Links:

Book into my autumn programme Time for the things that matter starting 4th October 2022.

'Reclaim Time to Read' 2022 reading challenge:  https://www.helenbeedham.com/2022-reading-challenge

My September blog on 'quiet quitting' 'Feeling 'meh' about work?'

Helen's business book: The Future of Time: how 're-working' time can help you boost productivity, diversity and wellbeing

Randall on Linked In: https://www.linkedin.com/in/drrspeterson/

Randall's website: https://www.randallspeterson.com/

Randall's business book: Disaster in the Boardroom: 6 dysfunctions everyone should understand 

Team of Rivals: The political genius of Abraham Lincoln

Transcript:

Helen: I'm delighted to welcome my first guest for this new series, Randall Peterson. Randall is Professor of Organizational Behaviour and Founding Director of the London Business School Leadership Institute. He teaches executive and MBA classes on leading teams and organizations, board dynamics, high performance teams, leadership assessment, and skill development.

A board member and former chair himself, Randall advises other leaders and boards for organizations around the world, including the Financial Reporting Council, the Governance Institute, the Danish Centre for Leadership and many global businesses. Randall holds a PhD in social psychology from the University of California Berkeley, and was previously on the faculty of Northwestern University and Cornell University's SC Johnson Graduate School of Management. In his research he explores organizational topics such as leading diverse teams, the impact of CEO personality, how trust forms and the effects of conflict. His latest book called 'Disaster in the Boardroom: six dysfunctions everyone should understand' is a rich and fascinating account of the way boards fail and the far-reaching consequences that may follow.

He's also recently published a landmark report on Board Diversity and Effectiveness in FTSE 350 companies, and his work is regularly featured in business and academic journals including the Harvard Business Review, the Sloan Management Review and the Journal of Applied Psychology. Welcome to The Business of Being Brilliant Randall!

Randall: Thank you. It's a pleasure to be here.

Helen: It's really lovely to have you on the podcast. And that was a, a very impressive CV I just shortened and read out, and there's a great level of detail behind all of that. But I guess my first and burning question is how does one come to found a Leadership Institute at a leading business school internationally? Was that something always in your career plan or just something that happened along the way?

Randall: Great question and I really admire these people who had a vision early and they followed it and eventually they get there and that is totally nothing to do with my career pathway. My father told me what my career pathway should be and the main thing I knew is that I didn't wanna do that.

So I needed to figure it out on my own. And I went to university and I loved it and it was a whole new world of ideas, I thought it was great. And I just kept going and then I did a PhD, well, mainly cause I didn't know what else I wanted to do. So I kept going. The thing that always kept me going though is I knew I wanted to do something that mattered, something that made the world a better place. Something of some consequence out there in the world. I didn't wanna just be average, I wanted to be something more than that. And I did the PhD and started doing research and thought, oh, nobody reads this stuff and so maybe my pathway is to become the administrator of a school right? And then very early on in my career, I got the opportunity to be Deputy Dean of London Business School and I thought, great, that's my pathway! And I'm gonna be the president of a university or something like that. And in the end, it wasn't as fulfilling as I wanted it to be and it just didn't feel quite right. So I came back to the faculty and what I discovered is that if you have great ideas that are not only the kind in journals but the kind you can write books about, right? It turns out the impact you can have and the things you can do for the world are pretty important and pretty significant. And I discovered this whole other part or way of being as an academic that in these last five, six years, I've really pushed hard on and I'm having success in these last years that I ... I'm just thrilled with.

So a little bit long winded and a little bit circuitous path here. But it really does fulfill that early desire to do something that matters and something that makes the world a better place.

Helen: I love that. I find it very reassuring to hear that you didn't have a specific plan and if anything, you started off by rebelling against a plan that was proposed to you, which is often the way when we're at that age. But that actually, it was your love of ideas that's been a constant theme and then you've explored that and the connection between exploring ideas and making an impact, I think, is a fantastic one because some people might label ideas as 'well, that's all well and good, but it's daydreaming or it's exploratory stuff', but it can have huge impact. I love the way you've made that link as talking about your career.

Randall: Yeah, thank you. I guess the PhD was like the best part of it because what you're trained in a PhD to do is to say, right, you have a big idea, fine. Show me the evidence. Get out there, do the research and they show you how to do that research. And it was like, actually, I'm tackling really important questions here about why do people go for this kind of a leader versus that kind of leader? Why do they select that leader versus that one? I remember part of what brought me into this, going directly to the book, is I was selected as the student representative to the board of regions of my undergraduate university. And I remember getting in the room all excited to be in the room and maybe have some impact here.

