Are You On A Strong- Or Weak-Link Board?
A board member of a Fortune 1000 company recently came to me with his frustration that board decisions were not executed correctly unless he took personal responsibility for follow-through. I listened politely and then gently asked him if he believed that the proper role of board members should be to micromanage execution. He sighed and agreed with me within theory but admitted he couldn’t let go.
This board member sat on what may be described as a strong-link board.
Boards of directors are teams, and all teams can be described as either strong-link or weak-link. Strong-link boards describe a team where the strongest contributor is the most significant. Weak-link boards describe a team where the weakest contributor is most significant. So, is your board best described as strong- or weak-link?
Let’s step back and consider sports teams. Basketball is an example of a strong-link game. The strongest contributor often determines the outcome. There are only a few players on the field. Superstars like LeBron James find it easy to get the ball and control the game. The game is high-scoring, so the occasional mistake can be corrected. The strategy for success for strong-link teams is to invest in making the best player even better.
“BOARDS MUST CONSIDER WHETHER IT IS IN THE BEST INTERESTS OF THE SHAREHOLDERS TO UPGRADE THE STRONGEST CONTRIBUTORS ON THE TEAM OR TO REPLACE OR UPGRADE THE WEAKEST.”
By contrast, soccer is a classic example of a weak-link game. There are a lot of players on the field. The game is low-scoring so even a single mistake can mean the difference between victory or defeat. The weakest player often determines the outcome. Leaders of weak-link teams have learned that upgrading the weakest player predicts more success than upgrading the best player.
Boards come in both flavors. Strong-link boards are not necessarily better than weak-link boards. Both types of boards can be good stewards of an organization and can achieve strategic success. It’s just important to be aware of what kind of board you are dealing with so that investments can be applied strategically.
Strong link teams can achieve spectacular success, but can be fragile. Consider Instagram. Just six superstar developers scaled the start-up to 150 million users in 15 months before selling to Facebook for $1 billion. Instagram is an example of what spectacular success a strong-link team is capable of. But such teams also are fragile. Had even one of the founding engineers left the team, there is a good chance that Instagram’s ascent would have been derailed.
Most mature corporations without charismatic founding CEOs are examples of weak-link teams. The addition or departure of an executive at, say, Microsoft post-Bill Gates will not materially impact the company’s success.
One advantage of a weak-link board is that if a member departs or is added to the board, the board is able to maintain its competency and stewardship. By contrast, in a strong-link board, the departure of a board member often creates temporary dysfunction.
Each board must decide what kind of team it wants to be. Boards must consider whether it is in the best interests of the shareholders to upgrade the strongest contributors on the team or to replace or upgrade the weakest. Clarity is also critical in case a board member needs to take action to replace a problem director. The optimum approach will differ if the problem member is a weak-link or strong-link member.
So, too, boards favoring a strong-link perspective will prioritize programs and investments differently than boards favoring a weak link outlook. Corporate cultures in strong-link organizations differ from the cultures of weak-link organizations. Privileges in strong-link organizations typically are reserved for the select few, the elites, and are designed to identify the best performers and make them even better.
Weak-link cultures are focused on improving the performance of everyone on the team. The goal is to create an organization without weak links. Such cultures feature significant training opportunities. High levels of communications and transparency, and other programs designed to identify the weakest parts of the team and improve it.
Finally, another example of how the difference in approaches plays out can be seen by how two wealthy executives decided on what institutions to support with their charitable contributions.
Phil Knight, the founder of Nike, gave Stanford University what turned out to the largest gift in Stanford’s history. Knight’s gift became part of a $750 million endowment to fund the Knight-Hennessy program, which will admit 100 students each year. The gift goes to improve one of the wealthiest universities in the world and will serve a relatively small number of high-achieving students. It’s a classic example of a gift to strengthen a strong-link program.
Hank Rowan, an American industrialist, applied a weak-link approach to make a similar-sized gift to Glassboro State University, a tiny, financially-struggling institution serving students of modest backgrounds primarily from New Jersey. The gift allowed the college, renamed Rowan University, to create an engineering school that annually serves many hundreds of students of modest means. Rowan’s weak-link approach underscored his belief that his money was better invested to make an average institution significantly greater than in, say, slightly improving his already excellent alma mater, MIT.