Archive for March, 2014

Why you should follow the No Surprises Rule

surprise

When we were kids and you could still buy fireworks, one of our favourite games was putting a tuppeny bunger under a kerosene tin and seeing how high into the air it would blow.  Something like that can happen in a board meeting if you forget the No Surprises Rule.  I saw that rule broken recently, through inexperience more than intent, and I witnessed the mild meltdown that occurred afterwards.

The rule goes like this:

“Never rise anything in a board meeting which is new, significant, controversial or potentially adverse, unless it’s been flagged in some way first.”

And here’s what happened last week.  The board was having a strategy-focused discussion.  The new member of the management team offered to share some insights and suggestions he had about how we could address one of the identified strategic challenges.  His ideas were useful ones, and there were noises of enthusiastic support from around the board table.

The new boy had, however, neglected to share his proposals with the CEO before sharing them with the board.  While they were good ideas, they weren’t ready for implementation in the priority queue, and presented some resourcing, logistical and timing issues.

When one director said, “So can we agree to move ahead with Kevin’s idea?”, the CEO was forced into an uncomfortable yank on the handbrake – which was unpleasant for her, tough on Kevin, and slightly cringe-worthy for the board.  Conclusion: never get between your boss and the board because you haven’t the boss on your side first.

The No Surprises Rule operates in a number of scenarios:

  • If you are the CEO, don’t give the board bad news without having signalled it first.  If it is late-breaking news, at least pull the chair aside before the meeting and give them a heads-up, so the chair can help manage the delivery of the bad news in the least provocative way possible.
  • If you are a director who has a serious beef about something significant, don’t just lob it into the meeting like a hand grenade.  Try getting the chair on side, or at least apprised of your issue, first.  If the chair is not onside with you, try lobbying someone else on the board so you’ve got some support.  If you really are on your own, make your play as dispassionately as possible, and consider requesting that your matter be specifically minuted.
  • If you are senior management, never float something with the board that the CEO hasn’t seen and given support to.  (This doesn’t apply to whistle-blowing which should not be done in a board meeting anyway.)
  • And while we are on bad news of which you are the bearer, don’t try and blame one of your colleagues for it in front of the board – you’ll just look lame.

I’ve found one other instance of the value of the No Surprises Rule.  Don’t buy your wife expensive jewellery as a surprise – it’s a high risk manoeuvre, you can blow a lot of money on something she won’t like, and you can get just as good a result by saying “Come into Tiffany with me and choose yourself something.”  If you’re game.

[Partner’s note: That was actually an exaggeration – what he really said was “Come into Swarovoski with me”.  It’s nice enough, but it ain’t Tiffany. ]

(image courtesy of eofdreams.com)

Advertisements


%d bloggers like this: