H. Pierson

The Institute of Directors defines the role of the board as being “to ensure the company’s prosperity by collectively directing the company’s affairs, while meeting the appropriate interests of its shareholders and relevant stakeholders.” With such responsibility, it is essential that the board works to its full potential. This certainly includes knowing how to improve board effectiveness.

Worryingly, PwC found that only 10% of C-suite executives rated their boards as ‘excellent’ in terms of their effectiveness. The majority – 55% – said that their board’s performance was merely ‘fair’.

This article describes the steps required to improve board effectiveness and provides a checklist to help you assess how effective your board is.

What is board effectiveness?

Board effectiveness relates to the performance of the directors individually and collectively relating to their roles and responsibilities.

Once, stakeholders might only have been concerned with the profitability of the business, and that would have been the most important measure of board effectiveness. However, non-financial metrics are now similarly important, especially given the rise of investing decisions surrounding environmental, social and corporate governance (ESG) matters.

You can measure the effectiveness of a corporate board by monitoring its performance against those factors that matter most to the business and stakeholders.

7 steps to improve board effectiveness

Your board performing to the best of its ability is essential to the success of your organisation. These steps will help you increase the effectiveness of the board and help them lead the business towards its goals.

1. Clearly define roles and responsibilities

Your succession policy should allow you to select and prepare candidates who can fill the skill gaps on the board and ensure that the whole delivers more value than the sum of its parts. To facilitate this, create job descriptions for each board member, where you explicitly state what you expect of the director from their work with the board.

Following robust recruiting and succession processes, each director will have their own particular strengths and skills that they bring to the boardroom. This should be reflected in their clear, defined role on the board.

In addition to their duties, every member of the board must understand their key performance indicators (KPIs) and how they tally up with helping the business work toward its strategic goals and mission. For this reason, they should gain focus on what they need to achieve from their board work to contribute effectively to the governance of the organisation.

Directors can face legal sanctions for failing in their duties to the business and its customers. So, make certain that all board members understand the lines of accountability within the board environment. Having this framework in mind helps to make your workflows run more smoothly.

2. Examine board structure

Getting the structure of the board correct is a difficult balancing act, but it is essential for board effectiveness. There is no ideal board size that suits every company because it depends on your specific circumstances.

Think about the roles that you have defined. If there is too much overlap, your board might be too big. If you still have gaps or you require directors to work outside of their core skillset, you might need to recruit more board members.

You should also assess the committees that you have in place. Are they all serving a purpose and working efficiently and effectively?

Once again, look for overlaps and gaps. Just because you have always had certain committees, it doesn’t mean you should keep them if they are serving no purpose in driving the business toward its targets.

3. Revise formal operating procedures

Another example of improving effectiveness by not being afraid to challenge traditions comes in the formal operating procedures of your board. You may well have run your meetings in a certain way for decades, but if it is not the most effective way possible, you should make a change.

Some of the procedures you can improve include:

4. Keep track of decisions and actions

There should be a frictionless procedure that translates decisions made into actions carried out afterwards. Sometimes this is not the case, and there is a disjointed approach.

Ensure that the chair communicates the action points that arise from decisions on key issues and that the directors responsible for those actions understand their obligations.

One way to achieve this is to track decisions and actions within your board portal. This acts as a clear guide to all board members, outlining the steps they need to take and by when they need to take them. It ensures everyone knows their responsibilities and can be held accountable for completing their tasks within the deadline. This means that the board takes effective action to bring its decisions to life and carry out its duties.

5. Evaluate board composition

There are a number of different considerations to make with regard to board composition. You need a balance of skills, experience, outlooks and attitudes. In addition, gaining better board diversity in terms of gender, race and other considerations helps you to avoid groupthink that fails to fulfil the potential of the business.

The better the balance, the more your board members can challenge each other knowledgeably. They can offer innovative solutions, making for a better-informed debate and stronger decision-making.

Use board evaluations to identify gaps in the board of directors and look to fill them with the help of your succession planning process.

6. Understand board culture

The culture of the board has a bearing on its effectiveness. Are the meetings too formal or too informal? This is an element of board culture that could determine how effective those meetings are.

In addition, a culture of development shows a board is willing to commit to change and adapt to new ways of working if they will benefit the organisation. If this is not the prevalent culture, it will rarely be able to be as effective as possible.

During a meeting, the chair has a key role in setting the board culture. If they allow the big characters in the room to dominate, it will skew the debates that happen within the board. By bringing in quieter board members and balancing the discussion, board chairs can shift the culture and gain the benefit of additional viewpoints.

7. Engage board members

The chair or CEO can improve the effectiveness of the board by making efforts to engage board members. This could include reaching out between meetings to develop personal connections, organising informal meet-ups to encourage team building, making time to celebrate wins and other such exercises.

These activities develop a connection between the board members, encouraging them to give more of themselves to their work on the board and increasing the effectiveness of the board at the same time.

