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Do & Review, Focus, Manage to Lead, People Matters

Contract & Govern: The Keys to Leadership Success

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A leader’s success hinges on two critical responsibilities:

  • Achieving clarity about what they want from each team member.
  • Effectively communicating their clarity.

Too often, leaders neglect to take the time to define their expectations, leading to confusion and misalignment within the team.

Stephen Covey’s principle of “Begin with the End in Mind” underscores the importance of knowing precisely what you want to achieve before taking action. In leadership, this means clearly articulating the goals and outcomes expected from each team member.

When leaders lack clarity, they cannot expect their team to deliver the desired results. This lack of clarity often stems from the mistaken belief that team members will intuitively understand what is required of them. However, without explicit guidance, team members may interpret goals differently, leading to inconsistency and inefficiency.

Clarity dramatically increases the likelihood of achieving desired outcomes. One might consider this principle in the context of prayer: when we are clear about what we ask for, it likely subliminally enhances our focus and aligns our actions with our intentions, potentially increasing the chances of achieving what we seek, with or without divine intervention. Similarly, in leadership, a leader who is clear and communicates that clarity empowers their team to work toward a shared vision, enhancing collaboration and performance.

Consequently, leaders must prioritize getting clear about their expectations and engaging in rich communication with every member of their team. By doing so, they lay the groundwork for a verbal contract that guides team members toward success, ultimately achieving the leader’s and the organization’s goals..

Contract

Once a leader is clear about what they want from a team member, they should initiate one-on-one conversations to communicate precisely what the team relies on them to achieve. During these discussions, the leader must ensure:

  • The assignment is clear and unambiguous.
  • They believe the person can accomplish the task.
  • They want the person to take on the task.

After explaining, the leader asks the team member to repeat back what they heard to confirm understanding.  Repeat this process until both parties are aligned. The leader must also verify that the team member genuinely wants to complete the task and believes in their ability to do so.

This mutual understanding forms a verbal contract, establishing the team member’s commitment to the task, which is then documented in their performance goals.

Two additional factors ensure success:

  • Resources: The leader provides necessary resources such as time, training, personnel, funding, accountability reviews, and advisors to support the team member.
  • Incentives: The leader motivates the team member by offering rewards like praise, performance bonuses, promotions, or celebratory events (e.g., dinner with the boss or a trip) upon successful completion.

The following graphic presents a way to visualize the steps outlined:

Supervisor-Team Member Contracting

Govern

The primary reason things go wrong is lack of management attention. A wise leader regularly checks in to ensure that front-line actions align with expectations. Make it clear that you are on your team member’s side and that your sole interest is their success. Offer tangible support to demonstrate your commitment, such as sharing your best thinking in the form of notes or drawings or providing key insights and ideas. Encourage your direct report to internalize your input and develop it further as if it were their own.

Effective governance involves regular, structured check-ins between leaders and their direct reports. Leaders should schedule consistent one-on-one meetings with each team member, ideally lasting around 90 minutes and occurring weekly or bi-weekly. Choose a time that is easy to keep, such as 7:30 a.m. every other Monday, and make it a priority to hold these meetings consistently. Reschedule only if necessary and commit to making up any missed sessions. While meetings may occasionally take less time than scheduled, any time saved is valuable.

These meetings should be focused and free from distractions or competing agendas. Avoid combining them with meals, though informal lunches together are beneficial for relationship-building.

During the Meeting:

Team Member’s Presentation:

  • Review Priorities and Progress: The team member presents their priorities and progress from the previous period, supported by metrics. The leader’s role is to ask questions like, “How is it going?” and “How do you know?”
  • Discuss Top Priorities: The team member outlines their top three to five priorities. Engage in a detailed discussion about these items, emphasizing what is happening and how it is progressing. The leader should actively demonstrate support and teamwork, offering resources, training, introductions, and other assistance as needed.
  • Agree on Next Steps: Collaboratively decide on the top items, next steps, and specific actions to be taken. The leader should also determine how they can assist in achieving these goals.

Leader’s Presentation:

  • Share Leader’s Priorities: In about 15 minutes, the leader shares their top three to five priorities. This transparency keeps the team member informed and involved in the bigger picture, helping them understand what the leader is doing for the team’s benefit.
  • Discuss and Solicit Input: Discuss the points raised until there is mutual clarity. Invite input and advice from the team member, valuing their perspective and insights.
  • Commit to Follow-Up: The leader commits to keeping the team member informed about any developments related to their discussion and what the leader is doing that may affect them.

