week I wrote about the importance of leaders having integrity. It’s a baseline that followers must feel they can trust their leader. But we’ve all known people of great moral fiber whom we wouldn’t follow anywhere—they don’t have other critical leadership attributes. So integrity is a foundational leadership competency, but insufficient by itself for success.

While other writers might group leadership competencies differently, in my mind, leadership requires skills in two main categories—ability and persuasiveness. In turn, ability comes in two forms—(1) knowledge of the enterprise, and (2) strategic skills and visioning.

Here’s what I mean by these categories:

1. Ability: Knowledge of the Enterprise

The first ability leaders must have is specific knowledge of their own enterprise. Most people begin their careers as tactical workers. They handle specific tasks. If they are successful in the minutiae of a role, they get bigger jobs. They begin to learn more about the organization in which they work.

To lead the organization, they need to understand how its parts fit together—its internal workings. They also need to understand the organization’s place in the world—its suppliers, its customers, its economic and political and social environment.

Over time, as employees’ jobs become broader, their roles become more integral to shaping the organization, rather than carrying out its daily work. Some people make the transition well, others do not. To be successful as a leader, this transition to systematic thinking is critical.

How, then, do leaders who move into a new organization at the top learn about the workings of their new enterprise? Quickly, one hopes. And some are successful, and others fail at this initial critical responsibility. This is why so much is written about the “first ninety days” of a new leader’s assignment.

While they are learning about their new organization, transplanted leaders must rely on their more general strategic skills and visioning, as described in the next section.

2. Ability: Strategic Skills and Visioning

Many of us remember President George H.W. Bush’s reference to “the vision thing.” The Senate bio of this President called vision “a clarity of ideas and principles that could shape public opinion and influence Congress”, and says that he was criticized for not having it.

Business and non-profit leaders need to have “the vision thing” just as much as political leaders do. They need to know where they want to take their organization. And along with vision, they need to have and idea of the strategies that are likely to get them there successfully.

As described above, leaders must see how the parts of an organization fit together and how the enterprise relates to the world around it. They must understand what is working and what isn’t in the current environment. They need to see the threats to the organization and how it must evolve to increase its effectiveness in the future.

As the TechTarget website states:

“Strategic management is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives.”

And defines strategic management as:

“The systematic analysis of the factors associated with customers and competitors (the external environment) and the organization itself (the internal environment) to provide the basis for maintaining optimum management practices. The objective of strategic management is to achieve better alignment of corporate policies and strategic priorities.”

So leaders who have a vision must be able to put that vision put against the real world—both inside and outside the organization—and understand how to get from here to there. These skills are applicable to any enterprise, though the details are specific to the particular organization at hand.

3. Persuasiveness

The other critical competency for leaders to have is strong communications skills, so that they can persuade people to follow them. There are many communications styles that can be effective, from charismatic to quiet, but the important thing is that others in the organization be convinced that the leader knows what he or she is talking about and has a strong sense of where the enterprise should be headed.

Leaders must be able to work with people both up and down the organization. Even executives have people to whom they are accountable, and they must be convincing to these stakeholders inside and outside the organization. Middle managers spend even more of their time working up and down the enterprise, as well as developing their strategic abilities.


I hope it is obvious that all these competencies work together. Integrity helps to persuasiveness, as do knowledge of the enterprise and a strong vision for the future. A powerful vision cannot be developed without specific knowledge of the organization.

When have you worked for a leader who had it all—integrity, ability, and persuasiveness?

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