Month: November 2020

16. Mohamad Ali, the CEO of IDG, Inc., on learning to be a good board member and the importance of giving back

Mohamad Ali is the CEO of International Data Group (IDG, Inc.), a private technology media, events and research company. He has also served as CEO of a publicly traded company and has served on many public, private, and nonprofit boards. In this episode, Mohamad shares what he has learned about being a good board member as well as the intricacies of boards through his wide range of experience on both the board and company leadership sides. He also integrates the importance of giving back and the support he received after moving to the United States as a child.

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Links

https://www.idg.com/

https://twitter.com/mhsali

https://www.linkedin.com/in/alimohamad/

Biography

His bio is available here: https://www.idg.com/about-idg-inc/

Mohamad Ali was appointed Chief Executive Officer at International Data Group, Inc., the world’s leading technology media, events and research company, in July 2019.

Prior to this role, Mohamad was CEO of Carbonite, a publicly traded data-protection and security firm, where he grew the company’s revenue four-fold, to more than a half-billion dollars in four years. Before that, Mohamad served as Chief Strategy Officer at Hewlett-Packard where he played a pivotal role in the company’s turnaround and led the decision process to split HP into two companies. At IBM, Mohamad acquired and integrated various companies to create the firm’s $8 billion analytics software unit. At Avaya, he oversaw the $2 billion services group and served as head of the company’s research labs.

Mohamad holds a B.S. in Computer Engineering, a B.A. in History and a master’s degree in Electrical Engineering, all from Stanford University. He serves on the board of iRobot (NASDAQ: IRBT) and was previously on the board of Carbonite (NASDAQ: CARB) and City National Bank (NYSE: CYN).

Mohamad was honored as 2018 CEO of the Year by the Massachusetts Technology Leadership Council, was a member of the 2018 Public Board of the Year by The National Association of Corporate Directors New England, was named a 2011 All-Star by Massachusetts High Tech magazine, was named a 2008 40 Under 40 honoree by Boston Business Journal, and was a finalist in America’s prestigious 1988 National Science Talent Search.

Article: “I am Living proof of the American Dream”

Quotes

Onboarding

I think one of the most important aspects of onboarding isn’t actually the content that you learn, but the personal dynamics of the board and the board. It could be 8 people, it could be 18 people but it’s a small number of people of often very high caliber people with very strong opinions…how you onboard someone culturally onto the board is a very important thing.  That’s something I’ve seen done poorly and it’s something I’ve seen done well.  We spend so much time and money with recruiters getting the right skills, doing the skills matrix and so forth and then, once the person’s here, that’s kind of when the hard work starts.

What’s the best thing a board can do when a CEO has a major challenge, or the company is in a crisis?

Great question, because in some ways we’ve all been there in the last six or nine months.  I would say that if you have a good CEO and the CEO has a good management team, probably one of the most important things is be supportive of that team, be available, be engaged, but be supportive… if you have a good CEO and there’s a crisis, you hunker down together.

Big Ideas/Thoughts

What was impactful in the path leading to your success as you were growing up

I’m one of the lucky ones to have gotten all the opportunities that I have gotten and to where I am today.  It wasn’t just my mom and my dad that encouraged me because they were new to this country.  they didn’t know how to navigate it.   There were people who went out of their way to help me for really no gain to them.  There were two school teachers in particular, in the public school system that showed me the way and guided me and eventually I ended up at one of these elite public schools where you have to take a test to get in and that launched me on my way to Stanford and my career.  Without these two people, who out of the goodness of their heart just decided to help me, I don’t think I would be here today.  I always try to keep that in mind when I look at where I am and I think all of us are wherever we are, whatever success we’ve had, it’s because other people have helped. I think it’s really critical for us to all give back.

First Board Experience

My first board experience, I would have to say that I really didn’t know anything about boards, so it was very much a learning process for me.  One of the things that I did was just first assume that I didn’t know anything about how boards work and that they had brought me on board for a specific reason. That’s where I focused my time, helping them determine how to sell the company.  Then the other thing that I did was I observed, I watched what the other board members did.  I asked and I learned – there were several really great people on the board who were willing to teach me.

Learning what works for Boards by observing what doesn’t work

I’ve seen a lot of things work.  I’ve also seen a lot of things, not work and that’s really important.  We all talk about how failure is a really important component of education and learning and it really is.

How serving as a CEO has helped him as a board member

It’s tremendously helpful actually.  In some ways, it allows you to relate with a lot more credibility to the CEO. It’s not that other board members who haven’t been a CEO aren’t credible, but in the eyes of the CEO of the company, I think knowing that a board member has been CEO and has been through the pains of being CEO, been in the trenches, has had to navigate the landmines that CEO deals with, it goes again beyond the technical aspects of the role and more to the emotional connection, and understanding that is shared with CEO

Board Composition and offboarding

One of the things that I’ve seen done at multiple companies where I’ve been on the board is the use of a skills matrix and the skills needed to the company changes periodically, the use of the skills matrix has been very helpful.  For example, at iRobot, we do a skills matrix every year and we publish it as part of our SEC filings and it gives the board an opportunity to discuss what we might want to change, in short term, medium term, long term and all the board members are part of that discussion. It’s not just transparent to our board members, but to all of our investors.

Diversity on boards

I see progress, but not enough.  One example is that a few years ago there was a target of getting 20% women on boards.  We’ve met that target, but if you think about it, it’s only 20%, it’s not 50%.

M&A

Most M&As, or a significant number of M&A transactions, ultimately don’t meet the goals or produce the value expected. So where is the disconnect in this if two parties are really trying to do the right thing?

There is a three-letter answer to that and it’s ego, right? So, 75% of all transactions fail to meet their business cases. The good companies, the companies that know how to do M&A well obviously perform much better than that, because they do it for the right reasons.

Transcript

Joe: [00:00:00] Hello and welcome to On Boards: a Deep Look at Driving Business Success. Hi, I’m Joe Ayoub and I’m here with my co-host Raza Shaikh.  On Boards is about boards of directors and advisors and all aspects of board governance.  Twice a month this is the place to learn about one of the most critically important aspects of any company or organization – its board of directors or advisors.

Raza: [00:00:25] Joe and I speak with a wide range of guests and talk about what makes great boards great or makes boards unsuccessful, what it takes to be a valuable member and how to make your board one of the most valuable assets of your company.

Joe: [00:00:42] Our guest today is Mohamad Ali, Chief Executive Officer at International Data Group, the world’s leading technology, media events and research company.  Prior to this role, Mohamad was CEO of Carbonite, a publicly traded data protection and security firm, [00:01:00] where he grew the company’s revenue fourfold to more than a half a billion dollars in four years.

 Raza: [00:01:05] Mohamad has also served as Chief Strategy Officer at Hewlett Packard . In 2018 he was honored as CEO of the year by the Massachusetts Technology Leadership Council and he was named member of the 2018 public Board of the Year by the National Association of Corporate Directors, New England.

Joe: [00:01:26] Welcome Mohamad, it’s terrific to have you today with us as our guest.

Mohamad: [00:01:30] Thank you, Joe. Thank you, Raza.

Raza: [00:01:32] Before we talk about your work as a board member and CEO Mohamad, we wanted to briefly talk about the article in Medium that appeared in 2018 entitled “I’m Living Proof of the American Dream.” Can you talk a little bit about your journey with your family from Guyana to American citizenship, to your successful career?

Mohamad: [00:01:54] Sure. Sure. So that came out of a [00:02:00] speech I gave at the John F. Kennedy Library at a naturalization event for several hundred new citizens and so I thought it was appropriate to talk about the American Dream at such an event, that became the the article that you mentioned.