By setting aside regular time for these focused conversations, leaders can maintain alignment, foster collaboration, and ensure everyone is working toward shared goals. This structured approach reinforces a sense of team unity and enhances overall performance.

The following graphic is a way to visualize the steps outlined above:

One-on-One Meetings between Manager and Team Member are key to governing for success.

Summary

Failing to both contract and govern effectively is a recipe for calamity. Without clear agreements and regular oversight, teams are likely to encounter misalignment, confusion, and inefficiency. Contracting ensures that expectations are explicit and mutually understood, establishing a strong foundation for success. Governing maintains focus and momentum by providing the guidance and support necessary to navigate challenges. Together, these practices empower leaders to create a cohesive and high-performing team. By prioritizing both contracting and governing, leaders can avoid pitfalls, foster collaboration, and drive their organization toward achieving its goals. Neglecting these essential practices leaves teams vulnerable to chaos and missed opportunities.

Note

Do & Review, Executive Reviews, Operations, Presentations

Maximizing the Value of Review Meetings

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Periodic reviews are critical for keeping important initiatives, functions, and projects on track in an organization. However, maximizing the value from these review meetings takes thoughtful effort from both the reviewers and those presenting their work (the reviewees).

Too often, one or both do not put in the necessary preparation, resulting in an unproductive meeting. By understanding and executing on the key responsibilities for each role, reviews can be transformed into productive learning experiences.

Responsibilities of the Reviewer

  • As the reviewer, you have the vital role to create an environment conducive to an open and honest discussion. This starts well before the meeting with your careful review of pre-read materials sent ahead of time. Use this to develop informed questions and hypotheses to pressure test during the meeting itself.
  • A best practice is to share your initial questions and perspective with the reviewee in advance. This allows them to understand where you are coming from, hone their thinking, and essentially start the review meeting before it officially begins. Provide this helpful framing upfront for a much more productive dialogue in the review.
  • Once in the meeting, resist the urge to jump straight to your pre-conceived notions. Instead, actively listen to the reviewee’s presentation with an open mind. Ask clarifying questions to ensure you fully understand the current state and ask well formulated questions to push up thinking, before offering opinions or advice. The best reviewers make the reviewee feel heard and can see the situation through their eyes.
  • With this common understanding established, then it’s time for the hard questions. Don’t hold back – apply pressure to the reviewee’s thinking by challenging assumptions, identifying gaps or inconsistencies, and pushing them to consider alternative perspectives. However, do this in a constructive way, separating the person from the points.
  • Finally, provide clear guidance on the path forward, explaining your thought process. But also be open to any final thoughts from the reviewee before conclusively setting expectations. The review should be a two-way dialogue (which is, literally, a quest for truth!).

Responsibilities of the Reviewee

  • Presenting during a high-stakes review meeting is highly stressful. However, reviewees must resist the urge to treat it as a one-way presentation. Effective reviewees embrace the meeting as a collaborative problem-solving session by being vulnerable and open to feedback.
  • The preparation should focus not just on materials summarizing the current state, but also anticipating the tough questions reviewers are likely to ask. Be ready to back up your assumptions, analysis, and recommendations with data and reasoning. However, avoid being overly attached to your original ideas – maintain an open mindset to altogether change course based on the discussion.
  • During the meeting, reviewees should temporarily park their leadership responsibilities. Resist giving into the urge to justify everything. Instead, actively listen (i.e., repeat back to the speaker what you heard) to be sure you understand reviewers’ perspectives, concerns and recommendations with a beginner’s mindset, as if hearing it for the first time. Ask clarifying questions, take detailed notes, and extend the discussion with a genuine desire to learn.
  • With reviewers’ guidance absorbed, the hard work is still ahead. Reviewees must internalize and quickly implement the suggestions, updating their plans or re-doing analysis as needed. Note: a poor previous approach is no excuse for reverting – reviewing your team’s work in a new light is a vital skill.

Summary

High quality reviews are hard work for both parties. Reviewers must create a psychologically safe environment, genuinely understand the current state before reacting, and then push reviewees’ thinking while providing clear guidance.

