In an increasingly public world, we have the privilege of observing and learning from organizational failures. What I mean by that, is much of the employee outrage or internal power struggles that we see in the news every day can be prevented by addressing the emotional disconnection among the board, executive team, and management.
Most disconnections happen due to miscommunication. One person reaches for another in a time of need and doesn’t get the response they need. Instinctively, they push harder and often come off as critical or blaming. Obviously, the other person will respond defensively and this puts these two highly intelligent people in a negative interactional cycle that spirals and consumes their communication. This can happen on any level of an organization but is particularly toxic when seen at the executive and board levels.
To stop the cycle, the involved parties must be fully aware of their emotions and practice empathy. They must work together to stop the negative cycle and start positive interactions. I want to give two examples of this negative cycle in real companies and how it is affecting the leadership and organization.
First, the financial services holdings company, Credit Suisse has lost at least 18 of their traders and bankers in the last six months. This can be directly correlated to the brash and aggressive comments made by their CEO, Tidjane Thiam. Thiam took on the role of CEO less than one year ago, and since then he has insulted bankers, described bond trading businesses as “ugly ducklings”, and publically accused his bankers of hiding losses from him. Clearly, there is a disconnect here. The board at Credit Suisse should be questioning what they want the public face of their company to look like and how they want their employees to feel about their executive leaders. Thiam is likely acting out due to worry and frustration with the board and the company. Instead of expressing his feelings appropriately to the board, he is pushing back to the press which puts the company in a vulnerable and dangerous situation.
Employees of the organization have said that the unpredictable CEO has lost the respect of the traders which would indicate trouble ahead. Emotions are contagious. The board should be assessing their options and determining how much trust has been lost under this CEO.
Turning to a slightly less public case, Cisco has just announced the resignation of their four-person research and development executive team. This comes just after announcing that the team was being reassigned. The change in plan indicates an internal struggle highlighted by a leaked memo from CEO, Chuck Robbins. In the memo, Robbins says that the resignations are “based on a disconnect regarding roles, responsibilities, and charter that came to light”. The team has played an integral role in Cisco’s development since the 90s and the surprise transition is likely leaving the board and CEO in a state of panic and turmoil.
When a board is surprised, stress and anxiety are introduced into the boardroom.
These are difficult emotions to deal with and they often put the board into a negative interactional cycle. What we really want to focus on is the “disconnect regarding roles… that came to light”. These kinds of disconnections can be avoided when everyone is speaking the same emotional language. The roles of executives should be clearly defined and assessed by the board at regular intervals. There should be conversations about what is expected from the executive and the executive should be able to openly share their opinions and feelings on their professional progress within the company. It looks like Cisco didn’t have a safe environment for the team to share their needs which resulted in four resignations.
Credit Suisse and Cisco are not anomalies, boards and CEOs are facing problems of emotional disconnect every day. Most of their issues are not as thoroughly covered in the press, but they exist right below the surface. The problem is that when you are serving on a board or acting as a CEO, it is difficult to see these problems until it is too late. That is why it is so important to understand the impact of emotions and interactional cycles on your board.
For more information on how to stop the negative interactional patterns and develop an emotionally healthy board, please contact us.