The Sisyphean Task of Activating Boards of Directors

strategy+business, Feb. 22, 2017

by Theodore Kinni

Ira M. Millstein opens his new book, The Activist Director (Columbia University Press, 2016), a mashup of memoir and handbook, as if he were standing in front of a jury. “I will build the case for adopting a board-centric approach to corporate governance by placing more activist directors in the boardroom — people who will ask the tough questions, challenge management practices, and resist those who put their own agendas ahead of those of the corporation and investors like you,” writes Millstein, the senior partner at corporate law firm Weil, Gotshal & Manges and adjunct professor at Columbia Law School. “Some will call this pie-in-the-sky idealism. I prefer to call it pragmatic optimism.”

In addition to being an optimist, 90-year-old Millstein is a patient man. He has been making this particular argument for nearly 40 years, since the late 1970s, when he began helping the Business Roundtable draft a series of reports that defined the role and responsibilities of boards. At the time, shareholder activism was starting to manifest itself in leveraged buyouts and hostile takeovers, and Millstein wanted “to ensure that boards exert some initiative to restore corporate competitiveness.”

Toward this end, Millstein didn’t simply write about boards — he advised them. And he advised them to be aggressive. Most notably, he served as external counsel to the board of General Motors for about a decade starting in 1985. During that period, GM was losing money and market share. Yet chairman and CEO Roger Smith, the “Roger” in Michael Moore’s scathing documentary Roger and Me, refused to treat the board as anything more than a rubber stamp — which was the de rigueur role of most corporate boards. Braving Smith’s legendary temper, Millstein helped GM’s board find its feet. And when Smith retired, he advised the board as it took a more active role in governance — hiring Robert Stempel as CEO and then, within two years, firing him and other members of GM’s senior management team when they did not move quickly enough to right the ship. Read the rest here.

Susan David’s Required Reading

strategy+business, Feb. 8, 2017

by Theodore Kinni

“Emotions can be harnessed to live and lead in better ways,” says Susan David. “For so long, we’ve treated emotions in organizations as warm, fluffy, and disruptive. Now we’re recognizing how powerfully they affect outcomes.”

A psychologist at Harvard Medical School, cofounder and codirector of the Institute of Coaching at McLean Hospital, and CEO of Evidence Based Psychology, an organizational development consultancy, David is a leader in the effort to transform how we view emotion in the workplace. This is especially important in business today, as organizations face unprecedented complexity, competition, globalization, and disruptive technologies. Managing in this context requires the ability to adapt and flourish in changing circumstances. “The truth is,” notes David, “that organizations can never be truly agile unless the people who work within them are agile — and more specifically, emotionally agile.”

David introduced the concept of emotional agility to the business world in a 2013 article, written with Christina Congleton, in Harvard Business Review, which heralded it as a “Management Idea of the Year.” Her acclaimed book, Emotional Agility: Get Unstuck, Embrace Change, and Thrive in Work and Life (Avery, 2016), outlines how to identify and accept our emotions and respond to them in ways that ultimately make us happier and more successful. (You can assess your emotional agility here.)

When I asked David about the books that influenced her thinking on emotional agility and that executives should read to learn how to effectively use emotions in leading themselves and others, she responded with four titles. Read the rest here. 

Exaggerated Truth-Telling Is Commonplace, But Not Admirable

LinkedIn Pulse, Feb. 7, 2017

by Theodore Kinni


In 1919, as the White and Red armies fought a brutal, seesaw war for control of Russia, British War Secretary Winston Churchill prodded his government to commit troops to the fight. The Bolsheviks, he declared, were “swarms of typhus bearing vermin.” They “hop and caper like ferocious baboons amid the ruins of their cities and the corpses of their victims.” Churchill’s rhetoric was so inflammatory that, after he addressed the House of Commons on the topic, Tory Party leader A.J. Balfour felt compelled to comment. With quintessential British coolness, the former Prime Minister told the future Prime Minister, “I admire the exaggerated way you tell the truth.”

Unfortunately, exaggerated truth-telling is as commonplace in business as in politics. Walter Isaacson cites Steve Job’s “reality-distortion field” repeatedly in his go-to biography of the Apple’s mercurial chief. “[Jobs] would assert something—be it a fact about world history or a recounting of who suggested an idea at a meeting—without considering the truth,” writes Isaacson. He would conjure up an impossible production date, for instance, and demand it be met. Surprisingly, as Isaacson recounts, it often was.

Elon Musk seems to have picked up Job’s penchant for exaggerated truth-telling. Musk says that Tesla’s factory in Fremont, CA will produce as many as 500,000 vehicles in 2018—an “extraordinary leap in production” from less than 84,000 in 2016, according to Jeff Rothfeder’s insightful analysis in The New Yorker. Can Musk’s employees and suppliers deliver on his promise or is this exaggerated truth-telling? Well, as The Wall Street Journal calculates it, Tesla has missed Musk’s projections more than 20 times in the past five years. Read the rest here.