Reviewees in turn must be vulnerable, keeping an open mind to altogether pivot based on the discussion and immediately implement the feedback through more work. Shirking these responsibilities leads to disastrous review meetings that simply check a box. Whereas, embracing the mindsets and following the suggestions above turns reviews into powerful tools for accelerating success.

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Do & Review, Finance Matters, Get Help, People Matters

Balancing Act: Navigating the Complex Interplay Between a Portfolio CEO and Private Equity Managing Directors

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This post is based on remarks IntelliVen CEO, Peter DiGiammarino made about what Private Equity Operations partners do for portfolio CEOs at a National Private Equity International Operating Partners Forum Panel Discussion in Sentry Center, New York City.

Panel Topic

A view from the portfolio company CEO on:

  • Management autonomy and sponsor inclusion; striking the right balance.
  • Engaging with the General Partner over the life of the transaction.

Opening Remarks

Beyond getting deals done and setting up financing, there are three things an operations professional counts on from their private equity investor:

  • Governance– i.e., provide a consistent point of accountability to report on: what we said we would do, what we did, what happened, what we learned, and what we plan to do next; we count on you to ask good questions to push up our thinking and give us your best advice.
  • Access– i.e., help secure the money, people, partners, clients, best practices, knowledge, etc. needed to be successful.

A team is a group of people working together to achieve a common goal.  If everyone sinks or swims together the investor team and the operating team aggregate to form the deal team.

The CEO’s job is to get the most out of all available resources to achieve the best possible result in the shortest possible time. Those on the investor team are there for the CEO to draw-in and leverage as best they can, just like any other resource. Why then does it often seem that the investor team and the operating team are competing rather than working together?

Consider a real example:  After five years with a successful exit for a top Private Equity firm, I stayed on as Chairman leaving my protegee in the role of first-time CEO with new investors. The organization’s single largest client-program was unexpectedly and abruptly lost in the first week, then the macro environment changed dramatically, and the new sales pipeline stalled.

The business fell way off plan:

  • The private equity investors were rocked and so prepared and asked the best questions they could come up with to push up the team’s thinking and spark insights.
  • The management team was shaken and felt on the verge of losing owner confidence, their jobs, and the opportunityof a lifetime. They listened carefully to every question, answered what they could in the moment, and diligently followed-up afterwards almost as if coming up with the right answers would prove that things were about to get back on track.

Things did not get back on track. Instead there was  escalating uncertainty, concern, and trepidation.

The investment team did not want, or even think that they knew how, to run the business, but the management team was lured into thinking that the investors thought they did know how to manage the business! Consequently, well-intended questions from the owners:

  • Were out-of-step with what the CEO thought was right to do.
  • Left the CEO off-balance and wasting time trying to please.

Board interactions became ordeals to manage rather than fertile ground for good ideas that stimulate effective action. The operating team expended energy resisting what they thought their investor thought was right to do rather than on what the team thought was right to do.

What investors need, want, and deserve when things get off track is the new plan and for the business to perform on or ahead of that plan.  I met with the investor team and separately with the CEO to remind them all that a CEO either:

  • Has a plan and so knows what to do and is doing it.

or

  • Does not have a planand is (or, should be) driving hard to put one together.

At the same time, the board is either:

  • Supporting the CEO.

or

  • Changing the CEO.

Trouble comes when the CEO thinks they have a plan, but has not communicated it well and when investors think they are being supportive, but their actions say otherwise.

When the CEO says “the world has changed”, investors should ask for the new plan and make it safe for the CEO to say:  “The plan needs to be pulled together“.  Urge the CEO to work with their team, investors, and advisers to come up with a plan everyone believes in … and do it soon!  Agree on a date and when it comes, review the plan as you would any investment.

  • If you are comfortable with the plan and with the CEO’s ability to execute against it, say: “OK, proceed as described!” and then support and help the CEO in every way you can.

or

  • If the plan is not good or you lack confidence in its execution then say: “Not OK” and proceed to move him/her out.

To finish the story, the investors gave their new CEO time to work with his team to develop and present a coherent plan that they support and the business is back and performing well.

The lesson is that while investors are part of the deal team, they are not part of the management operating team.  The best investors know, appreciate, and respect that operating competence is a high-order and rare skill and that investors do not have that skill.  They may be operating-oriented deal guys, but they are still deal guys.  Their job is to find, hire, put in place, develop, and support an operating team.