This was in 2017 and I think it was important to talk about the American Dream then, but the context for the American dream today, I think is different in that over the last few years, I think we’ve seen more and more threats to those pursuing the American Dream. And I think it’s really important for us all to realize that with the exception of the native Americans here, we’re all immigrants and this is a country that is built on immigrants and immigration. And, we’ve really always been [00:03:00] welcoming to immigrants who want to come here and pursue the American Dream. It’s great that you, bring up the article, but, but I feel like the context is different and I want to underscore that

 To your point I did grow up in, I was born in Guyana, which is a little country near Venezuela in South America.  A lot of people don’t know where it is, that’s one to add to your list of things. I moved here when I was 11 and I have to say that, I’m one of the lucky ones to have gotten all the opportunities that I have gotten and to where I am today.

Raza: [00:03:35] Mohamad what were the factors that were impactful in your path to the success that you’ve had?

Mohamad: [00:03:45] Yeah. I would say that there were multiple, but there are two in particular that I’ll underscore. Think my mom who was a school teacher in Guyana, always felt that the path to a better life was education [00:04:00] and my mom really believe this because she grew up very poor.  She was very young, a kid, she worked in the rice fields. She couldn’t afford shoes and she worked very hard to become a school teacher and felt that education was really important. That’s one of the things that now that I’m a CEO and I have means I try to support others to come through the education path. 

The other thing that I feel was important for me is that it wasn’t just my mom and my dad that encouraged me because they were new to this country, they didn’t know how to navigate it.  I would say that there were people who went out of their way to help me for really no gain to them necessarily and there were two school teachers in particular, in the public school system, that sort of showed me the way and guided me and eventually I ended up at one of these elite public schools where you have to take a test to get in and that [00:05:00] sort of launched me on my way to Stanford and my career.  But without these two people, who out of the goodness of their heart just decided to help me, I don’t think I would be here today.  I always try to keep that in mind when I look at where I am and I think all of us are wherever we are, whatever success we’ve had, it’s because other people have helped. I think it’s really critical for us to all give back as a result.

Raza: [00:05:27] What a great story Mohamad. I can also be a testament to that, myself being an immigrant and I know that there have been so many people that have helped me on this journey.

Mohamad: [00:05:39] Yeah. So true.

Joe: [00:05:40] It’s great that you acknowledge the mentors and the importance of mentorship, because I think we all have an opportunity to serve that function at times and it’s just great to keep in mind how incredibly important it can be to the people that you help.

So let’s go back. I’d like to hear about your first board experience. How did it [00:06:00] come about and what did you learn about being a board member from that first experience?

Mohamad: [00:06:05] Sure. Yeah, that’s right. This podcast is about boards, so we should at least talk about them right.

Joe: [00:06:10] We should.

Mohamad: [00:06:11] My first board experience was at a very small company called Ember and Ember was a Silicon company. They made a wireless technology, a chip and the chip a standard called ZigBee. It was used in things like power meters and so forth, things that like where you needed the battery to last years, because you just don’t want to replace them and the bandwidth was low. So this was the perfect application for this new technology called ZigBee.

I think it was in some ways it was quite accidental. At the time I was working at IBM in the semiconductor division and so I had developed sort of a deep knowledge of this space and at the time they were looking and I [00:07:00] done a lot of M&A in semiconductors. So they were looking for someone to join the board to help guide the exit process for this company and so, I was in the right place, at the right time. And, I joined the board and, I would have to say that I really didn’t know anything about boards, so it was very much a learning process for me.

Joe: [00:07:22] Was there an onboarding process where people helped you ?  How did you learn from that first experience?

Mohamad: [00:07:31] A lot of companies have very robust onboarding processes , especially public companies like iRobot and Carmen and so forth but this was a startup, it was a small company.  And I think at the time it was about $30 million, but it was still,a VC backed company and the onboarding process, wasn’t that robust, understandably, but there were really great people on the board.

I think one of the things that I did was just first assume that I didn’t know anything [00:08:00] about how boards work and that they had brought me on board for a specific reason. That’s where I focus my time, helping them determine how to sell the company.  Then the other thing that I did was I observed, I watched what the other board members did. I asked and I learned. I’ve seen cases where first time board member has come on board and try to dominate the conversation, presumptively assume they knew how boards work and those situations are just not good situations. And part of it was maybe I was very young at the time and, it was, like I knew that I didn’t really know anything. So I didn’t, I wasn’t disruptive.  I sat there and I learned, but there were several really great people on the board who were willing to teach me.

Joe: [00:08:44] Yeah, really great point about when you’re first on a board kind of getting a feel for how it’s working and, what the culture of the board is before you dive all the way in. I think that’s important.  Since that experience, what experiences have [00:09:00] had that you think have made you a better board member?

Mohamad: [00:09:04] Now I’ve been on multiple boards. I’ve been on three public boards, several private boards, various size of the companies and when I worked at HP, I spent a lot of time with the HP board.  I would say experience in time. I’ve seen a lot of things work. I’ve also seen a lot of things, not work and that’s really important. We all talk about how failure is a really important component of education and learning and it really is. I would say just being on those boards, I’ve also gotten a chance to get formal board education participating in NACD events and other types of training and learning from other experienced directors.

Joe: [00:09:41] So I’m glad you acknowledged that actually mistakes are a great learning experience. Not everyone will, not everyone does.

Mohamad: [00:09:48] And I’ve made plenty!

Joe: [00:09:52] What are some of the things that you think you’ve learned from the mistakes that you observed over time?

Mohamad: [00:09:57] We talked a little earlier about onboarding [00:10:00] and I’ve seen that onboarding done well and I’ve seen it done poorly.  iRobot, I think the onboarding has really been excellent.  When I joined the board of the bank, the onboarding was excellent.  In some ways it had to be excellent because I didn’t know anything about banking.  They brought me in as sort of the technology guy.  I think I spent many hours and days and weeks being onboarded, but I think one of the most important aspects of onboarding isn’t actually the content that you learn, but the personal dynamics of the board and the board could be, it could be eight people, it could be, 18 people but it’s a small number of people and it’s also a small number of, often, very high caliber people with very strong opinions. Even after the formal onboarding process, I have seen, successful boards appoint a buddy to a new board member to bring them into the culture of the board.

[00:11:00] And oftentimes that’s the chairman or the lead independent director or the head of nom and gov or just someone else who offers to do that, but how you onboard someone culturally onto the board. I think is a very important thing and that’s something I’ve seen done poorly and it’s something I’ve seen done well.

Joe: [00:11:22] Well,  it’s a great point because companies spend a lot of time identifying and recruiting the right people onto their boards and to the extent that they fail to really put them in the best position to succeed by really onboarding them properly, I think it’s a great observation because it’s a waste of time and talent when you don’t do that but it’s not always easy to do.

Mohamad: [00:11:46] It’s very hard to do actually we spent so much time and money, with recruiters getting the right skills, doing the skills matrix and so forth. and then, once the person’s here, that’s kind of when the hard work starts.

[00:12:00] Joe: [00:11:59] Exactly right. You also have had the advantage if you will, of being a CEO of two companies. How has that perspective helped you as a board member?

Mohamad: [00:12:10] It’s tremendously helpful actually. In some ways, it allows you to relate with a lot more credibility to the CEO. It’s not that other board members who haven’t been a CEO aren’t credible but in the eyes of the CEO of the company, I think knowing that a board member has been CEO and has been through the pains of being CEO, been in the trenches, have had to navigate the landmines, that CEO deals with, it goes again beyond the technical aspects of the role and more to the emotional connection, and understanding that is shared with CEO. At least for me, when I’m sitting in that boardroom and I’m asking questions, [00:13:00] I also know that, the next day I’ll be on the other side and how would I, what kinds of questions what I want or how would I want to frame?

I think that helps me in my effectiveness. Having said that there are board members who have never been CEO, they’ve been CFO’s and CIO’s and other roles, and they are tremendously effective as well.

Joe: [00:13:22] Sure there are many paths to it, but I think probably one of the constants over time is that former CEOs successful CEOs can be phenomenal board members for that very reason you’ve stated. 

What’s the best thing a board can do when a CEO has a major challenge, or the company is in a crisis?

