Trends emerging amongst directors in boardrooms

Trends emerging amongst directors in boardrooms

 
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Guest Bio

Robert Newman

 

Robert Newman is an organisational psychologist, executive coach, director and managing partner with Change Focus Group, an advisory and consultancy firm providing organisational psychology services. 

Robert specialises in board, director and executive dynamics, leadership coaching and change management. A key element of Rob’s work is predicting peoples motives and future actions in corporate settings, using principles from leadership psychology and behavioral economics to influence their decisions, and coaching leaders to apply this for themselves. 

SHOW NOTES

 

In this episode Robert Newman explores the two key trends emerging amongst directors in boardrooms. 

Directors are getting a clear message that they are going to be held responsible for the performance and behaviour within their organization. There’s been historically an expectation that directors were there to support and advise a management team who took responsibility for the organization. But royal commissions of recent years and governance failures of recent years have pointed out very clearly that directors hold a significant amount of liability when it comes to poor behaviour and poor performance by organizations.

So directors are being shocked by that, equally, but that’s also leading directors to recognize that the community expects them not just to be responsible for ensuring and maximizing profits, and ensuring return for shareholders, which a number of directors thought was their primary role, represent shareholders.

 But the community doesn’t expect just that anymore. They expect the board to represent the long-term interests of the organization, and especially its responsibilities and interactions with the wider community. And so boards are recognizing that their responsibilities are out to a wider stakeholder group than perhaps many of them thought. And many moving and stepping up to that mark. So I think that’s important.

I think those two dynamics are supported by a third dynamic, so what the hell can these directors do about these responsibilities? They can’t lead the organization, manage the organization, that’s what they hire the C-suite for. So they recognizing as a collective, that at times, even though we’re the smartest people, we hire smart people and capable people, which most of them are, we have good intent, we still make bad calls. So boards are now looking at themselves in the way they make decisions and are aware that they haven’t always as an industry, boards and directors haven’t always done that job well. So they’re wanting to open up that black box of, how do we produce the decisions we have? And how do we ensure that they’re the right ones that the community and the rest of the world would expect of us?

Transcript

 

Renee Holder: So, Rob, some of our listeners are coaches with an organizational psychology qualification, but many of them do not. So for those who are curious to understand the connection, could you talk to the application of organizational coaching in the executive coaching work you undertake.

Robert Newman: So organizational psychology, everyone would have heard of the term psychology, organizational psychology is the application of that in corporate setting. But let’s go right back to what a psychologist does, because all organizational psychologist (org psych) started with a base of psychology training. A psychologist looks at the individual’s values, personality, motives, drivers, talents, skills, hopes, fears, intellect, and how all those attributes come together to affect behaviour, and whether the behaviour is effective or ineffective given the context it’s within. So that’s a psychologist. And so, we have people that analyse people and provide counselling or interventions to help them get on in life, better deal with their depression or whatever. That’s a psychologist.

An organizational psychologist takes all of those attributes and looks at them in the context of a job, of a workplace, of an organizational culture.

So an organizational psych looks at how individuals bring their talents, experiences, values, humanity, to the tasks they have to do, and how collectively together they can operate with other individuals, so teams, divisions to produce outputs in a corporate setting. And I suppose from an organizational psych’s point of view, we’re interested in not just individuals, but how they look collectively, and how human beings interact with structures and systems and work processes and business models within the context of an organization. And how all of those interactions between those systems are supported by strategy, supported by culture, are supported by oversight and governance by management and boards.

So an org psych looks at the whole system, and how behaviour plays a big part of it, both at the individual and collective level. If I go a little bit further and say, what does an org psych do in a boardroom or an executive team, I’m looking at, and in particular in boardrooms, I’m looking at how behaviours of individuals aggregate in a collective behaviour to produce decisions. Because essentially boards main responsibility is to produce decisions that offer a direction and oversight for an organization. So I’m looking at how individuals perform collectively together to produce effective or ineffective oversight and governance decisions.