Checklist to assess board effectiveness

Useful questions to ask consider when assessing board effectiveness include:

Does the board have an appropriate environment and a diverse mix of skills, experience and independence?
Does the organisational design support and/or enable strategic decision-making?
Do board members understand their roles and responsibilities?
Are individual directors formally evaluated in terms of their performance?
Does the chair create an open and inclusive environment at meetings where all are encouraged to contribute?
Is the chair’s performance appraised by their directors?
Are management boards clear on their roles and responsibilities?
Does the board have clear and timely access to information to assess both the performance of the business and its management of strategic risks?
Are board papers distributed in a timely manner?
Do directors engage with the reports, agendas and other documents they receive?
What percentage of actions are completed on time?
Does the board provide a plan for its succession?
Are diversity and training considered in succession planning?

FAQs

How do you structure board meetings?

Board meetings should have a clear agenda to allow directors the opportunity to prepare thoroughly for the meeting. This will include the approval of the minutes, reports from officers and committees, special orders, unfinished business from previous meetings, new business and announcements.

What is considered effective governance?

A board shows effectiveness by creating and developing policies it believes are in the best interests of the company and its key stakeholders. Effective governance helps the board reach its strategic goals and face future challenges with confidence.

What is the biggest challenge to board effectiveness?

A disengaged board can be detrimental to the effectiveness of its work. Board members need to give their full attention to their role, including preparing for and following up after meetings. Without full commitment, board performance is affected, meetings are not as productive as they could be, and the board could fail to execute its decisions.

Conclusion

When you look at how to improve board effectiveness, engagement is one of the key drivers. When board members feel engaged with their work and they know their roles and expectations clearly, they can dedicate their time most efficiently. Communication helps achieve that, and a board portal is an effective way to facilitate it.

Source: ibabs.com

Organizations of all types from small nonprofits to mega corporations are governed by a board of directors that appoints the agency head. Serving on a board of directors requires strong leadership, commitment to the mission of the organization and impeccable credentials.

Board of director responsibilities may include fiscal oversight, fundraising, strategic planning and personnel actions. Those who meet board member qualifications may find the experience challenging, but deeply rewarding.

Board of Directors Responsibilities

Individuals appointed to a board of directors meet regularly to review budgets, operations, strategic plans and personnel matters. Advice and guidance is given to the organization’s management team. Board members may take the lead in fundraising activities for nonprofit organizations and may have been selected for their ties to community resources.

Many board members are chosen at the late stage of their careers and bring decades of experience and business acumen, according to Forbes. Others are younger and ambitious with forward thinking ideas that can grow the organization. Honesty, integrity, independent decision-making and objectivity are personal qualities that Forbes considers necessary for board members to possess in order to properly fulfill their responsibilities.

Serving on a board of directors is a major commitment that should not be undertaken lightly. In fact, bank board director Charles J. Thayer writing in Directors & Boards suggests that the potential risks of serving on a community bank board of directors can outweigh the rewards. Bank board of directors qualifications include understanding of banking laws because directors are expected to know and follow 800 rules of the American Association of Bank Directors to avoid the perception or reality of financial mismanagement.

Board Member Qualifications and Disqualifications

Board member qualifications include basic eligibility criteria that must be met for further consideration. Those who do not meet basic requirements are eliminated early in the selection process. Directors must be carefully vetted to ensure they have the ethics and integrity to serve in this capacity. Qualifications for serving on the board are typically outlined in the organization’s bylaws and vary from one organization to the next.

For example, FindHOALaw, a resource for homeowner associations (HOAs), suggests that an HOA board member should minimally be a member in good standing who is committed to regularly attending board meetings. Disqualifiers would include anyone with a felony conviction, or applicants or nominees who have a conflict of interest that affects eligibility, such as being related to a sitting board member. Being embroiled in a lawsuit against the HOA would also be grounds for disqualification.

Typical Board Member Qualifications

Required qualifications align with the type of board member skills needed to effectively lead the organization. Qualifications for a seat on a corporate board look different from those required to serve on a local animal rescue nonprofit organization, for example, but universally shared qualities include a commitment to duty of care and loyalty to the mission, vision and purpose of the organization.

Large companies often require in-depth knowledge of the industry to make competent decisions as a board member. For example, Colgate-Palmolive requires its directors to have held a position as CEO of a large corporation or comparable leadership, experience in information technology, or regulatory and public service. Possessing a master’s degree or a doctorate is also considered helpful.

Commitment to Diversity

Board member qualifications typically include commitment to diversity. Members of a board of directors from diverse backgrounds offer unique perspectives and ideas for reaching underserved populations and untapped markets. According to the National Association of Corporate Directors, commitment to diversity and inclusion is essential to innovation and an organization’s long-term viability and expansion.

The Council of Nonprofits suggests that charitable and philanthropic organizations should be doing more to increase diversity on the boards. Instead of limiting qualifications to CEOs who may be predominantly white males, board membership could be open to millennials, for example. Asking for nominations from communities served by the organization may also result in a more diverse pool of qualified director applicants.

From pandemic recovery to economic, political and social changes and activist investors, boards of directors are widening their duties and problem-solving as they address how to navigate obstacles and opportunities for the future. Staying aware of these trends is crucial. Here are four key areas boards need to consider this year.

