In a much acclaimed article by Gabor Steingart, the comparison begins with
“The doghouse is for the dog, the board of directors for the cat.”
Hermann Josef Abs (First member of the Management Board, then Chairman of the Supervisory Board of Deutsche Bank in the 60s and 70s of the last millennium). In fact, the function of the Supervisory Board is being given greater focus, currently around the personnel of Paul Achleitner.
We need more transparency
In fact, confidence in the function of the Supervisory Board is no longer at its highest. There are two reasons for this:
The Supervisory Board is often staffed by the old Management Board.
The function of the Supervisory Board was delegated more and more to voting rights advisors.
The most important function (of the many held by the Supervisory Board) is to seek and appoint a reasonable and well-functioning Management Board. As Gabor Steingart explains, this has not always been the case.
A decisive criterion: the search again for the supervisory board itself. And here it is time for a paradigm shift to take place in the large corporations as well. It should be the person on the supervisory board who has proven competence not only in the specialist area of the company, but primarily also management experience behind him: A retreat to a pure cuddling course with the company’s executive board should thus be avoided.
I am not only talking about keeping to the cooling off phase, which is often ignored, but also that it is often appropriate to fill the supervisory board from a third party. The competences to supervise the board can also be acquired elsewhere in the economy.
Especially in medium-sized and family-run companies such a rethinking has already taken place. Here the Supervisory Board is staffed according to other criteria than in large corporations. It is about time that the same applies to them as well: Away from uniformity with the Board of Management, towards a critical body that constantly questions the course of the Board of Management. It also helps that institutions such as the Anglo-American IOD help the function of the Supervisory Board to become more professional.
To this end, the Supervisory Board must be staffed differently. As long as the positions have the appearance of “supply posts”, trust will not be restored.
German version here.
In the past I have already dealt several times with the topic “NewWork”. My focus here is on how new ideas and concepts can be established in organizational structures. Phrases like “always focusing on customer benefit” are not very helpful if you are established in a company with several 1,000 employees.
Decisions without safety net
Both in projects and in middle management it is becoming increasingly evident that decisions are not only made, but also that a lot of capacity is “burned” in the justification of a decision. This culture of justification (the “backups” in the slide sets) may seem helpful to the project managers and division managers. But they only help the decision maker in case he has really made the wrong decision. And then other mechanisms are needed, not the questioning of the original decision making.
This discipline is due to the organisational structure. The project and division managers have been conditioned over years to act in this way. And so the justification system was optimized over a long period of time.
The dismantling of this culture must take place across all hierarchies: Every form of approaching new working structures must have a stable size: Trust. Without this, it is not possible. In the vast majority of cases, employees at all levels are in a position to make their own decisions in their field of work. A manager or project manager should be able to assess this area. If a wrong decision is made, everyone should work together on the solution and not on the search for the cause. With this one can then go new ways, be it only partially (in projects / in the area) or also generally. Executives and project managers who cannot deal with this are a problem that can only be solved by top management.
The safety nets must be dismantled across all hierarchical levels. This includes senior management as well as other levels such as division managers and project managers. Trust must once again become the centre of work in an organisation. Without trust, we remain in the old models.
Disclaimer: In this article I refer to having to justify everything exactly in advance. I do not question the sense of a functioning risk management system. I still believe that a functioning risk management system is not only sensible, but also vital for survival.
German version here.