Mohamad: [00:13:43] Great question, because in some ways we’ve all been there in the last six or nine months. There’ve been, crises compounded in the last nine months.  I would say that if you have a good CEO and the CEO has a good management team, [00:14:00] probably one of the most important things of working do is be supportive of that team, be available, be engaged, but be supportive. I think if you don’t have a good CEO, then it’s going to be very different and the board may have to take some fairly radical actions, including potentially removing the CEO, maybe that’s something they should have known a long time ago, and this is the trigger you’re doing that.

I’ve been lucky in that I’ve gotten to work with some just tremendous CEOs. Russell at the bank was amazing.  Collin is just a great CEO.  Meg Whitman was a wonderful CEO.  I worked for her, but I supported her in the interactions with the board.

Yeah, I think if you have a good CEO and there’s a crisis, you hunker down together and that CEO at that time, really what they’re looking for is good ideas, good discussion, good engagement, and good support once you agree on what to do.

Raza: [00:14:56] But it’s still kind of in the way of not grabbing the [00:15:00] drivers wheel but fingers-out-nose-in kind of support that the board should provide at that time.

Mohamad: [00:15:09] Yeah, that’s right. I think we all know, the folks listen to this call have experienced being on boards and that our role is not management. We are not running the company,  we’re setting strategy. We ensure governance is there. We hire and fire the CEO and their responsibilities exclude actually running the company. Like I said, if we have a good CEO, you let the CEO run the company and you provide those governance, strategy, oversight type of input and if you don’t have a CEO and the board’s job is to go and get a good CEO.

Joe: [00:15:50] By background, you’re an engineer and I’m curious how much of that has had an impact on the kind of board member you have been.

[00:16:00] Mohamad: [00:16:00] Well, being an engineer has its pros and cons.  I love having been an engineer and unfortunately I try to play engineer well beyond my time horizon here.  I would say that it is helpful in that, when management brings forward a proposal, having some level of technical skills gives you, at least it gives me, a better ability to gauge the feasibility of some of these projects. Having not only been an engineer, but managing engineering teams and managing engineering projects at various levels, it gives me a sense of how to gauge the risk. Ultimately, in some ways the board is about assessing risk and what level of risk to take for what types of initiatives.

In that sense it’s good. What’s not good is when board members try to engineer the products you [00:17:00] see that often board members who used to be, it’s like myself, we have to pull ourselves back.

Joe: [00:17:06] No, I think you don’t have to be an engineer to a now and then realize you’re getting too far into the weeds, but on the risk side, it’s such an incredibly important aspect of what a board does assessing risk and determining how much risk the company should be taking. So, it sounds like that it’s more of a strength than anything else.

Mohamad: [00:17:26] I think it’s a strength, not everyone does.

Joe: [00:17:30] So one of the things that Raza and I have had many conversations about is offboarding, which seems to be one of the most challenging things for every board.  Even the best boards, even the best leaders. And I remember you sharing your experience with one company about how you did the off-boarding and I’d really be great if you would share that again with us because I thought it was really just a great approach.

Mohamad: [00:17:56] One of the things that I’ve seen done at multiple [00:18:00] companies I’ve been on boards at is the use of a skills matrix and the skills needed to the company changes periodically. When the company is smaller and younger it may need more visionaries or more technical skills or more something and as it gets larger and it becomes public it needs people with governance skills, it needs people with a public company experience and needs people with understanding of the SEC, of organizations like ISS and Glass Lewis. There’s a different set of skill as it becomes a global organization it needs people who have global experience.

Even for a large company, like an HP or a company of that size, these companies are changing as well and technology and the world’s changing around us. The use of the skills matrix is actually been very helpful because, for example, at iRobot, we do a skills [00:19:00] matrix every year and we publish it as part of our SEC filings and it gives the board an opportunity to discuss what we might want to change, in short term, medium term, long term and all the board members are part of that discussion.  I’ve found that has been one of the most constructive ways to do it and if you look at the iRobot board, we have actually had some very successful transitions over the years.

Joe: [00:19:26] I think it’s a phenomenal strategy.  I particularly like the fact that you do it every year, companies refresh their strategic plans every year. Why shouldn’t a board do the same thing because that in effect is what you’re doing. So I think that’s great. Thanks for sharing that.

Raza: [00:19:43] And publicly then filing it with your SEC filing. So it’s a bigger level of transparency.

Mohamad: [00:19:49] Exactly. it’s out there. It’s transparent. It’s not just transparent to our board members, but to all of our investors.

Raza: [00:19:55] Mohamad, in the current climate how do you see the progress in [00:20:00] increasing diversity, equity and inclusion at all levels of business, but in particular for company boards, how has that been coming along?

 Mohamad: [00:20:08] Yeah, no, that’s a great question and yeah, of course, very timely. so I mean, I. I see progress. but not enough. And, one example is that, a few years ago there was a target of getting 20% women on boards. And, we’ve met that target, but if you think about it, it’s only 20%. It’s not 50%.

With the recent heightened recognition of racial injustice we’ve seen boards move more aggressively to bring on blacks and Latinex onto their boards, but again, its highly underrepresented. I do see a positive trend, but you know I think we have a long way to go with respect to getting, true diversity on boards.

Raza: [00:20:55] We’ve been told like the pipeline is the problem, is that real or [00:21:00] yeah. Is that an acceptable excuse anymore?

Mohamad: [00:21:03] No, I don’t think it’s an acceptable excuse. I would say even maybe a couple of years ago, people felt it was a perfectly acceptable excuse that, hey, they’re just not enough diverse board members out there. There aren’t enough black men and women who can serve on boards and not just boards, like in any role and I think, people are coming to the recognition that, that there are qualified people out there. We just have to try harder to find them. And in some ways you hire who you know and for many people who don’t come from a diverse background, they don’t know a lot of people who aren’t diverse.

You come to this conclusion that there must not be out there. I’m on the board of Oxfam, which is a large charity and, I led the search process for the new CEO. The prior CEO retired after 20 years. [00:22:00] We hired Russell Reynolds. They did a really great job.

We made it pretty clear upfront that we wanted a diverse slate including women, blacks, Latinex, et cetera. and we got that. We were very lucky in that we had over 200 candidates. It was just incredible and we were able to hire a woman, who was the number two at CARE and we have to relocate her from Zurich to Boston, but we did that and she has just been tremendous.  I think the talent is out there and if you look at what she’s done within her own management team now, she’s a very diverse management team that includes, blacks, Latinex, Asian, a very healthy, gender diversity. So it was revealed was not only possible, but she got it done. So I think that excuse is now an old excuse.

Joe: [00:22:50] Do you think some of the momentum towards diversity is a recognition that it actually is financially [00:23:00] driven as well. In other words, it’s the right thing to do, but it feels like companies are starting to recognize that it is in their financial interest to do it as well.

Mohamad: [00:23:09] Yeah, it is in their financial interests and there’s this really great McKinsey study that correlates, diversity with EBITDA which is kind of interesting, only McKinsey would do that, but, and I believe it, and in the past I have used that as an argument for a more diverse workforce, more diverse board, et cetera.  But I have to say there are a lot of people who, don’t that is not necessarily a sufficient argument. I believe it. I think the facts speak for themselves, but I think you need multiplicity of, arguments and facts to get to diversity. I think the financial benefits are certainly one, but I think, a lot of executives I know are now starting to recognize that there is an ethical and moral aspect of this as [00:24:00] well and then I think the third piece of it is dispelling this myth that the talent doesn’t exist out there. And I think those three things, as they come into positive view here, does create an opportunity for us to increase diversity.

Raza: [00:24:16] Mohamad, you now lead a great technology company and technology seems to have experienced tremendous growth even in the pandemic or despite the pandemic. What should we expect where is technology headed? Is this boom kind of a bubble or technology’s there to stay for long. What do you see?

Mohamad: [00:24:39] Yeah. So your question about a bubble, oftentimes when we talk about a bubble of they’re talking about the stock market or the financial markets. I can’t really comment as to whether these tech stocks are over valued or not, but what I can tell you is that I don’t think this is a blip on the radar screen.

I think technology is here to stay.  I think [00:25:00] that, technology has been driving humanity for millennia, from the invention of steel, the locomotive, the telephone,to the internet. If anything that’s different is that the rate of change has just has increased dramatically and will continue to increase.

We’re obviously seeing technology and technology companies, but we’re also seeing, non technology companies become technology companies.  At IDG we have multiple businesses, we have the IDC business that’s really sort of a data and technology business, but we also have a media business, we have an events business, we have a demand generation SaaS platform, which is clearly a technology business, but that media business, there was a time when it was  on paper and today it’s all digital. and there’s a very sophisticated, backend that powers, our publications, like CIO magazine across the globe and, hundreds of countries and that has become a technology company. A lot of traditional industries are becoming technology companies. [00:26:00] I think it’s here to stay.

Raza: [00:26:01] I think, it was 2005 when the “software eats the world” article came out and I would bet, McDonald’s today and FedEx today is a technology and software company, ultimately. So I think that’s where it’s headed.

Joe: [00:26:18] Great point.

Raza: [00:26:20] Mohamad, you’ve been involved in the M&A world on many sides, and have seen a lot of transactions. What in your view is the board’s role in M&A for the enterprise? What should the board of the acquiring company be looking for? And if you switch the side, what should the board of the company being acquired be looking for?

Mohamad: [00:26:40] Yeah. So, the board has a big role in M&A, it is some of the largest strategic decisions that a company will make and the board has to be involved. And so, in the  companies that I’ve been involved in, either a CEO or as an independent board member, this [00:27:00] has always been a key element, 

For the company that you’re acquiring, if you are the acquirer, obviously you want to get, you want to acquire a company that is going to support the strategy that exists.  And then you also want to make sure that not only does it support the strategy, but it translates into financial benefits. I would say that it’s not very complicated, but the actual process and act of working with management to evaluate the M&A target, can be complicated. And then on the flip side, if you’re selling your company, you want your employees to go to a good home, but you also want to, maximize your value. And especially if you’re a public company you have a fiduciary responsibility to maximize the value in the sale. So yeah, I would say that, boards have an incredibly important role in M&A.  

Raza: [00:27:57] In this context, people also hear [00:28:00] that most M&As or a significant number of M&A transactions, ultimately don’t meet the goals or produce the value. So where is the disconnect in this if two parties are really trying to do the right thing,

Mohamad: [00:28:17] Yeah. There is a three – letter answer to that and it’s ego, right? So, 75% of all transactions fail to meet their business cases. So you say, why would why would you spend any money on an M and a, The good companies, the companies that know how to do M&A well obviously perform much better than that. And so I think it’s a, when I was at IBM, we used to, I used to have this philosophy that if a business was performing well, then, we would be more likely to do M&A, because they had a good leadership, [00:29:00] good business acumen, et cetera. And if a business wasn’t doing well, we weren’t going to try to fix it with M&A because we were going to create more of a mess and you see a lot of that, where businesses aren’t doing well and the CEO or the board think that, Oh, well, we’ll just acquire this company and all it’s going to be better. And there’s a lot of failure there. Right.

So, I think that  for successful M&A there’s a set of characteristics. If you have a successful business, you have good management team. I think that’s one, but then the other is, having the culture, the knowledge, the experience, do you know what I call sort of systematic M&A. You know, you’re constantly doing it. It’s part of what you do. you’ve learned over the years how to do it well. And, and unfortunately, there are a lot of companies where, it doesn’t succeed, but, yeah, M&A’s a really important tool in a company. It just needs to be done right.

Joe: [00:29:56] Are there particular skills and experiences, [00:30:00] in the board members that are especially helpful in an M & A

Mohamad: [00:30:06] situation?

Yes, board members who have been through a meaningful number of M&A transactions in their prior roles, can be very helpful. I think CFOs can be very helpful because oftentimes they’ve seen a lot of M&A, and they bring reality to you, to what’s sometimes called strategic benefits that you put can’t quantify, right.  So they make sure you’re able to quantify them.

So yeah, I mean, I think, prior experience with the M &A financial lens, or both, I think this is one where, especially for a technology company, The being an engineer, a piece of it comes back because you have to, oftentimes you have to assess the risk of acquiring other technologies. And, I have been involved in a lot of technology acquisitions now and, there are some where everything looked good [00:31:00] except, the, the technology you’re acquiring was just not scalable and you just ran out of steam and it would have been good to know that ahead of time. Right. Or at least have the board ask those types of questions ahead of that.

Joe: [00:31:12] Great.

 Mohamad. It’s been great speaking with you. Thanks for joining us today. I hope you and your family are well and staying safe.

Mohamad: [00:31:20] Joe, Raza, thank you so much for having me on the show.

Joe: [00:31:24] Thank you all for listening today. To onboards with our special guests, Mohamad Ali. Please stay safe and take care of yourselves,your families and your communities as best you can. Raza you take care. I hope you and your family also continues to be well.

Raza: [00:31:41] Yes Joe, we’re all where we’re all staying safe. Thank you, and I hope, the same for you and your family.

Joe: [00:31:46] Thanks. Take care.

15. Dede Orraca-Cecil on what it takes to build a company board and find great company leadership

Dede Orraca-Cecil is a member of Egon Zehnder, an international executive search and leadership advisory firm, where she leads efforts in almost every aspect of what a company or organization needs in leadership and governance. She talks about identifying company leadership and board building – what it takes and how the conversation has changed.

Thanks for listening!

We love our listeners! Drop us a line or give us guest suggestions here.

Links

https://www.linkedin.com/in/dede-orraca-cecil/

https://www.egonzehnder.com/office/boston/consultant/dede-orraca-cecil

Quotes

“How have recent events, including the death of George Floyd and everything that’s followed, impacted how diversity and inclusion is viewed on for-profit boards?”

I would say it has had a material impact. I think going into this we have had this conversation about diversity on boards over the last few years – it is not a new one.  We’ve seen slow progress with an initial focus on gender.  But what we’re seeing now is a shift where there is more comfort or directness in engaging on discussions around racial and ethnic diversity and it’s not just the boardroom.

I think what we’ve seen since May is really a more openness and in fact, more of an expectation coming from the client around running inclusive processes. People feel more comfortable or more empowered to say: “we need to do something about the representation on our board and in our organizations and we need your help and support in doing that.”

So, the client is driving a lot of these discussions asking: “How do we focus on this? What can we do differently?  How do we think about our pipeline for our board? How do we think about board readiness?  These are conversations that maybe before we might’ve been introducing or leading with and now we have a lot of clients who are beating us to the punch and asking that before we even get to it. 

Big Ideas/Thoughts

Building a High-Performing Board

You’re looking for a more colorful tapestry of experiences on a board. You want to understand not just a person’s capacity, but you really understand what is it that this board is trying to solve for and what are the certain skills that will help accomplish those goals.

We’re in a time where, when we say “culture fit” that can sometimes set people off on a path where you’re worried about creating a homogenous environment, so I want to just clarify.  We’re not trying to create a board where “culture” means we all act the same, we all speak the same.  In fact, what we’re looking for is actually different, the underlying kind of rules engagement.  How do we communicate? How do we show up? How do we create a space where you get that right level of critical thinking, creative abrasion, if you will?  You want a space where people can bring themselves fully to the board, in a way that also doesn’t create sharp elbows or knock others out from being able to contribute their voice.

Board searches and board work operate on a different cycle. In the best-case scenarios, you start looking for your directors with enough time and window to bring somebody on board. Not only just to find the right director candidates, but to actually spend enough time with the board itself, to get a feel for how they engage and interact.