And as people are talking, I'm realizing I have no idea what's happening! Right? And I'm not stupid, it wasn't that I knew it wasn't that, but I still don't know what's going on. So I don't understand, how can I not understand what's happening in the room? So I went and learned about groups and I started doing research on groups and dynamics, and you'll see, there's a stream of research in these latter years like a Harvard Business Review article on side conversations that happen in boardrooms. So we always pretend as though it's a fresh conversation in the room - it totally never is! There's always these other conversations that are happening and that was half of what I didn't understand. Right? And then I started thinking now why do the collective do crazy things sometimes? Things that you would never have done on your own. And that led part of, part of what led to the book, you know, boardroom disaster.

So all those things that were such a formative experience early in career become things that I can then try to talk about and explain later in career.

Helen: That totally makes sense and I share your fascination with human dynamics and how people interact and it must be very powerful being able to look at the big concepts, then research them and then present the evidence, which is really what business executives and leaders will need if they're going to be convinced about why they need to do things differently right? So you go the whole range of the spectrum from big ideas to research, to evidence to interventions. Is that right?

Randall: Absolutely. Got it a hundred percent perfect. And doing research and knowing how to collect real evidence for what you're looking for - good evidence that other people will believe, right, in order to get it published - is such great discipline and so important out there in the world right now where a lot of what goes on is all about opinion and because I have an opinion that makes it so ... No, it doesn't! You do need evidence. You do need to go and research it because I've had a few ideas, quite frankly, that didn't work out. I was wrong about those things, but I can say that now because I tried to find the evidence and it wasn't there.

And there were even a few things I, I kind of stumbled on as a scholar and then realized my God, I'm onto something here. This is really important. So just practical things like in my field, when people who study conflict they study the relationship conflict, negative affect 'I hate you' kind of conflict. And they show how that predicts all kinds of negative outcomes for teams. But what I stumbled onto once accidentally because of the way I was collecting data is actually that negative affect 'I hate you' does not predict forward. It's a reflection of things that have happened badly in the past.

So if a team does poorly, they start blaming each other. But the negative affect upfront isn't what's actually producing this, something else produces it. And then once it's on the table, the team turns in where it's on itself. Like it's really important to know that? And so, you know, that that was an accident, right, but you've gotta have the evidence for it.

Helen: Yeah, absolutely. And in terms of your latest book, Disasters in the Boardroom, which I've read and it's fascinating, incredibly readable. If anyone listening is interested in how corporate disasters happen and corporate failures happen, then it's a fabulous book to read, because you share lots of case studies and you dig into the histories and, and particularly what people did do and what people didn't do. And you offer some great frameworks around that as well. So the idea for that book came out of some of your recent research, including the study into board diversity and effectiveness, or was that kind of in parallel?

Randall: Well, there's a number of things coming together at the same time. So it was partly the FRC work, partly that history I talked about. And then Gerry Brown is involved with the Institute and he came to me and said, I have a whole trunk full of boardroom disasters. This has been going on for 300 years and I wanna work with you Randall, I wanna write a book. We need to tell this story and we need to come up with some solutions to stop all this nonsense. And it was like actually, combine that, you know, happened to walk in the door, somebody who has a private equity background, who has been involved in business on boards for 30 years, with all these data with my interests, and my background and history, it was just the right marriage to make that book happen.

Helen: Yeah, that sounds fantastic. And in the book you describe the six dysfunctions of teams which I won't be able to recall off the top of my head, but am I allowed to confess that I have a favourite dysfunction?

Randall: Sure!

Helen: So, so mine is the one called 'conformist boards' because it's where people fall prey to group think and another term that I hadn't heard of before, but love to bits, called social loafing. Can you explain for listeners what that particular dysfunction is and what social loafing is?

Randall: Sure. So social loafing is the idea that if we are held accountable individually, we feel responsible and we'll go after, but when we're held accountable collectively as a board is, right, it's kind of a collective responsibility? So if it's not what I would want or what I think let's just not talk about it, let's just not deal with it. Because somebody else smarter than me, somebody else with more oomph, somebody else who is a little bit more argumentative, they'll pick it up. And the thing of it is is that everybody around the table is having that same set of thoughts. And so nobody takes action. Or we all just start conforming, to say, well, somebody says, okay, well how about this? And everybody says fine even though inside our heads, we're thinking, is that right? I'm not so sure about that ... But we don't take personal responsibility.

Helen: Yeah. So it's abdication in a group of personal responsibility and being obviously a writer myself and knowing what it's like to try and put a book together and all the work and the editing and the thinking about style and tone and language that goes into it. I really enjoyed reading your book a) because it's highly readable and it's not a dry read at all even though people might think a specialist subject might require that specialist interest in the reader, but I would categorically disagree with that in case of your book. And I loved some of the sayings as well, that go into the book and I've picked out two or three that I particularly enjoyed that you talk about. Well, we know the concept of bad apples but you take that further and talk about bad barrels and bad cellars and I think that whole metaphor's lovely. And that's about the broader board and the broader organization, right, about the culture there?