Renee Holder: We know there’s a number of industries who are currently under increased scrutiny, governance and that decision making process you just referred to is really in the spotlight. So your work really gives you a unique insight into how this current environment is influencing conversations in the boardroom. What have you been hearing in recent times?

Robert Newman: Two key trends are emerging amongst directors in boardrooms now. And I think many of the listeners will be familiar with at least one of these. 

The first one is, directors are getting a clear message that they are going to be held responsible for the performance and behaviour within their organization. I think there’s been historically an expectation that directors were there to support and advise a management team who took responsibility for the organization. But royal commissions of recent years and governance failures of recent years have pointed out very clearly that directors hold a significant amount of liability when it comes to poor behaviour and poor performance by organizations.

So directors are being shocked by that, equally, but that’s also leading directors to recognize that the community expects them not just to be responsible for ensuring and maximizing profits, and ensuring return for shareholders, which a number of directors thought was their primary role, represent shareholders. But the community doesn’t expect just that anymore. They expect the board to represent the long-term interests of the organization, and especially its responsibilities and interactions with the wider community. And so boards are recognizing that their responsibilities are out to a wider stakeholder group than perhaps many of them thought. And many moving and stepping up to that mark. So I think that’s important. I think those two dynamics are supported by a third dynamic, so what the hell can these directors do about these responsibilities? They can’t lead the organization, manage the organization, that’s what they hire the C-suite for. So they recognizing as a collective, that at times, even though we’re the smartest people, we hire smart people and capable people, which most of them are, we have good intent, we still make bad calls. So boards are now looking at themselves in the way they make decisions and are aware that they haven’t always as an industry, boards and directors haven’t always done that job well. So they’re wanting to open up that black box of, how do we produce the decisions we have? And how do we ensure that they’re the right ones that the community and the rest of the world would expect of us?

Renee Holder: Rob, you mentioned a moment ago that we are talking about smart, highly qualified, mostly well-intentioned directors who are sometimes making some poor, poor for decisions that don’t reflect well on themselves and their organizations. So why is it? Why are these poor decisions being made?

Robert Newman: Okay. So the question is, why do good people end up sometimes doing bad things? I can probably answer this question from two perspectives. One would be, why does this happen in the C-suite? Why do the executive sometimes who are all generally highly qualified … In Australia, we rarely have people at this level, who we would call incompetent or even poorly-intentioned. So that’s something we can wipe out. So it happens in the C-suite and it happens in the boardroom for slightly different reasons. So I might start with the C-suite first. So why do highly experienced, capable, highly competent, motivated and motivated in terms of their bonuses associated with some of these business outcomes, why do they at times in the C-suite, the executive team, why do they fail? Why do they make dumb decisions that lead to royal commissions, for example.

And if I look at that in the body of knowledge that we have accumulated in org psychology, at least over time, we’re actually seeing that all the capability and good intention in the world falls foul when individuals get into a group and derailers behaviours emerge. And so I think a number of your listeners would have heard of leadership derailers. These are talents that are often quite heavy, lots of them in executive roles. That’s how people got to the top, they have these massive talents, but they get the dark side of the talent comes out when they’re under threat, or in contentious and difficult circumstances. And that’s what we see in the C-suite. We’ll see the dogmatic behaviours of a CEO, we’ll see the competitive behaviours of other executives competing for the same pie in terms of budget or in terms of tension of the board. And those behaviours lead to poor decision making.

And associated with that as some technical elements, the systemic stuff on looking at the remuneration schedules, what are people giving bonuses for? And there’s a lot of perversity in terms of bonus schemes. When you get people to focus on increasing profits, what you’ll find is that something else will be burnt to do that, and it might be for example, they start selling stuff to people who they shouldn’t be selling it to, etc. So the perversity associated with those schemes. Essentially, the bad behaviour comes out in the boardroom and plays out in some of the systems and processes. So that’s how, I suppose, smart, well-intentioned people operate badly in the executive team.