Off-boarding board members

Nobody wants to be the bad cop. Nobody wants to off-board, especially in a scenario where they are preexisting relationships, where you’ve gotten to know person over time and then I think that’s fine. A little tongue in cheek, but that’s probably why we have a some of the work that we have. It’s much easier to hire an outsider to come in and help facilitate that process than to be the ones that tell your fellow director and off board someone.

If you think about it, the board is one big team, and you really want to establish a sense of how effectively they are working together as a team.  It used to be that some people would call this board assessment, the spirit of it is “how do we make sure that we’re the most high performing board that we can be.”  Often in those discussions or in those kinds of, engagements, it gives, the board chair a way to look across the team to see where new kind of capabilities could come in and, and where maybe some contributions are not as valuable.

“Why would a company pay six figures to find a board member? You know most boards believe that through their own networks, they can identify and recruit board members.  How do you answer that question? What’s the value proposition?”

We’ve seen an era where bad performance at the company level cannot just take down a company, but an entire industry, it makes you take a step back to think about the roles and responsibilities of boards. That has led to a shift in the nature and seriousness around board composition and responsibility and duties.  What competencies do we want to look for? What skill sets are we looking for? And how can we actually create more diverse and inclusive representation on the board as well?  These are areas that are complex and it’s hard to necessarily just rely on your own network.  Going to a firm like ours or the others, allows you to tackle those efforts with reinforcements.

Diversity Pipeline

“Raza and I have had conversations that for a while people used the lack of pipeline as maybe an excuse for not actually being as aggressive in diversity as they might otherwise be and in the conversations we’ve had in the last couple of months, it feels like that just isn’t going to fly anymore. That’s really, it’s really just not a valid, like no one buys that excuse anymore.”

You can’t say, well, I don’t know where they are.  Or they don’t exist, you know, we do exist. We are here and people’s willingness to rely on some of that old complacency isn’t there really anymore and the across the ecosystem.  Each of us is being challenged around norms that we used to assume or accept. One of those things being the pipeline. What does that mean and how does that shift the work?

It can shift the work in a few different ways. When some says they can’t find somebody I ask  – is it true that you can’t find anybody?  Well, it depends on what the spec is. It depends on what we’re looking for and how we’re defining a director’s experiences in each event.  If you were to say, well, we only want a sitting CEO of a Fortune 50, well, of course that pipeline going to look very different. Do you then rely on that very specific spec and say, well, we tried, but the pipeline is different? Or do you think about what’s underlying that request?  What are the true needs of the board. 

Is it important to have a Fortune 50 CEO? Or are you actually looking for something else in that executive to contribute to the board. If we go there, we can actually move the spec a bit further and give ourselves room actually build a more robust and diverse pipeline.

What are the new models of leadership that you’re exploring, what does that refer to?

If you look at how the world has changed, we’ve seen greater convergence around sectors.  Often if you’re leading a large institution, you’re thinking about your employees, you’re thinking about your consumers, but you’re also thinking about governments and you are thinking about civil society. When you’re looking at new models of leadership, it’s how do you actually engage across those things? How fluid are you as a senior executive moving from the public to the private, how facile are you in terms of engaging with heads of state and not just your consumer base.

Then there’s that other piece that we alluded to earlier, which is this notion of moving beyond thinking about shareholder value and really this concept of stakeholder capitalism. What does that require of a leader? How adaptive are you?  How are you looking at the individual?

Transcript

Joe: [00:00:00]  Hi and welcome to On Boards: a Deep Look at Driving Business Success. I’m Joe Ayoub and I’m here with my cohost Raza Shaikh. On Boards is about boards of directors and advisors and all aspects of board governance. Twice a month this is the place to learn about one of the most critically important aspects of any company or organization, its board of directors or advisors.

Raza: [00:00:31] Joe and I speak with a wide range of guests and talk about what makes great boards great or makes a board unsuccessful, what it takes to be a valuable member and how to make your board one of the most valuable assets for your company.

 Joe: [00:00:46] Our guest today is Dede Orraca-Cecil.  Dede is a member of Egon Zehnder, an international executive search and leadership advisory firm, where she leads efforts in almost every aspect of what a company [00:01:00] or organization needs in leadership and governance. That includes executive search and recruitment, board recruitment, board and management appraisals and effectiveness, and diversity in the boardroom and C-suite.

Raza: [00:01:15] Dede has a distinguished background and experience including as a fellow of the Aspen Institute’s First Mover fellowship program, serves as a trusted advisor to CEOs, boards, and senior executives across industry sectors for both public private, and also for nonprofits. Dede works on a wide range of leadership performance and talent projects, including talent acquisition and assessment, leadership and organizational agility.

Joe: [00:01:47] Welcome Dede. It’s great to have you as a guest today on On Boards.

Dede: [00:01:51] Thank you guys for having me. I’m excited.

Joe: [00:01:54] I met you for the first time several years ago, as you may remember, on a [00:02:00] board search for an organization and I’m just curious, how much of your time is on board search along with the other things that you do? How does your time divide these days?

Dede: [00:02:11] I would say personally I spend maybe a quarter to a third of my time on board work which can include both the recruitment piece, but also our advisory. So, it may not just be recruiting a director. We may work on succession. We work on effectiveness. So there are a host of things.  As a firm, I would say, we are quite active in the board room.  I think the number is over 3,600 or 3,700 in board consulting engagements in the last five years.

Joe: [00:02:41] So when you are working on a board recruitment, looking to fill one or more board seats, how big a factor is overall board composition in the process and how do you go about doing that assessment?

Dede: [00:02:55] I would say it board composition is a big part and so when we’re planning for recruitment, a [00:03:00] lot of times you want to both, it’s a balance between coming in with a point of view, but also spending enough time and really, understanding kind of where the board is, where we’re meeting the board today and so often what happens is when we go into a discussion, we’ve done maybe an initial analysis around the current board composition, and we’re looking at a number of factors . So, it’s not just who’s on the board, but we’re looking at a matrix of experiences, of tenure, of capacity in addition to kind of industries and functions that people have played in their executive life. We do like to come and really think about kind of the entirety of the composition before we start that conversation.

Joe: [00:03:41] How many skills, attributes or other factors are included in the board matrix when it’s fully put together?

Dede: [00:03:52] A lot. 

Joe: [00:03:53] Yeah,

Dede: [00:03:54] It’s, it’s actually over time, it’s getting wider. It used to be that perhaps you were [00:04:00] looking at a board and you were really trying to solve for their domain expertise, right. Or you were looking for kind of, years or service on other, on other boards. Or, quite frankly, maybe you were looking for kind of past CEOs or GMs, right

Over time, however that equation or that kind of matrix has become bigger and more enriched.  You’re looking for, I’d say a more colorful tapestry of experiences on a board. You want to understand not just a, person’s going to capacity to take one on, but you really understand well, I don’t understand what, what is it in particular that this board is trying to solve for and what are certain skills? Whether it’s somebody coming, let’s say with a cybersecurity background, or somebody who has operated in highly regulated environments for the bulk of it, or maybe you’re looking at somebody who’s had experiences with companies at various stages, companies that are small going public, or companies going through turnarounds. While we come first with our own set of  kind of [00:05:00] factors or make matrices, that matrix can sometimes get blown out as you have a conversation at the board around really, what are we trying to solve for here with this director.

Joe: [00:05:11] And do you talk to everyone on the board? Just the nom/gov committee? How does that usually play out?

That can often depend on the board, right? Some of that is also an early indication and reflection of the board culture as well.  While traditionally or historically a lot of our direct engagement will be with the nom/gov, you have some boards where you end up actually doing a lot of  stakeholder engagement conversations with the entire board. It’s not uncommon that we’ve had those and really what that does is well, like we, you want to empower the nom gov committee, you also want to ensure that it really is truly/in alignment around what you’re looking for and talking with the directors across the board also gives you, or gives us as the partner, a sense of also what the board [00:06:00] culture is like. What is the atmosphere that a director will be walking into and of how do they work together?  Kind of more is more, can be more sometimes when you’re having those conversations.

And part of understanding board culture, I’m guessing, is to enable you to determine fit for a board member. The fact that someone may have the right skills and expertise or whatever it is you’re looking for, isn’t the whole picture it’s gotta be: does this person fit with the team so to speak?

Dede: [00:06:28] Yeah. We’re in a time where, when we say “culture fit”or “fit”, that can sometimes set people off om a path where you’re worried about, well, if you ever really creating homogenous environment, so there’s some shyness around that phrase. I want to just clarify.  We’re not trying to have it a board where the quote, unquote culture means we all act the same, we all speak the same, you know, all have this, right. In fact, what we’re looking at is actually different. It’s almost, what are the underlying kind of rules engagement? How [00:07:00] do we communicate? How do we show up? How do we create a space where you get that right level of critical thinking, creative abrasion, if you will, you want a space where people can bring themselves fully to the board, in a way that also doesn’t create sharp elbows or kind of knock others out from being able to contribute their voice.

They’re really trying to understand how does this board communicat e?  What’s the style of communication, what works well and what will allow, additional voices to be heard.

Joe: [00:07:25] So that seems to be, probably one of the most challenging aspects of what you do. How do you, how do you get your arms around that?

Dede: [00:07:33] Yeah, you spend a lot of time.  Board searches and board work operates on a different cycle. In the best case scenarios you start looking for your directors with enough time and window to bring somebody on board. That’s not like I’m getting a call today and we need a director tomorrow or, you know, by the next meeting.  You want to give yourself enough time and space. Not only just to find the right director candidates, but to actually spend enough [00:08:00] time with the board myself, to get a feel for how they engage and interact.  It used to be that we would have a lot of time with directors in person, obviously that’s changed. It has changed in COVID, but we have still found ways to actually spend time with directors and the CEO over zooms. There’s the one on one engagement where you get to understand and get to know a director, but also , sometimes we have small group settings and conversations where we can also stand back and see how the directors are interacting with each other and you get a sense for, okay, this group has a lot of playful banter. This group is pretty much, they get right to it.

Joe: [00:08:35] Have boards been reluctant to bring on new members, whom they’ve never met in person, they’ve never actually sat down with them and looked them in the eye, so to speak?

Dede: [00:08:46] I would say the process  if I look at what have we seen?  We haven’t seen a downgrade if you will, of the work. Part of that has to do with maybe just calendar consistency and kind of processes that [00:09:00] are evergreen, regardless of what’s happening in the world around us. The opportunities to bring directors hasn’t shifted and also the ability to still engage through video conference.  Even creative ways of building relations and some of the intimate connection.  Sp whereas you might have had dinners, sometimes you find some clients or invite virtual dinners or can we have virtual coffee. Off cycle time with one another and in some ways, because you’re kind of both stumbling through this awkward and having a coffee or dinner over zoom together, you kind of formed some bonds that you wouldn’t have necessarily formed.

Joe: [00:09:36] Interesting. You can actually bond over the awkwardness is interesting. Yeah, yeah, yeah.

Dede: [00:09:43] in some instances now that they’re socially distance kind of, w

alks and things that can be done. Those are other things that we’ve explored in terms of getting,

Joe: [00:09:51] Yeah, that’s right. I’ve done a couple of walks with people on that actually was a very effective one-on-one technique, but [00:10:00] it is, contrary to zoom. It’s the most time consuming way to do it. Cause you’re really with, at least in my case, one person at a time. Yeah.

So one other thing about boards, you know, one of the biggest challenges even for the best run is offboarding.  And, I know that a lot of times, you know, unless there is a really strong chair or really strong CEO, whatever it might be, bringing a third party in that knows the board is the way boards get at this. And I’m assuming that is something you guys do.  Tell me about how you approach that?

Dede: [00:10:33] Well, one, I just kind of want to I’m nodding, can’t see it because it’s the podcast, but I’m nodding with you profusely because it is a challenge.

Nobody wants to be the bad cop. Nobody wants to off-board especially in a scenario where perhaps they’re pre-existing relationships where you’ve just gotten to know person over time. And then I think that’s fine, a little tongue in cheek, but that’s probably why we have a lot of the work that we have.

It’s much easier to hire an outsider to come in and help [00:11:00] facilitate that than to be the ones that tell your fellow director  or to off board someone. But I guess the question is how do we do it? And what are some of the tools, right.  If there isn’t a it’s predetermined, if this isn’t coming because of a term or what have you, there are different ways.  Sometimes really we’re looking at, in general, we’ve been asked to kind of come in and look at just kind of how the board is functioning.  If you think about it, the board is one big team, and you really want to establish a sense of how effectively are we working together as a team.  Used to be that some people would call this board assessment, or really the spirit of it is how do we make sure that we’re the most high performing board that we can, and often in those discussions or  in those kinds of, engagements, it gives, the board chair a way to kind of look across the team to see where new kind of capabilities could come in and, and where maybe some contributions are not as valuable.

Joe: [00:11:56] Do you use self assessment as one of the tools during this [00:12:00] board effectiveness review?

Dede: [00:12:01] Self assessment is a tool. It is a tool that can be helpful and effective along with kind of one on one interactions as well as discussions with the board chair. All of which are helpful.

Joe: [00:12:17] So one of the, questions that comes up.  In fact, we were on a panel together a few years ago, as you may remember and someone asked with a slightly incredulous tone, but not in any way critical, why a company would pay six figures to find a board member? You know, most boards believe that through their own networks, they can identify and recruit board members. How do you answer that question? What’s the value proposition?

Dede: [00:12:45] Well, first take about the climate today versus years ago. If you think about today, I don’t think it’s a strange thing to say that a lot of boards and organizations are under increased scrutiny. It used to be that you might be on a board [00:13:00] and you were wary of  overreaching. You’re not operating, you’re taking this step back providing some retreats, strategic guidance and then you had your, your dinners and your lunches and that was it. Right.  But what we’ve seen over the last few years is that  there’s room for boards to be more engaged and active.

It used to be that, you know, couldn’t really do any harm, but here, when we’ve seen an era where kind of performance and things at the company level can not just take down a company, but an entire industry, it makes you take a step back to think about the roles and responsibilities of those boards. That level of, I’d say more of a shift, in the nature and seriousness around board composition and responsibility and duties. As I think, encouraged, or kind of sparked, boards to think differently around how do we look for directors?  What competencies do we want to look for? What skill sets are we looking for? And, how can we actually create more diverse and inclusive representation on the board as well? But these are areas that really, it’s hard to necessarily just rely on your own [00:14:00] network.  Going to a firm like ours or the others, allows you to tackle that, those efforts with a few reinforcements.

Joe: [00:14:09] Well, speaking of diversity, there’s been progress albeit slow, for several years and diversifying board membership with respect to gender and people of color. How have recent events, including the death of George Floyd and everything that’s followed, impacted how diversity and inclusion is viewed on for-profit boards?

Dede: [00:14:30] I would say it has had a noticeable or material impact. I think going into this we have, I’ve had, again, that benefit over the last few years, this conversation or notion of diversity on boards is not a new one. It may be one where we’ve seen slow progress with an initial focus on gender but what we’re seeing is a shift in is maybe more comfort or directness and engaging on discussions around, [00:15:00] racial and ethnic diversity and it’s not just the boardroom, if we’re going to be honest.

I think what we’ve seen since may is really a more openness and in fact, kind of more of an expectation coming from the client around running inclusive processes. People feel maybe more comfortable or feel more empowered to say, we need to do something about the representation on our board and in our organizations, and we need your help and support in doing that. So I would say it’s noticeabl y different where the client is driving a lot of these discussions often saying, how do we focus on this? What can we do differently? How do we think about our pipeline for our board? How do we think about board readiness? And these are conversations that maybe before we might’ve been introducing or kind of leading with and now we have a lot of clients who are kind of beating us to the punch and asking that before we even get to it. 

