Keep an Honest Boardroom

There is absolutely no place in the Boardroom for dishonesty, particularly of the sort that pretends there is no problem where there actually is.  Suppose you are planning a new takeover.  You have researched the product market, decided on your competitive strategy and the only thing left to do is make it happen.  Now ask yourselves “Do we have the knowledge and experience in this room to manage this project?”
If it involves, for example, the entrepreneur on the Board managing a new group of staff doing a repetitive job and already suffering from low morale, you may want to think again; it may not be their thing.  Try not to put anyone, including yourself, into the position of doing something they are not good at.  This requires the honesty of everyone to admit gaps in their skills or knowledge and volunteer to put them right.

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Tip from Shaf – Encourage people to recognise their weaknesses
No one can be brilliant at everything.   Make sure that all your people know that telling you they cannot do something is not a career-ending problem.  Give them cover by putting someone else in to help or think about doing some training to plug the gaps.  It is always tempting in a small business to ignore the role of training: it costs money and it takes the person off the patch; but if it prevents bad mistakes being made it’s well worth it.

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Look at it this way.  When you had appraisals in big companies they will have confirmed your brilliance in some areas and “need for development” in others.  You probably tried to eliminate these weaknesses, and indeed probably convinced your boss that you had.  But they remain your weaker areas. Everyone has varying degrees of skill and competence in certain aspects of their business and indeed personal lives. What you are good and bad at becomes over time blatantly obvious to your colleagues.
So, don’t cover it up.  Surround yourself with people with complimentary skill sets and encourage them to be as honest about their abilities as you are and to be confident in the things they do well.

In particular, if you are running a number of small businesses it can be tempting to ignore the fact that a key person does not really understand the financial side of the business; after all you can cover that and then there’s the accountant.  But…however good someone is at their function of running the sales people or the warehouse or whatever, they still need to appreciate how finance works if they are to grow the job and the business.

Give your non-executive directors huge credence.  You will choose your non-executive directors for something that they bring to the party.  It may be contacts, market knowledge, industry experience or whatever; but it is new to this Boardroom.  Now get it clear “What does the Board need?” and make sure that the non-exec is clear about their contribution.  Then listen to them.

It is the people in a business who make it make money.  Get the right ones and then develop their skills and knowledge