What does it look like in the boardroom?  It’s a little bit different because the board essentially only really has two roles. It doesn’t run the business per se, it doesn’t implement strategies or anything like that. That’s the management team, the executive team. The board’s job is to make decisions, number one, and provide oversight, number two. Really, those are the outputs of this groups. As a group, people that come together for about, it’d be about 30 hours a year, once a month at the most, to make these decisions and provide the steering of this organization. So how do those well-intentioned people and well-skilled people make poor decisions? We actually find those derailers come in again, this is the individual behaviours, but it actually creates a particular culture within the boardroom.

And then we would have seen recently in boardrooms to look at, is there certain types of cultures that are created in boardrooms that lead to governance failure, and there are some. And they’re created by individual behaviours collectively aggregating into a certain culture, maybe sceptical culture or a culture that’s very hands-off within the boardroom that allows bad decisions or poor oversight. So it’s not individuals intentions, but its collective outcomes within a board, especially around decision making, its willingness to have oversight.

Also, within the boardroom, they have things that lead to failure are the processes for decision making. These are people who have access to all information that the organization is willing to provide, but it’s just too much. They have an hour to make a really complex decision and they’re just not going to be over all of the detail. The management team has all the detail and can provide the board what they like. So the board needs to have powerful decision making analyst analysis processes, and often boards don’t approach that in perhaps a formal or methodical manner. So decision making at the board level can sometimes be a little ad-hoc. And so boards filed through not being aware of how they’re making decisions, they fail through poor behaviours, mostly in terms of what’s the mindset and culture that is created in the boardroom. That’s how board failure happens.

Renee Holder: I understand that you contribute to and facilitate AICD’s advanced courses in director behaviour and managing dynamics in the boardroom. Through these courses, you explore how decisions are made and look at some of the consequences of those decisions. So how would you suggest we best support directors towards good governance?

Robert Newman: Okay. What’s important here is that directors tend not to want to take on coaches. That’s an important point. Many of these people have been at the top of their game, they perhaps had coaches as executives, they got to the top. And at this point, they’re feeling perhaps, who would coach them? They’re at the top. Who would offer that advice? And a number of them are in the time in their career where they don’t really necessarily want to face some of the demons. They had to do that when they were in their executive roles. So they’re hoping that perhaps they’re a fully formed perfect decision maker at this point.

So coaching is only acceptable to a particular type of director. So we still coach directors, but not many of them seek it. Whereas with executives, it’s a relatively common request. And the primary difference for an executive is they still have their goals that they need to achieve. They’re targeted towards their bonuses or whatever else. And their success and fire is highly visible and they’ll be held to account for that. So coaching seems, I’ll do anything to improve my performance, because it’s visible, and I’m bonused on it, and my whole career lies on it.

A director doesn’t have that same sort of visibility in terms of outcomes in their performance. So coaching is not a big deal. But if the question is how do we help coaches? Sorry, how do we help directors? As coaches, what can we do? First point for me was, if I’m working with boards, one of the key things I want to work with is, or want to train them, it’ll help them with is providing peers feedback. These are people who they need to influence, move with and get on well with on a regular basis, their peers. So I would be coaching or training the group of directors in how to provide each other feedback, how to do it regularly, and how to do it to the point where they’re providing the honest truth rather than second versions of that. So we can help directors by helping them to give each other feedback about their performance, their behaviour and their influence.

I think the second thing we can do with boards that help them, in particular, from a coaching point of view, is to train chairs in how to support groups in collective decision making, and how to support groups using different models of decision making, intuitive models, more rational and methodical models. Because boards are often dealing with decisions with such complexity that sometimes they need to gut feel as part of their analytical toolkit. So training chairs on how to run meetings, such that those different decision making models can be brought to the fore in decision making and boardroom meetings. So training chairs.