Joe: [00:15:48] Raza and I have had conversations from that have a sense that for a while, people used the lack of pipeline as maybe an excuse for not actually being as aggressive in [00:16:00] diversity as they might otherwise be. And in the conversations we’ve had in the last couple of months, it feels like that just isn’t going to fly anymore. That’s really, it’s really just not a valid, like no one buys that excuse anymore.

Dede: [00:16:14] You can’t say, well, I don’t know where they are. Or they don’t exist, you know, we do exist. We are here and maybe people’s kind of willingness to rely on some of that old complacency isn’t there really anymore and the across the ecosystem , each of us is being challenged certain norms that we used to kind of assume or accept. One of those things being the pipeline.

What does that mean and how does that shift the work? It can shift the work in a few different ways. So when we say, is it true that you can’t find anybody? Well, it depends on what the spec is. It depends on what we’re looking for and how we’re defining a director’s experiences in each event. If you were to say, well, we only want a [00:17:00] sitting CEO of a Fortune 50. Well, of course that pipeline going to look very different. Fact of the matter is while we are getting better, there are so many things that kind of have been created over time through systems that the numbers just aren’t there. Do you then rely on that spec and say, well, we tried, but the pipeline is different. Or do you think about what’s under, what’s underlying that requests, right?

Joe: [00:17:23] Right.

Dede: [00:17:23] Is it important to have a Fortune 50 CEO? Or are you actually  looking for something else in that executive to contribute to the board. If we go there, we can actually move the spec a bit further and give ourselves room to actually build what seems like a more robust and diverse pipeline.

Joe: [00:17:41] Right.

Raza: [00:17:42] Dede, tell us about your work that Egon-Zehnder does for executive searches. What type of searches do you do? What companies, what sectors?

Dede: [00:17:52] Everything.

We’re a big firm. We have nearly 70 offices over 40 countries [00:18:00] and so that gives you a sense of just kind of the global nature of our work.  At least geographic distribution but also we work across every major industry. We are a firm that focuses on every industry. We focus not just on the Fortune 500.  We work with small companies.  We work with PE backed companies, VC backed companies and of course, as I think you might’ve mentioned earlier, we work across sectors. We work with the social sector. We often work with governmental institutions. There is a lot of variety in the work that we offer. Probably the common thread or common theme to the work is that we are looking at leadership.

Raza: [00:18:35] And Dede how has the landscape for CEO searches changed or has it changed over the past year?

 Dede: [00:18:42] The role of the CEO and the responsibilities of the CEO, while many aspects or attributes remain, there are going to new pressures and new considerations. If anything, that’s probably been heightened or highlighted or amplified since we found ourselves in this pandemic. [00:19:00]

What you find is that it’s not enough to have just kind of the right’s CV. It’s not enough to have the right kind of set of experiences. We’re spending a lot more time looking at how you lead.  We’re spending a lot more time looking at the authenticity and leadership. Particularly in those, enterprises where they’re truly consumer driven, a lot of the expectations around  who’s leading the institutions that they work for, is driven by the consumer. Consumer wants to know, what do you stand for? What do you believe in and not just what are you delivering every quarter?

I would say in some regards the nature of the assessment and time spent really with CEO candidates , it’s growing. It’s more and more, a big component, as well as really thinking about what it means to lead in times of kind of stasis and in times of change in times of crisis.

All of that has come to the forefront even more so in the last six months.

[00:20:00] Raza: [00:19:59] Sounds like people need to find wartime CEOs versus the peace time CEOs these days.

Dede: [00:20:06] One way to think of it is that you want leaders who can lead from the front and from behind. It’s that there are going to be times when actually you do need a leader to lead from the front, and there are times where you’re creating the space.

Raza: [00:20:17] In terms of sectors has healthcare, consumer and technology intersection being, playing a little more for you, for the kind of searches that you do or that’s roughly equal to any of the sectors that you’re dealing with?

Dede: [00:20:32] More and more personally, I’ve been trying to actually explore  that intersection.

As we’ve  seen the broader healthcare industry take this shift more towards patient centered approaches, consumer centered approaches and citizen centered approaches. What that’s calling for is different skill sets.  It’s no longer just looking at purely life sciences or purely health technology. Now that we’re seeing this intersection of  consumer and health and technology, we’re [00:21:00] looking for leaders who have been in a digital space, the leaders who have that strong consumer orientation.

Raza: [00:21:05] Like connecting the dots and overlap of various areas brings more to the table than expertise in a single area.

Dede: [00:21:14] Yeah. But if you think of that kind of, that systems way of thinking  where you’re actually bringing to bear  insights from various segments and an ecosystem into a company, those the more agility in the leadership.

Joe: [00:21:25] One of the things you said when we were talking earlier, is that in a lot of ways it’s not a search business anymore, like more of a recruitment business, is that a reflection on the fact that the leaders you’re looking for a more multidimensional and there are just less of them? Or is it something else?

Dede: [00:21:44] Clients and firms have lots of ways of identifying and finding names. Those high performers stand out. Maybe as the demand and specificity around excellence and leadership continues to increase and perhaps, maybe the pool of [00:22:00] those who are at the top of that remains the same or shrinks, it’s now how you get access to you and bring those few on board, right, before a client or a company, a piece around the recruitment process, what is going to be compelling and different about your opportunity, then every other company that is looking for transformation and every other company that is facing the brink of disruption and wants a leader to come in.

I think that piece around not searching for, but trying to also attract  talent into companies  is something that’s not lost. You see that a lot in, in healthcare and environment.  If you look at select chief medical officers and chief scientific officers, where you have very, very, popular candidates and ideas, because they’ve had a track record for excellence. trackers. How are you going to attract them to your company?

Raza: [00:22:47] So it’s the passive candidates that everybody’s after?

Dede: [00:22:50] Yes. Yes.

Joe: [00:22:52] Do you help prepare the search committee so that they’re, in recruitment mode?

Dede: [00:22:58] Well, yes. You still want to balance [00:23:00] recruitment and assessment, because you still want to make sure that you’r hitting the spec directly, but yeah, time for really trying to determine and assess whether or not a person is fit for the role and then there’s a period where you’ve know and crossed over, and yes, we do try to kind of give  coaching here and there , so…

Joe: [00:23:18] you gotta do both.

Dede: [00:23:20] You gotta do both. Sometimes the science sells itself. Sometimes you need more.

Joe: [00:23:25] Yeah, you know, on your bio, it says that you act as a trusted advisor to CEOs, boards and senior executives in exploring new models of leadership. What are the new models of leadership that you’re exploring, what does that refer to?

Dede: [00:23:41] A few different things and some of this is informed by just more of a systems based way of thinking about it.

If you look at how the world has changed,  we’ve seen greater convergence around sectors. Earlier we were talking for example, about consumer health and if you think about where the world is turning, no longer would you [00:24:00] go to your office as a CEO and just sit there.  Often if you’re leading  a large institution, you’re thinking about your employees, you’re thinking about your consumers, but you’re also thinking about governments, and you are thinking about civil society. When you’re looking at new models of leadership, it’s not, how do you actually engage across those things? How fluid are you as a senior executive moving from the public to the private, how facile are you in terms of engaging with heads of state and not just, your consumer base.

Then there’s that other piece that we alluded to earlier, which is this notion of moving beyond thinking about shareholder value and really this concept of stakeholder capitalism. What does that require of a leader? How adaptive are you? Are you looking at the individual? The lines have blurred a bit. They blurred in terms of sector, they’ve blurred in terms of segment, they’ve learned in terms of your home life and your work life. All of that has now become a lot more integrated. We’re looking at that. 

Joe: [00:24:54] Is the notion of stakeholder capitalism really taking hold [00:25:00] in much of the work that you’re doing these days.  Is that pigeonholed in a few places or is it you’re seeing it everywhere?