Some operating teams are not experienced enough to know that investors are not operators and many, if not most, investors find it hard to resist dabbling in operations.  When neither speaks well the language of the other, things can get bogged down or confused.  There is a role on the operating team and/or on the investor team for someone who speaks both languages.

That is, the operating-oriented deal guy (i.e., attendees of this conference) and/or the deal-oriented operating guy (such as myself) can improve the odds of success by helping owners and operators to better understand each other and work better together to improve the odds of better results, sooner.

Related posts

Do & Review, Executive Reviews, Governance

Optimizing Your Board of Directors: A Guide for Fast-Growing Private Companies

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Growing private companies often encounter challenges in establishing an effective board of directors. Typically, boards comprise well-meaning individuals who meet periodically, usually for a few hours up to a couple of days. However, these meetings frequently become sessions to celebrate company successes rather than critically examining company performance against its board-approved plans and strategic initiatives for the year.

For these companies, it’s vital to have a diverse board, including external directors who offer unbiased insights and prevent family / founder / owner dominance. Establishing clear governance policies and procedures is essential, as they define the roles and responsibilities of each board member. Moreover, regular board meetings focused on progress towards strategic goals, rather than on operating details, are crucial.

This post outlines best practices for efficient private company board meetings, ensuring that your time together is well-spent. We also provide a template for an effective board meeting agenda.

The Board Agenda – Your Roadmap to Efficiency

Preparation is Key

  • The board chair should distribute a draft agenda 4-5 days before the meeting, soliciting upgrades and additional topics.
  • Agendas must be clear, concise, and focused on performance metrics, strategic goals, and pressing issues.

Best Practices for Productive Meetings

  • Limit meetings to three hours to maintain focus and energy.
  • Introduce new items for information only, with decisions deferred to subsequent meetings after thoughtful review.
  • Distribute materials a day or two in advance, allowing members to come prepared.
  • Allocate time for informal interaction before and after the meeting to foster trust and collaboration.
  • Record and distribute key action items, decisions, and insights promptly after the meeting.

Agenda Template

  • 10-min: Administrative matters (e.g., by-law updates, approve minutes from prior meeting, etc.)
  • 15-min: CEO’s overview of the business state
  • 20-min: Financial performance review of actual results vs. plan and projections
  • 20–40-min/ea: Updates and discussion of strategic initiatives (up to three) and / or committee (e.g., compensation committee, governance committee, audit committee) reports
  • 10-20-min: New or walk-on items
  • 5-20-min: Future meeting topics
  • 5-min: Adjournment and reminders of meeting Action Items, Decisions, and Insights

This template is flexible and can be adjusted to fit the unique needs of your board.

Conclusion

Setting up and managing an efficient board for fast-growing private companies is both challenging and rewarding. By adopting these best practices and using a structured agenda, boards can offer valuable guidance and oversight, enhancing their collaboration with the management team.

See Also

Click the figure above for a summary of Accountability Board Support Characteristics

 About The Author

David Halwig, IntelliVen Co-Founder and President of Mid-Atlantic Region, provides strategic management consulting and advisory services to leaders whose organizations are at critical inflection points. David helps improve governance, leader development, strategic planning, and risk management. He also has substantial experience with merger and acquisition strategies, valuation, and transition approaches.  

Connect with David on LinkedIn

Do & Review, Manage to Lead

How to Run Operating Meetings

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A CEO Manage to Lead participant put it this way:

“It’s easy to make great progress when you aren’t doing much in the first place,”

when commenting on the lift in performance experienced after tweaking the approach to running his organization’s weekly Operating Meeting.

The motivation was to stop wasting countless hours discussing philosophical and theoretical matters that had little-to-nothing to do with operations and that kept them from getting important work done in their operating meeting up to that point.

The point of his Haiku-like phrase is that it is not hard to run an organization better…but you do have to work at it.

Every meeting needs to be thought through to get clear why it is being held, what it is to produce, how it will be accomplished, and what outcomes are to be generated (see: How to Run a Great Meeting).

A good approach for Operating Meetings is for the organization’s leader (e.g., CEO, unit leader, initiative leader, project manager, etc.) to have each functional leader (e.g., head of engineering, head of marketing, etc.) present in literally just a few minutes: