2020

Issues 21

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BoardWorks International
Issues 21, 2020

pitcher

Is It Time to Intervene – Has Your  'Pitcher Been in The Game Too Long'?

I was reminded recently of a board of a very successful organisation, one of the largest in its sector that was under attack from several of its most influential stakeholders. In briefing me to work with the board, its chair gratefully acknowledged the board's debt to its chief executive who had built the organisation up from nothing. However, despite the chief executive's past success, it had become increasingly apparent that he did not have the competencies that the board now needed. I subsequently discovered that although individually, board members had become increasingly anxious about this, the board as a whole had never discussed the need for a leadership change. It now had to deal with the consequences of that.

It was coming across an article by Jeff Weiner, written in 2014 when he was the chief executive of LinkedIn, that reminded of this situation. (1) He referred to the most valuable lesson he had learned as a CEO:


          Don't leave the pitcher in the game for too long.

In explanation, Weiner described how a baseball team's star pitcher was showing signs of tiring towards the end of a game. His pitches were becoming slower, and he was losing control of a game in which his team had been comfortably ahead. When the coach checked how he was feeling the pitcher's response was confident and explained away the errors he had begun to make. Nevertheless, his performance continued to fall off, and his team lost the game.

This baseball scenario can be applied to a range of team sports but is also applicable to manyboardroom situations. It was directly relevant to my client's dilemma; a chief executive is perhaps the most obvious equivalent to the star pitcher. They have pitched a great game right up to the previous innings, but now, all of a sudden, their skills and energy levels are no longer up to the needs of the organisation they head. Perhaps, they are no longer in the job for the right reasons, and their changed motivation reflects in their declining performance.


We have also seen board chairs who present as a star pitcher problem. Boards experience deteriorating board chair performance in many different ways: ineffective leadership of board meetings and embarrassing behaviour in representing the company publicly, being but two of these. Declining chair performance also has a direct impact on chief executive motivation.

The starting assumption by those faced with a star pitcher challenge is that the process of removal will be painful. This has boards procrastinating, hoping everything will come right. And sometimes it will. A deterioration in chief executive or board chair performance may be temporary. There may be personal circumstances that momentarily drain their energy or distract them in some way.

However, as most of us have learned over the years, hope is not a good strategy. These situations tend to throw up a range of realities that boards must eventually confront. More often than not, the deterioration in performance continues, and replacement becomes inevitable.

Ideally, boards would like to arrange for a leadership transition in their own time, in a measured and relatively transparent way. Too often, however, standing down someone who was once a star performer is a rushed and unhappy process, forced on everyone involved. In the case I referred to earlier, an ultimatum from a significant funder triggered the board into firing the chief executive, an action which as far as the chief executive was concerned came 'out of the blue'.

Unfortunately, because a departure like this is, by definition, unplanned and often abrupt, it can be a very messy and unpleasant business. It is also likely to be expensive in a variety of ways, and not just financially.

So, the question is 'why does it take a board so long to admit the uncomfortable reality and take action? In my experience, there are three primary reasons.

1. Reaching a collective consciousness that replacement is necessary is an easily drawn-out process

Boards make decisions collectively. The ideal – particularly concerning big decisions - is to reach these by consensus. I have heard directors opine that the first question at every board meeting should be do we have confidence in our chief executive? In over 30 years in and around boardrooms, I have yet to come across a board applying that routine. In any case, I would predict that answers would reveal diverse positions that would be difficult to reconcile, at least initially.

On most challenging decisions, it takes time for a board to align its thinking. This is partly because a board meets relatively infrequently and usually with a full agenda of other matters to deal with. However, a star pitcher problem does underline the importance of a board spending part of every meeting without executives present. 'Board only time' serves many purposes, including an opportunity to raise such a question.

Reaching a collective view about the need for action is even more difficult if directors are taking aim at the chair. That is likely to be a somewhat clandestine process which again takes time. As the demands of the COVID-19 pandemic have taught us, however, directors don't all need to be physically in the same room to explore critical issues.

2. There is a fear of the target's reactions

There is often a reasonable fear of hurting someone who has made a significant contribution and been a valued colleague, perhaps even a close friend. Because it's hardly likely that chief executives or board chairs will be 'shrinking violets' there is also a fear of being hurt back. Few chief executives or board chairs get to their positions by lacking confidence or displaying doubt in their ability. Consequently, many boards start a replacement process in the expectation there will be strong resistance from the incumbent. Also, that this will probably be backed up by supporters and (for chief executives, at least) heavyweight legal representation.

It is also likely that in the back of some people's minds will be the thought that an unsuccessful coup may backfire on them. Suppose (as is typical) there has been inadequate performance feedback to prepare the ground for change. In that case, there could well be a startled and highly emotional reaction which could play out in an undisciplined and very public manner. As well as reducing options for resolution, this kind of response can cause significant reputational harm to both the organisation and the individuals involved.

Many boards find little incentive to ensure there is a robust performance management process in place while things are going well. Or to consider a scenario in which the board's actions might be reviewed in court.

3. Fear of 'what's next'

Regarding the replacement of a chief executive, the absence of an obvious successor or at least some form of emergency succession plan often sees boards being hesitant to act. They fear how difficult it will be to replace the individual. They also worry about how other people the chief executive has been working with will react - might they leave in sympathy? Unless there is an obvious successor internally, boards also have a well justified fear about the time it will take for a permanent replacement to be recruited and get up to speed. In that regard, it has been interesting to see boards that were likely on the cusp of precipitating leadership change before the onset of the pandemic. At least one I am familiar with put their replacement thinking on the back burner because mixing a leadership change with management of the crisis was a step too far.

Conclusion

It is often said there is only one really important decision a board has to make – to appoint an excellent chief executive. The trouble is that some boards take that notion a step too far – they think of it as the only decision they have to make. The star pitcher scenario tells us that almost as soon as it makes the appointment, the board needs to start thinking about what a managed and successful succession process will look like.

I would also argue that the appointment of the board chair is equally important. An ineffectual chair almost certainly guarantees an ineffective board. With a weak board, the odds of eventual chief executive failure increase by many orders of magnitude.

Notes:

(1) Jeff Weiner. 'The Most Valuable Lesson I've Learned as a CEO'. LinkedIn post, 4 February 2014

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