I attended an Australian Institute of Company Directors lunch recently where the topic was board issues for 2013. As I listened to three prominent business leaders talk about what's on their radar for the year, I was left wondering about what wasn't said, as much as about what was.
Topics raised included governance, civil unrest, regulation, growing shareholder value, diversity, risk management, the Australian dollar, the election and so on. However, there was very little discussion around long term planning and strategic direction. Certainly it was mentioned, but only very briefly.
Leadership and strategy I know to be key concerns for boards, and when you look at the leadership tenure figures, the average CEO tenure in ASX100 companies is currently 3.9 years*. This is just a fraction longer than a Federal Government term.
It seems to be quite a short period of time in which to set a strategy, implement it, roll with the punches and achieve some major targets. You only have to look at how much of a struggle it is for a Federal Government to do that.
So the questions I ask are these:
- Are we becoming too focused on the short term, the 100 day plan etc?
- If so, what does this do to organisational stability, staff engagement, productivity and finally, brand stability?
- What is happening at CEO level that makes tenure so short? It's clearly not an easy job, but with an average like this it makes you wonder if they are being run too hard.
- Clearly we live in a world of constant change, however with that change, do we communicate in meaningful way, or has it all just become noise? What are the implications of that?
Have a think about how you manage your own sustainability. Do you push yourself till you fall over or do you pace yourself.?
The GFC, the avalanche of social media, the pace of life and a fear of the future have created inertia and paralysis. The circus of our federal politics haven't helped as it adds further drama and noise. I believe that to some extent people have tuned out.
This paralysis creates problems at all levels in business, disengaged staff, poor productivity, communicating and executing a strategy. It takes a toll. Perhaps that is what business leaders are battling against and why it's so hard to make a lasting impact.
The challenges presented by an ever complex world remain, however sometimes just taking a step back and assessing the situation before launching a new strategy can reap rewards and help with engagement and implementation. Because after all it's great to have ideas, but ideas are nothing without implementation.
I'm curious to hear your thoughts on this and if there are other issues that should be high on the priority list for boards this year.
* according to 2012 Goldman Sachs report - CEO turnover: implications
of declining tenure and longevity risk