I think a third area for me was coaches can actually train collectively a board or help a board gain deeper insight into its own dynamic. The boardroom or their own group dynamics. And they might be using models like team development models and doing a survey with the group and providing them feedback about the level of trust and honesty in the room, the level of commitment to each other, the level of willingness to step up and fight negative feedback, et cetera. That sorts of stuff that you would do in a team development activity by doing an analysis and then providing feedback to the group for them to recognize where they’re at. Doing a collective profiling for the group.

So profiling, using some psychometric tools, whatever they may be, personality values, whatever you like. And showing the group what they look like as a group. And identifying are there any collective blind spots. An example might be, you may have a board which is full of people on a personality scale have low adjustment, highly passionate driven people, but a tendency to be disappointed and get a little bit of moody and at times probably a little angry and annoyed and frustrated with each other. So if you have a group of people that predominantly have that and you’re able to feedback, you guys are passionate, what’s the downside of that? And allow the board themselves to make some commitments within the boardroom about how they interact with each other.

You might have noticed in my theme of how to support boards. Essentially the board is a decision making collective, it’s a collective brain. And the most powerful coaching we can do is train the brain. Train the collective brain how to manage itself, which means give them tools to start setting expectations and making commitments between each other. Rather than the individual coaching that we’re more familiar with at the executive level.

Renee Holder: So Rob, we’re starting to get a sense of the sort of work you’re doing at the board level. Could you share with our listeners one or two examples of a specific scenario or two, where you’ve been engaged to work at the board level and the sorts of outcomes that you’ve been able to achieve.

Robert Newman: Okay, very good. I might start with one which perhaps and coaches would be more familiar, perhaps people who’ve done team development. I mean, this might resonate for many listeners. One of the things we have boards, and we need to remember this or a couple things about boards we need to remember. Number one, these are people that don’t know each other particularly well, they rarely see each other, once a month at the most. Sometimes they’re actually put on boards for a particular role. They might represent unions, for example, or they might the representative of a venture capitalist that’s funding the business, or they might be a community rep. So people have particular roles there. And not everyone actually understands what is the difference between governance and managing a business.
So people that don’t know each other, don’t always know their role, and at times come with not so much hidden agendas, but varied agendas. And yet as a board, they need to collectively land on what is most important for this business for us to focus on. And they need to be looking out for a collective understanding or creating a collective understanding of what is in the best interest of this business and always pursue that.

So people who don’t know each other, people who don’t agree necessarily on what’s the right thing to focus on, and people who don’t always know the role, have to do this collective thing. So it’s a relatively complicated thing to do.

And yet, when I look sometimes with groups, I use a basic board. I might use a basic intervention that many team development guys are familiar with, and that is, let’s set some ground rules on how we are to have discussions. So as I said, lots of team development people would be quite familiar with this. It’s sitting down with the group and saying what’s the purpose of this board? What’s your goal? What do your meetings look like? Very good. What’s some ground rules of the way you would like to discuss or topics or to progress those discussions or interact with your colleagues? So let’s set some ground rules. And once those ground rules are set, how do we make them live?

So we’re setting some agreements around how people are to transact their role in the boardroom. And primarily, you set those ground rules so that over time people gain trust and respect of each other because people follow the rules. And when the rules are followed, trust and respect emerges. I can predict what you’ll do, that’s something I can then see you as reliable because you’ll follow the rules. And then we actually stop forgetting rules because we don’t need them anymore because our foundation now, our common ground is a degree of trust and respect that I can say things to you and you will respond appropriately in a productive manner that helps us move forward. So establishing ground rules with a group.

Now, that would probably will be one of my most basic interventions I would do with the boards. But when you think about it, you often use those sorts of tools with most of your work. So I think about it, that’s probably about 30% of my work I might do that. At least as initial intervention with a board. If I take it a little bit further and say, what else might I do with a board? I’m thinking about a board I worked with a while back. And one of the issues they were facing was, it was in a highly regulated industry, where community expectations were very high. And they were facing rots within their business where people were pursuing bonuses using nefarious acts, selling stuff to people they shouldn’t be selling. The sorts of stuff you might hear in a royal commission. Some of the behaviour in the organization.

This board said how can we oversight that? How can we know about that? If we ask people, they lie. It’s hidden information. And yet we are going to be held accountable for that behaviour. Even asking management. They would say management, usually you’re supposed to oversee that. Management would go, how can we? People lie to us. We’re caught. So the board and management were asking, we can’t be responsible for our risk culture, the behaviour of individuals within our organization. How can we do that? Especially because they’re going to lie to us. It’s all tricky. And my response to that, of course, is yes, but that’s the expectation of the community and of your stakeholders that you will. If not you, who then? Who does this?

So board coming to terms with how much it actually deal with situations where it doesn’t have access to clear, precise information? And what might I do about that? And how might it hold management accountable for that? Because to tell truth, management is being a little twee if it to say that we didn’t know that banana economy was going on down below and that people were trading awful, stealing our materials, or treating our clients badly so that they can increase their bonuses. It’s not true. Management is aware of it at times. I’m not saying management is evil, I’m saying management is oriented towards producing the outcomes the board wants and shareholders wants. So profit is king sometimes, cutting costs is king. And management at times is tolerant of particular behaviours that still achieves that outcome, but perhaps might burn other areas.

So how does a board deal with that? It’s a part of my role as an org psych was to help boards look at what are some of the metrics we look for, and cross reference against other metrics, rather than just relying on the engagement score from the organization, or using 360 feedback to see whether there’s anything going on. How do we actually go below the surface and look at the shadow culture? The behaviours that people might want to talk about, but still exist in the organization? And how does a board get a bit of a finger on the pulse for that, and how do they hold management accountable for that?

Renee Holder: Specifically, around coaching, sounds like there’s a lot of things you do and a lot of areas of expertise that you have. I’m wondering how you define the type of coaching that you do if someone was to ask you at a barbecue on the weekend?

Robert Newman: Yeah. I am a particular type of coach. I come from a particular bend. So I’m an org psychologist coach, if we’d look at that way. So in particular, if I looked at my body of knowledge I apply to my work, I am pretty decent at psychometric. So I can measure the man and the woman, understand motives, help them understand and gain insight into what drives them, what works well, what behaviours they are talented in, what areas they’re not. Whether they have EQ and what they need to develop, if they don’t. So psychometrics, deep insight into self. Understanding of how they might change self. It’s all providing feedback, for example.

The second thing that I suppose an org psych can do is focus, what does performance look like at an individual level? That’s that first part of perhaps, but what’s it look like collectively and how do you create systems to drive that? Not just the leadership behavior you might do as an individual, but how might you create some of the monitoring systems or the work processes or the organized and structural elements, the sub-teams to ensure that people are on track. How do you lead without having to be in the room? Using systems, processes, those sorts of things. So how performance comes through not just individual behavior, but also the systems that support them? I suppose that’s my second area.

And my third area is, what does collective behavior look like? And how do you take responsibility for that? It’s quite common. I recall the CEO telling me, how can I be responsible for 5,000 people’s sense of satisfaction in their work? How can I be held responsible for that? I don’t know any of these people. I don’t speak with them. How can I be responsible for that? And of course, I turned around and said, “Well, you are. By saying what you just said, that doesn’t negate the fact that you will be held responsible for it. So you better figure out some ways.” So all this lead of thought was that as a leader, all I do is tell people what to do. And the words that came out of their mouth was the only response ability that they had. And of course, they’re responsible for all the business systems, processes, the way they organize their policies, the way the organization lead itself, not just through their individual behavior. So the CEO needed to know that. I’ve forgotten the question.

Renee Holder: I think we’re getting a sense of how you define your style of or your approach.