Randall: Yeah. I mean, you think an organization is so big that one bad apple isn't gonna take it down, but actually in reality one apple, one bad apple can turn the barrel, and that's enough to start to turn the organization if enough of it's out there, that it really starts to affect the organization in a negative way.

 All these disasters do not happen overnight. These are things that build for a long time, number one, and number two, there was always somebody on the board who saw it happening. And for whatever reason, wasn't able to either be heard or be able to put it out there in order to stop this from happening. And I find that the most shocking part of all of this, and when I was doing this work is the answer is in the room and we still can't find it.

 For me, that's mind blow like, wow! So it's all about our ability to get it all out on the table even when it's already in the room, which is all about culture, right? And encouraging people to be able to have that. And psychological safety is all the rage these days, people talking about it, it's real and it's really important to create a culture that allows people to bring these things forward.

Helen: Yeah, absolutely. That's really helpful to hear you explain it because governance might sound like a very technical or intangible subject for some people who maybe aren't so familiar with it. But actually as you say in the book, at its heart, it's about human relationships? Who speaks, who listens, who overrules, who has the side chats. And the board's behaviour, as you describe I think in the book, sets the rules for how other people in the organization behave as well. So it has this huge ripple effect.

Randall: Absolutely. And I guess the campaign that I'm on is look, a lot of what's happened in the name of governance or a lot of the focus on governance has been on what I would call the principal agent problem as the academics would call it, which is that the interests of the organization aren't always lined up with the interests of the management, right? If the management isn't also an owner and I hundred percent agree that that's an issue. But there are so many other issues beyond that. And that's the point is a lot of it boils down to just basic psychology of how people interact and when we put people together collectively to take action, it creates all these problems or all these risks. And so in general, groups outperform individuals; in general, groups are particularly good identifying risk. So a board should be the perfect answer! In practice, boards and groups do have some problems and that's what this book is all about.

I literally went to the research on group dynamics and said, okay, these are the things where groups really screw it up. Do we have any evidence of any of this in all of these cases that we have? And lo and behold, it was like, it's there, it's there, it's there, it's there. And that was that kind of lightbulb moment of, yeah, we definitely have a book!

Helen: Yeah, when you can just see it taking shape and you can see the evidence and the stories and how it all links up. It sounds fascinating. And at the end of the book, you're very pragmatic and quite hopeful about actually we can fix this despite the fact that there have been governance failures, as you say, for actually a few hundred years. And I was surprised to learn that the UK's corporate governance code is a relatively recent thing in that context, I think you said the nineties or so, but but obviously there are still corporate failures happening. Some of the ones you talk about are very recent disasters or misdoings.

 But you sound very hopeful that actually there's a few things that boards can do really, really carefully and thoughtfully and well, and that will help prevent a lot of these things, because it's all about actually monitoring and training and good practice rather than radically needing to overhaul regulatory reform and all of that.

Randall: Yeah, a hundred percent, my co-author Gerry and I are both optimistic about the idea that we can prevent most of the worst disasters. Now that doesn't mean that things won't go wrong in organizations. Of course it will. But. The idea is how can we catch it before it swamps the organization? And that's really the role of the board, if something is really not working right, they should be able to spot it early, should be able to discuss it and to pull back from it in some way or to fix it in some way. And that's all about our ability to be watching carefully and engaging and being able to say 'actually this doesn't quite feel right. I can't quite tell you what's wrong, but something isn't quite right here'. And to be able then to follow that conversation to get to the bottom of that.

Helen: To dig into it, to get some data, to get some views. Yeah, that makes sense. And obviously historically and today, predominantly chairs and board members tend to be more male than female, but does your research show if there's a female chair, are disasters less likely to happen?

Randall: Great question. There are so few female chairs there's not enough data to really say persuasively one way or the other. What we do show though is that the more women you put on the board - and it's important to go beyond one, right? That 'one and done' idea is terrible. You need to have a coalition, more than one woman on the board, ideally more than two even, but most of the FTSE 100 is now 30 about, I think the average is about 35% now. 50/50 would be ideal, so we're not there yet but once you get beyond one, what you start to see is that the dynamic within the board starts to shift. This is what the data show. They have a more collaborative style. So instead of the big confrontation between this guy and this guy, right, it's much more okay, I think this, you think this, how can we find the middle ground here? Turns out to be a more female way of doing things. And that has led to better performance.

Now we need to be careful because there's no guarantee just by diversifying that you're automatically going to get this magic moment of everything to be better. But what it does show is that when you include women, enough of them that it can start to have an impact, that starts to change the way we work together, which is then what makes it work better.