Dede: [00:25:07] It’s always been part of the conversation. If anything, maybe with the BRT, with the Business Round Table, maybe that just crystallized it and gave people reason and rationale to talk about it in a more acute fashion.  It codified it maybe for the rest of us, but it’s always been I think part of this. Now probably what’s different is that we actually have the mass or institutional support to talk about it in a way with greater commitments.

Joe: [00:25:36] Do you think it’s partly because that notion is potentially impacting the bottom line? So leaders or certainly shareholders see that it is just more than just delivering value to the  owners. It’s, the employees its your supply chain – it’s everything,

Dede: [00:25:56] It’s everything.

 If you think about particularly those companies that [00:26:00] are heavily consumer oriented. We talked about this earlier, where, your consumer doesn’t just want to know, they don’t just want the products, they want to know how the product is made. They want to know the communities that were impacted and making it. And, in fact, some of that can also drive  greater, better consumption when people feel as though, okay, how was this sourced? How much is made and how much of that flows back into the community? What concessions were made in the creation of this product? Those are questions that are now being asked front center. And similarly to your point. Your employee base, people now spend so much time at work, people have choice. They have choice in where they go. They don’t feel stuck. They don’t feel as though they need to stay in any company for 10, 20 years. When you have choice, why do you decide to stay at a company? Is it just because of the product? A lot of times, no.

It’s about what does the company stand for? What do we create? How do we lead? How do we show up in the world? People use that as part of it’s an extension of their identity. All of these actually bring some of [00:27:00] what we maybe didn’t focus on up to the surface more. There was how we attract talent, how we retain talent and similar in what we do with our consumers.

Raza: [00:27:09] Dede, what advice do you have for aspiring board members?  You know, other than being CEO of a wildly successful company, what are the things you look for in potential board member candidates?  And what advice would you give them to be prepared to be a good candidate

Dede: [00:27:25] a good question. I would say probably the things that we look for and what makes for a good board member is probably also makes for really strong team contributor. If you want a board member who has something unique to offer to the group, and that can come from your experiences, from judgment. Think about what your unique contribution is going to be.

Raza: [00:27:46] And do you also recommend folks go through education for becoming board members at various avenues, from NACD to Private Directors Association and be a little more prepared. Does [00:28:00] that help or it’s their experiences that count and that, you know, you can teach them how to be a good board member later?

Dede: [00:28:07] No, no, I think all of those things actually are great resources. Especially if you’re joining a board for the first time, you’re exposure has been in a very different setup. Your exposure to the board may have been just as an executive or maybe your exposure is through a nonprofit avenue.

Actually I would say those resources, whether it’s the courses NACD, or you have board boot camps, even things that the firms offer helpful, because what it does is it puts you into the right mindset of the director. Not the executive or the operator. Appreciating the difference in your responsibilities, the different in the nature of what you will or will not sign on. The relationship with the CEO, all of that’s different from the board. And so I think all of those reinforce them.

Raza: [00:28:50] Well said.

Dede, you are part of the First Movers Fellowship program at the Aspen Institute. Tell us a little about that program.

[00:29:00] Dede: [00:28:59] The Aspen Institute has been around for quite some time and has a number of fellows. The First Movers Fellowship actually is a fellowship that was created over a decade ago, as part of the Aspen Institute’s business and society group and really with the focus on, in the for profit sector, identifying leaders who are intrapreneurs in their companies, the underlying principle being, how can you drive change within your company, through your day job that will, both drive commercial value but also societal impact. The fellowship was created in support of that notion that we can actually drive that from within and how can you as a fellow be a first mover in your company

Raza: [00:29:42] And how has your experience been?

Dede: [00:29:45] I found the community and the fellowships would be fantastic. They just announced a new class, really you’re in a fellowship with executives in companies like Levi’s or IDEO or Facebook and Google, or what have you. Then what [00:30:00] everybody brings to it is this kind of desire to actually drive change and impact. You have a room full of change agents who are finding ways to drive that change through institutions that have big platforms, it’s energizing and decades upon decades all of this work will actually drive greater societal benefit through the work that everybody’s doing.

Raza: [00:30:20] Wonderful.

Joe: [00:30:21] I love that word intrapreneur-  tell us what it means?

Dede: [00:30:25] Intrapreneurs: how do you actually work within the existing infrastructure of a company or organization to make something new and different happen and innovative.

You can’t do that just sitting in front of your desk or sitting in front of your computer. The intrapreneur =is thinking about ways to collaborate across their organization, working outside of their groups or functions to pull people in. An intrapreneurs is trying to find a new way of working or maybe a new thing to deliver and what that person has to do is actually bring together I’d say I used that word before tapestry, but bring together that right [00:31:00] mix of individuals, within the company to help drive that. The hard part, if you’re in it, when you’re an entrepreneur, you, right. I mean, granted, you’re looking for funding and there are different ways, but it’s kind of you and you have that freedom to be the founder of what you want to found.

Right. When you’re an intrapreneur, you’re trying to drive that innovation, but you’re doing so within pre-existing structures. Right. So how do you actually work and bump up against the structures to drive a new way of working

Joe: [00:31:28] Great concept? Really love it.

So when, Raza introduced you, he described your background distinguished and, I think that is more than just accurate, but one of my favorite stories about you is from a long time ago, I think in high school and it was in connection with being dropped off at a lacrosse summer camp that turned out to be an all boys camp and my memory is that you stuck it out which just completely [00:32:00] blows my mind as the, as the father of a daughter, that you were had the guts to do that. Can you tell us about that?

Dede: [00:32:06] Sure. Maybe I should couch this in that I’m not originall from the United States. I’m from Ghana. Lacrosse is not a big sport or at least it was then, so I say that because I don’t think my family is certainly my parents didn’t really know that much about it. but I was playing it and I wanted to go to a camp to get better. I wanted to make the varsity team. I was using my summer to get even better. And, my mom signed me up for a camp and   maybe my name is kind of gender neutral. I don’t know. Or it’s different enough that people didn’t know and so when I got there, I was dropped off and one by one, I realized everybody else who was getting dropped off, it was a boy and I’m sitting there with all of my stuff and each person getting dropped off and it didn’t, it just, something’s not right here.

And eventually we realized, with the heads of the camp, what had happened, but here I was with all my equipment ready to go [00:33:00] and to their credit rather than say, okay, this isn’t going to work.  Actually said, you have this choice, right. You can stay and stay with us and we’ll train you and we’ll coach you, but you’re going to do it our way –  and I did and the thing that the fact of the matter is, I actually probably, I left that place a better goalie. I did make the varsity team and it was just kind of getting past the initial kind of awkwardness when you were a teenager and then focusing on the task at hand.

Joe: [00:33:28] You know, I love it both because it reflects your attitude, but also the attitude of the people at the camp. Instead of panicking or throwing their arms up, looked at it as you did as an opportunity, and that I’m sure clearly it was a great experience for you, but actually it probably turned out to be a pretty good experience for them as well.

Dede: [00:33:49] I’m sure they – it’s definitely memorable.  Its funny, I never even thought about it, but in a day and age now, when we talk a lot about inclusion and belonging here’s kind of an extreme version of, you [00:34:00] know, you’ve come right. And you’re going to join us. Right.  We won’t bend and break and what have you, we’ll make this work.

Joe: [00:34:07] Yeah, no, it’s you’re right. It was a precursor to what everyone is thinking about now, but it happened by mistake and everyone adapted to it. It’s just, it’s great.

Dede, It’s been great speaking with you. Thanks for joining us today. I hope you and your family will continue to be well and stay safe.  

Dede: [00:34:23] Thank you for having me.

 Joe: [00:34:24] And thank you all for listening today to onboards with our special guest Dede Orraca-Cecil. Please stay safe and take care of yourselves, your families and your communities as best you can  .

Raza you take care too. I hope you and your family continue to be well.

Raza: [00:34:43] Yes, you we’re all staying safe. Thank you. And I hope you and your family are as well.

Joe: [00:34:49] Thanks.

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