Robert Newman: Very good. I think the last part of my approach is perhaps what I’m not. That would be, I’m not a mentor, per se. I’m not a mentor. I’m not an ex-CEO. I’m org psych. I’m not an ops manager. I don’t give advice in areas where perhaps your business may improve. I’m not there to generate initiatives with you, unless they relate to culture, leadership and behaviour. So I come from a particular bend, and that’s org psychology and how human beings interact with systems to produce outcomes which are beneficial to the organization and society, and individual change in group change within there. So I come with a very particular bend. I’m not a counseling psychologist, so I’m not an org psych who happen to be a counselor. So I don’t tend to sit there and help people commiserate through their problems very much. I’m a little bit more technical than that.

Which kind of means my coaching and guidance often is time limited to individuals gaining insight about themselves. Time limited and often focused. So I may work with a client, an executive, a director around a very particular role. For example, I might coach a chair who’s having difficulty managing their board or their relationship with the CEO. I might do some psychometrics around but I’ll also be focusing particularly on that. I’m not the jack of all trades coach where someone will come and ask, can you tell me this? Can you do that? Generally, I’m not. I mean, I can do that. But that’s not my best talent. I tend to focus more on the org psych element.

But as you probably have heard in some of my conversation, the org psych element bleeds into almost every part of the business, so I probably have something to say on most things. But I don’t have the last word on most things. I have the human interaction with system and productivity word. There’s a whole lot of other elements, IT, law, legal, finance that I have very little say on, generally.

Renee Holder: So you’ve touched on a lot of areas that inform the way that you work and we get assigned to get a sense of them now. There are so many fields, knowledge basis and pieces of research that you would need to assimilate to be able to apply in a practical way. And I appreciate this as a very big question. And I don’t want you to give away all of your methodology. But how do you actually assimilate all of that information and all those bodies of knowledge to be able to work with someone practically?

Robert Newman: Very good. Well, there is no methodology to give away. That’s fine. At the heart of it, and I think a lot of coaches and consultants would respond directly to this themselves, it’s the idea that every problem is unique. So there’s a customizability, which has the upside of I have a unique talent of being able to bring information together. And if you’re go to doing that, then you do well with customization. Has the downside that I can actually replicate most of my interventions because they’re also unique. So someone says, what do you do generally here? And I go, lots of different things. Depends on the circumstance.

So if you think about you go to a doctor, normally they will give you, and of course, psychology from a medical model version, at least or partially, they’ll ask a bundle of questions based symptoms. You’ll say, my knee hurts. They don’t give you the knee hurting intervention. They’ll say, does it hurt like this? Does it hurt like that? When does it hurt? How does it hurt? Does this hurt? And through those diagnostic of symptoms and consequences, they’ll say, okay, this is the form of intervention you need. You don’t need medication, you need to go see the physio. So I’ll then do that.

And the question then becomes, sometimes at the end of the diagnostic process, I might go, your problem, as best I can define it, has elements of leadership associated with it or whatever else is my body of knowledge. But I can also see it has heavy requirements around other technical functions such as I can see, there’s actually some marketing and communications weaknesses here. And that’s not my body of knowledge. I can hint at it from a human point of view and what information people need generally, but there are specialists in that area. So all end up being offering an intervention that helps and often kickstart perhaps where people are at. And then I’ll have to … Me or my client will often bring in other specialists, which again, is part of my time limited role in interventions.

The different bodies of knowledge you draw upon. I have, as most professionals do, I have professional development requirements every year. I think monitor about 100 hours. There are months when I’ve done that 100 hours within the first week, in terms of professional development, research, self-education, sourcing models, sourcing theory, reading articles. Essentially, I don’t do it willy-nilly, I don’t enjoy reading academic articles, except if there’s a problem at hand. So when I’m doing my diagnosis, I’ll just be drawing upon the literature all the time in the diagnostic phase, and then it helps me shape up the nature of the problem. And which helps me then to shape up the nature of my interventions.

Renee Holder: Lots and lots of commitment to professional development there.

Robert Newman: The funny thing is, I don’t ever write it up. So sometimes you have to write it up for official PD points. The proof is a bit of pain. Actually, I think I said that wrong. I said 100 hours in a week. I wouldn’t do 100 hours in a week. That is crazy. I’ll do it in a month. I’ll do a year’s PD in a month.

