How does a CEO uncover a board’s doubts?

April 12, 2011

Writing in The Wall Street Journal, Major General Robert Scales draws a lesson in leadership from Donald Rumsfeld’s recently published memoir, “Known and Unknown.”  Rumsfeld has been (among many other things) a successful Congressman, White House Chief of Staff, Defense Secretary (twice), and Fortune 500 CEO.  Scales wonders how and why an accomplished leader such as this could fail to sense the strategy slipping and doubts growing.

Using an especially apt parallel for today – the sesquicentennial of the first shots fired in our Civil War –  Maj. Gen. Scales sees a historic parallel in Lee’s failure at Gettysburg:

Lee’s generals knew that modern weapons and a determined enemy would turn the charge into a disaster. But who among them would step forward to question the supremely confident general known as the “marble man”? Lee would have been surprised to discover that his generals had doubts, because he considered himself open to their opinions. But his own stature and idea of himself created a barrier that only the trauma of failure could overcome. Thus perhaps in “Known and Unknown” Mr. Rumsfeld inadvertently reveals himself as the 21st century’s first marble man: supremely confident of his ability to manage a war of machines and sadly unapproachable to those below him willing to offer an alterative view of the shifting conflict. In truth his formidable and dominating personality, which had served him so well before, now served to impede those trying to steer a different course—the one that would prove successful in Iraq after Mr. Rumsfeld’s timely and inevitable departure.

It’s easy to imagine either man’s staff struggling to effectively press their contrarian advice.  Any number of factors could cause one not to risk a career “Pickett’s Charge”:  the leader’s force of personality, the high stakes involved, the constrictions of time, the subtle team dynamics of consensus building, or even an over-reliance on formal procedures.  And what’s true for a strong general or cabinet secretary is true elsewhere – including CEOs and their boards of directors.

Many small private companies have no or underdeveloped boards.  We encourage all our portfolio companies to build great boards and then use them constantly.  Entrepreneurs are almost always surprised how much value a good board can bring to their companies.  In our experience, boards work best when members’ informal modus operandi animate the formal framework of decision-making.   Are their relationships strong enough to compensate for the all-too-human tendency to learn only after it’s too late?

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