Helen: That makes sense, thank you for explaining that.  Given that how a board operates affects the culture of an organization, and I'm thinking here about where we're at today with the economy and the post pandemic light bulbs that have been flashing for people about their work lives and how they want to live their work life and what matters most to them, and the tight labor market and demand for talent and skills... What are the most effective things that leaders, including boards but also executive teams can do to make employees want to stay? Are there things that they can do that have a real impact?

Randall: Well of course there are some things and research is very clear that different organizations have better and worse, more effective, less effective, more engaging, less engaging cultures, and the cultures that are most successful generally are the ones that allow people the kind of space that we're talking about here. Because it's always a kind of negotiation between the individuals who have interest and a way of being, et cetera, and the needs of the organization and how do we bring them together?

So for example, one of my colleagues here has been doing work looking at just simple things like how we do employee inductions. Our traditional view of this is 'here are the 5,000 things you need to know'. 4,900 of them you will forget by the end of the day because everything is new. So why do we do that? Well, that's the way it's always been done. Rather: why don't we say to people 'here are the 10 things you really, really need to know, and let's talk about how you are going to negotiate who you are with the organization. What do you think you bring? And here's what the needs are: how are we going to make this come together? It turns out it reduces turnover, it improves performance, it ticks most every box. And it's not about just making people feel good. It is about helping people negotiate their identity in an organization. Because if people feel like they fit, the sense of belonging and fit is a thing that keeps people there. I belong in this organization. I fit in this organization. Right? As opposed to, I'm not sure I fit, but I know exactly what I need to do to get a pay rise. That kind of stuff is okay; fit, belonging - that's where the magic happens.

Helen: Yeah, that's fascinating to hear. And I've read around that topic as well and companies are realizing that it's about those key moments they have to create a really rewarding experience. And obviously induction day is, is a really key moment. And it sounds sounds from what you describe that instead of reading out here's the handbook and here's the policies you need to be aware of and leave people feeling a bit stupefied, it's actually about helping them have a meaningful experience on that first day that leaves them feeling actually really enthused about, as you say, being part of this community and feeling like you fit in.

Randall: Yeah, because you know, the other problem with the 5,000 rules is 'here's your straight jacket' is what you're really saying and people don't want a straight jacket. Nobody has ever wanted one. You tolerate it if you don't have many great options but these days there are a lot more options than there used to be for our parents and our grandparents in terms of employment. People will walk to some place where they don't have to wear the straight jacket.

Helen: Absolutely. I could ask so many questions, I've got more questions in my head about how you find writing books and maybe I'll ask, what is the book you haven't written that you would most like to write?

Randall: Great question. I am in the midst of getting started on a book about relationships, the range of relationships. Most people think it's about good relationship, bad relationship or something positive, something negative. The truth is there's a wide range of relationships we can have. How do we think about that? What advice can I give you? That's the book I'm starting now.

Helen: Fantastic. Sounds great, I'll definitely be looking forward to reading that and I'm sure learning from it as well. And a question that I ask most of my guests is: is there a particular resource, whether that's a book or a conversation that you've had or something tangible that other people can access, that's been particularly helpful and influential to you in your career?

Randall: Indeed and in fact, I don't know why I didn't read it sooner, but as somebody who studies groups and somebody who studies conflict, I should have realized that the book 'Team of Rivals' was going to be for me. And as I've read it recently, I'm like, blow me away! And I'm probably with a different lens than a lot of people but what I'm looking at is because the author goes into such detail about the individuals you can feel the conflicts that are going to be entering the room together. And the way Lincoln was able to draw this group together to make the right decisions for the nation is absolutely a masterclass on great leadership. And I loved it..

Helen: Lovely, that's a great recommendation, definitely not one we've had before on the podcast. So I'll pop a link to that in the show notes as well. And for listeners that have been enjoying listening to you talk about your work and your books and things. If they want to get in touch professionally, or follow a bit more of stuff you're working on right now, what's the best way for them to do that?

Randall: Well, I've got a personal website randallspeterson.com with everything I've ever written on it, videos and I put podcasts on too so you can listen to other podcasts I've done and so on. And of course I'm on the main social media so Twitter, LinkedIn, Instagram, so I'm perfectly happy to engage with people. I talk about everything to do with leadership and teams and that kind of thing not just my own work, but other work I think is really good too.

Helen: Wonderful thank you, I'll put some of those links in the show notes, certainly to your website as well. Thank you so much Randall for talking with me today on the podcast it's been so fascinating. I could have happily overrun and carried on talking for a long time, but I really appreciate you joining us. Thank you very much for being a brilliant guest.

Randall: Thank you, it's been a real pleasure to be here. Thanks Helen.