Renee Holder: And I’ve read in preparation for our conversation today that your primary goal is really about creating alignment synergy between people and organizational systems. And the purpose of that is really about high performance emerging and being sustained. So, from your perspective, what or maybe it’s more of a who, who is responsible for enabling this alignment and synergy to happen?

Robert Newman: Okay. The easiest answer here, so it’s not me. I’m a guide and a support. It’s probably not the coach, the consultant or anyone like that. We have bodies of knowledge which can help in that. It’s probably the executive. If I look at who creates the business systems, the business model, the machine that produces an outcome from a company point of view, and who oversights that and who tinkers with that to make sure it’s efficient, it’s an executive team. It’s the CEO and their colleagues in the C-suite. They’re responsible for it. And in fact, most my work with boards will be to make sure that they hold the management team, the executive team responsible for that.

But if I was to dig down and say what does that mean? The alignment between human beings and the output that they produce to ensure that that system is sustainable, it actually means human beings don’t want to be cogs in a wheel, as we all know, human beings, essentially, their hearts seek meaning in life. And they seek a sense of contribution to a greater whole, something larger than themselves. So when I think about how do we create that kind of alignment between human beings and the work that they do and the outcomes that produce value for the community around us, I think about the how do we lead and create companies that create meaning for its workers, and create a sense of contribution to a greater whole.

We know when this is in place, that workers will basically do it as a volunteer job, pay will be somewhat irrelevant to them. And it should be. Because in the end, this is expressing who they are and who they want to be. It gives them great heart. So work actually becomes a calling rather than a tedious act you have to do to pay for the rent so you can buy beer at the end of the day. So I’m looking at how do you create that? And I suppose on from a governance point of view, one of my key roles in recent years has been reminding directors that our stakeholders and shareholders don’t expect us to grind out cogs into the ground in terms of the people that we have. They’re not just grist for the mill.

There’s an expectation that we’re all part of a system and that system must be wholesome. And to be sustainable, human beings must be able to live with it and thrive within it. And that’s the ultimate sustainability. It’s about, does this do well for human beings? And if it does and produces the outputs it needs, then that’s the ultimate sustainability.

Renee Holder: And although I’d love to end our conversation on purpose and meaning and contribution, thriving and all of those things you mentioned, I am also interested in asking your question about tools and psychometrics. Because I’m aware that you also hold directorship roles with an international supplier of clinical assessment tools, and another with a psychometric testing firm. So I and our listeners would be keen to hear as well, how you see assessment tools and psychometrics complementing coaching in the future.

Robert Newman: Okay. To answer that question, I might break down what psychometric tools are, just from a psychologist point of view. Perhaps less the clinical psychologist, more the org psychologist point of view. Essentially, if I think about human beings and how we measure them using psychometrics, I think about three areas of measurement, just broadly and then break down into lots of sub-components specifically, broadly. First area is abilities. What you can do. So IQ, intelligence is an ability. EQ is an ability. Hand-eye coordination is an ability. So what are the capacities that the human has? And normally these are typically associated with some hardwired elements. IQ has an element which is hardwired, you’re kind of born with it. I mean, you can increase your knowledge. But in terms of your processing speed with that knowledge, it tends to be hardwired into you.

So, abilities, what a human being can do. And some people can be … Tiger Woods is a golfer of some kind, because hand-eye coordination is too poor. These are abilities. The second area that we can measure is what we might call personality/values. And this is the error of all the personality tools, derailers, value tools, DISC models, MBTIs, and they speak very much to categorizing human behaviours and the habitual behaviours that individuals have. What is this set of tools really good at predicting? This set of tools is really good at predicting how people will interact with others, how that will lead, how they will deal with difficult circumstances. But predominantly, it’s a social interaction, a set of tools that tell us how we will move with others. So that’s the second group. The first one is abilities. The second one has to do with some sort of personality/values.

