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Trapped by your experience…..

Posted by on 15 Mar 2015 in The Capable Leader | 0 comments

The following is the transcript from an interview with author of The Secret Life of Decisions, Meena Thuraisingham, and the editor of South Korea’s largest business magazine, MAEIL Business Newspaper, December 2014. The book was translated last year into Korean and in March 2015 into Mandarin…….   What is the reason that some people become trapped by their experience? Because it feels safe to rely on what you know. Of course the danger is always that you don’t know what you don’t know. In a fast changing environment where much of what we know is becoming obsolete so quickly, this is a real danger all decision makers must be alert to.  Do you think leaders of businesses are more prone to falling into this trap?  The dangers are greater for leaders. Experienced leaders particularly successful ones have to be vigilant. This is because your success gives you a confidence as you advance to increasingly senior levels in an organization… this confidence can sometimes blindside you into thinking that what has worked before will work again. My book provides a number of examples of biases that can potentially blindside even the most experienced leaders amongst us.  How do leaders guard against falling into this experience trap? It is possibly only by being more open to the input and advice from others (including criticism) along the way. While this is something most good leaders do naturally, it is especially critical when you are for example working on a complex project or business challenge. The more complex, the more critical it is for you to surround yourself with mentors and trusted others, and dissenters too, who will be prepared to provide you candid/honest advice even if they think you are not going to like/agree with their advice. A failure is only a failure if you don’t learn from it. The people around us can provide us much of that learning. Unfortunately sometimes we are not prepared to open ourselves to constructive criticism along the way. Experience is necessary for good decisions but it can be double-edged sword as you pointed out in your book. How can leaders extract the right lessons from their experiences? Yes experience is a double-edged sword. You can draw the right lessons from your experiences but you can also draw the wrong lessons from your experiences. Leaders who develop strong reflective skills, continually challenging their own thinking will extract the right lessons from their experience. For example asking ourselves if this strategy you vested so much of energy and time on is still relevant given the changing market context. Asking what am I not seeing? What critical voices am I not paying attention to? Are there some weak signals...

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Boards are unique and complex groups to study

Posted by on 15 Mar 2015 in Doctoral Research | 0 comments

Boards are fascinating groups to study for a number of reasons. They do not resemble intact teams in the strict organisational sense. They differ in a number of significant ways. For example, boards comprise a group of equals – seasoned, credentialed and expert in one or more fields – generally of equal status and independent minded. Their roles are entirely “cognitive” and their effectiveness depends entirely on how they interact and work as a group, not on the execution of an organisational outcome. In this context real power may lie with the governed i.e. management. This is because board members will always be operating with less information than management about the company situation or about running the company. This information asymmetry means the director’s task is to keep well informed without doing management’s job and frustrating management in the process. Adding to this complexity of governing, is the reality that board members do not have the interaction frequency enjoyed by many other teams or the opportunity to develop the team norms that build up with regular and frequent interaction. They generally meet, as a group, episodically usually up to 12 times a year, not allowing for the ties to develop and strengthen as in the case of intact teams. Finally the role of the board is ambiguous in nature as much of board tradition today has arisen out of norms derived from regulatory codes and based around the principal agent paradigm that has been influential over many decades. Such theories either ignore or are less sensitive to identities, interests, motivations and interactions between directors, as governance actors, embedded in the company context. How the director construes their own role on the board and how they fit into the board group will have an influence on how they individually approach their board work. That is to say a director is confronted with a network of relationships into which they must fit themselves, when they join a board. This is complicated by power differentials that may exist in the boardroom, which may influence how a director’s knowledge and skill is valued and used and the willingness of a director to exercise influence and independent mindedness. Much of the theory of corporate governance has continued to be explicated using economic principles and infers what boards should do rather than what they actually do. Such theories while making an important contribution do not offer complete explanations of the board as a complex “social system”. A fuller more rounded understanding of boards will come by drawing on social psychology constructs, and undertaking board research with less reliance on the use of questionnaires and surveys, which has up to now only provided ‘distant perceptions of...

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