In Finland, we have an idiom silittää myötäkarvaan, which literally means patting your pet in the direction that the fur grows, or more generally speaking, if you want to please someone, don’t go against them, go with the flow. Nowhere could this idiom be more apt than in the current context of corporate leadership.
In a country like Finland, where people are culturally known for being reticent, particularly on issues that might lead to conflict, it’s time to ask how willing are we to go against the grain of consensus and start boldly speaking out on critical issues?
Andrew Kakabadse, Professor of Governance and Leadership at Henley Business School presented new and compelling evidence at our recent Leadership Forum in Helsinki that should come as a wakeup call to both Finnish executive and non-executive leaders. His findings, which are the result of an intense multi-year research project covering 21 countries and many thousands of private and public sector organisations, overwhelmingly point to engagement on tough issues as the most critical factor for business success. Effective engagement is more important than strategy or alignment of viewpoints in an organisation.
Yet sadly, Kakabadse found that 66% of the senior executives, senior managers and board members surveyed were too inhibited to raise critical but uncomfortable issues, even when they understood that these conversations were much needed. The corresponding number for Finland was a whopping 78%!
Although this number is alarming, it’s hardly surprising. Finland’s board circles run very much like a private club. Members come from similar socio and educational backgrounds, subscribe to similar publications and many of them are actually friends with a history that can go back to childhood. This kind of homogeneity that too easily hardens into tribalism and tunnel vision has become inevitable within the Finnish upper echelons of business.
Yet the danger comes when we don’t see it ourselves. Dr. Gillian Tett, Chief Editor of the Financial Times in the US, who also spoke at the Henley Leadership Forum, says we think we live in a hyper connected world just because we all carry cell phones and have Wi-Fi. But in reality, if we look at the way we live our lives, how we get our ideas, how we run our businesses, we’re just people talking to people, who think and act like us. In short, we’re living in silos. And silos mean death to business.
Of course, everyone wants to be accepted and liked. If we know that raising a difficult issue will create conflict among board members and make top executives uncomfortable, we naturally resist against breaking the silence of our silos. Some board members might be compelled towards silence for other reasons. There are those who are not well enough informed on the issues to be able to speak out – 85% of Board Directors surveyed in Professor Kakabadse’s study were unable to name the competitive advantage of the organisation on whose boards they served. Other board members are too busy to be fully present in their roles.
Professor Kakabadse describes anyone with more than three concurrent directorships as a menace to business. These people tend to treat their boards like committees, reading their papers hastily before meetings then signing off on them along with consensus. In Finland, our club is quite small and there is always a risk that the same faces occur too often at the same tables. Having said that, the average number of concurrent board memberships in the English House of Lords is 29! We’re not there yet.
But in the end, Professor Kakabadse’s research reminds us that relationships among board members are not the issue, not even a compatibility of ideas. It’s the contribution that counts. Good board governance is the stewardship of helping management navigate through difficult issues. It’s the moral responsibility of the board to open up the way for tough conversations, because it’s these conversations that will lead decision makers to the big ideas, the one that will give them a sustained competitive advantage.
This issue of reticence is not going away and will only get harder for Finland if we don’t show a readiness to change. The question is, are we in Finland ready to open up a new board culture of speaking out? Are we ready to start standing up to our powerful peers in top management even if it means rubbing our friends up the wrong way?