So the third set of psychometrics has much more to do with behaviours and competencies. So these are, what is a person going to do and how might they apply themselves to the task at hand? There’s elements of personality that kind of indicate that the personality and values tend to be motivators or contextual elements on how a person delivers their competencies in their role. We’re not just talking about jobs here, it can be competencies to be a kind father, or to be a good teacher, or to be a caring partner. So the competencies are a full range on thinking there. So its knowledge skills and the behaviours that deliver upon them. So those are kind of three areas that we would measure.

Most psychologists and most practitioners in general tend to like the tools that they’re familiar with, which and I’m no different from anyone else. But on average in my work and coaching or in providing groups insight into their dynamics, I tend to choose the tool that suits the purpose. So for example, if it comes to personality I’m using with a group, while I don’t particularly like the Myers-Briggs typology model, it’s been around a long time and some groups, and some leaders are highly affiliated with it and like and love it. So they might ask me to run a group development activity or to look at perhaps ground rules again. And if they asked me to use a personality and they say, which one are you familiar with? And I say, Myers-Briggs. I grit my teeth and go, no worries, I can use this.

Because essentially psychometrics in the way you use it in coaching is primarily an insight provision tool. So its aim is to gain traction in terms of a person’s self-understanding himself or they group. So in some respects, it doesn’t matter what tool you use, as long as the tool gets some penetration. And the primary criteria I’d use for a tool is its accessibility by the audience. As a psychologist, I can make most of these tools get me enough penetration, even there’s some that I wouldn’t necessarily touch with barge pole. I wouldn’t touch with a barge pole because it’s quite difficult to use. They don’t work very well. But most tools that we know in the familiar parlance, they’re actually quite usable. Some are better than others, but the one that’s acceptable to my audience will be the one that would use.

I think about the tools that I use most at the governance level. In particular, we can assume that from the ability point of view, these are all smart people. Can’t always assume our EQ but we can assume smart. From a competency point of view, these are people who’ve hit the top of their game as CEOs, CFOs, whatever it is, so they know how to do that. We can’t assume they’re good at necessary leading or bringing people together or collaborating, but can assume a lot of the other ones. And in fact, my primary form of intervention is to increase insight of the director themselves or of the group about their own internal dynamics, what goes on behind the scenes.

So if I look at the three sets of types of tool sets I’ve used, I’d focus more heavily on personality. So I might use something like a Hogan Personality Inventory or OPQ personality inventory. My preference is Hogan. And I might use a dialer tool to look at some of the more difficult behaviours that we sometimes see in leadership groups. And I use the Hogan development survey in that regard. But again, there are other tools to use. So I would use perhaps that second crop of tools, the personality and value ones. And why is that? Because essentially, from a board point of view, the primary method of them producing anything is through interactive discussions with colleagues. So that’s how they produce decisions.

If we look at what shapes effective discussions with colleagues, IQ does, but I’ve taken it for granted. Mostly it’s about personality, and how they use that to influence. And so personality is a dominant tool I might use in that regard. But my primary, I see the tools as a tool. I don’t see them as reality. I don’t see some of the pigeonholing we might use with tools as perhaps the main outcome. I’m actually seeing deeper insight by the individuals and the group about their colleagues as the primary outcome I’m aiming for. And if I get a little bit of that, and they’re actually starting to see some of their own, yes, when we do that, we all tend to go like this. I can see that in our discussions ongoing, that’s what I wanted the tool for.

Renee Holder: Wonderful. Thank you, Rob. We’re coming to the end of our conversation today or come to the end of the conversation. It’s just been really, really valuable for me and I probably speak for all of our listeners in terms of just hearing from your experience and sharing your insights, and a few stories and also to some suggestions there on a range of topics. We’ve touched on everything from dynamics in the boardroom to psychometrics, the application of org psych in coaching and a whole range of things. So, thank you. Thank you so much for joining us for IECL CoachCast today, and we look forward to a chat sometime again in the future.

Robert Newman: Thanks for having me.

Pounéh Sedghi
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