Surges in Activism

2022 had the highest record for activism activity in history. Activists investors’ agenda was to take advantage of low stock prices and stressed financial forecasts of struggling companies. Their focus was on company strategy and operational performance, when in past years the focus was more on M&A and capital allocations. This noted, the jump in activity produced higher success for activists. 2022 showed a 200% increase in adoption of shareholder rights plan from 2021. Preparing and defending against activism has boards busy with updating their bylaws with amendments regarding voting and decision-making abilities.

Expanded Focus on Risk Management

Areas for coverage in risk management are broadening. To address this, some boards are separating Audit and Risk Committees into separate committees. Others are revising their committee charters to include the new duties and systems to monitor critical functions, safety issues, oversight of the strategies and policies and practices adopted to address risks. These new areas include cybersecurity, cryptocurrency, ESG, climate, new laws permitting officer exculpation from personal liability for monetary damages expands the committee work. This requires new areas expertise on boards, and the SEC has proposed new rules regarding cyber expertise on boards.

Continued Focus on Board Diversity

Investor expectations for board diversity includes firm investor voting policies and proxy advisory guidelines. The influence from such groups as Blackrock, Vanguard, Fidelity International and ISS has impacted practices. For example, ISS recommends against the Nom and Gov committee and other directors at a company that has no women on the board. The disclosure rules regarding diversity are underway. Nasdaq-listed companies must provide annual public disclosures of diversity statistics with a board diversity matrix to comply or disclose their explanation as to why they do not meet the objectives.

The Relationship Between the Board and Management

With the expansion of responsibilities, the board and executive leadership are dealing with new pressures. Directors must get more involved in understanding of company operations, challenges and fiduciary expectations. Directors and executives are now encouraged to come together to define their respective roles and responsibilities and authority to ensure the check and balance between governance and management and to uphold a healthy collaborative partnership. Based on our research in 34 countries, the most highly correlated factor for a high performing board is the functionality of the group dynamics.

Written by Theresa Sintetos

Whether they have years of board experience or whether it’s their first board director position, all board members benefit from governance training. Board directors have many important responsibilities. Their work is never done.

Organizations that train and educate their board directors make an important investment in their leadership and that has a direct bearing on the organization. Continual training in governance makes average and good boards great.

The right tools assist boards in bringing their knowledge and expertise into the boardroom.

Why Board Members Need Governance Training

Current and new board directors all bring valuable skills to the organization they lead. Both groups have much to learn from each other. No matter how long someone has been serving on the same or different boards, there are always new things to learn, new challenges to address, and new problems to solve.

Serving on a board is not all work, though. Board directors work very closely together. They share a special sense of friendship and camaraderie. Advanced training brings all board directors current on governance issues which keeps them all on the same page. Governance education promotes candor and straight-talking on tough issues without causing harmful discord on the board.

Boards have much to accomplish in the space of a board meeting. As a result, they have precious little time to get to know each other during board meetings. External activities, such as spending time at governance seminars, workshops, and conventions provide valuable opportunities for boards to connect and form stronger relationships outside the board. The connections they form will help them to think and act as one when they’re faced with challenging times.

Sitting Board Directors Play a Role in Mentoring the Incoming Board

Long-term, seasoned board directors have much to contribute to the rest of the board. Experienced board directors have learned much about governance from past boards where they’ve served, as well as their experience on the current board.

Veteran board members offer much value in mentoring newer board members and helping with succession planning. Every time there is changeover on a board, it becomes a new board that’s different from the old one. New boards will soon form their own dynamics. Building bonds and earning trust takes time and it’s important for boards to put in the time to make it happen.

Newer Board Directors Have Room to Grow in Governance

Newer board members may lack governance experience, but if they were recruited well, they’ll bring other valuable skills to the board. When new board members combine their existing knowledge with the basics of good governance, they have much to contribute to the board.

Inexperienced board directors are often motivated to join a board because it gives them experience and enhances their resume. Once they join a board, it quickly becomes apparent how much work it is, and how little they know about governance. By putting in the time to learn more about governance, less experienced board directors can participate more robustly and intelligently in board discussions and become better contributors to the board.

Board dynamics are an important part of a board’s work. Existing board directors are bound to notice newer board directors that put the time and effort in to learn more about governance. That’s a good first step toward gaining the respect and admiration of the other board directors. Getting governance education demonstrates that new board directors value the organization that invested in them. That goes very far with the rest of the board.

Good Governance Benefits Your Community

Your organization plays a vital role within your community and it deserves the best of skills, perspective, and leadership that the board has to offer. A responsible board quickly gains the respect of the business leaders and people living in the community. Continued governance training shows that the board values governance education and takes their duties seriously. That’s important because those are the people that will become volunteers and donors to help sustain your organization.

Moreover, as boards grow and learn together, it’s easier for them to put personal and political agendas aside and put the needs of the organization first.

Responsible Boards Are Current on Governance Issues

All board directors should be familiar with the term fiduciary duties. When a board director accepts a seat on a board, they automatically accept the duty of care, duty of obedience, and duty of loyalty. These duties are important because board directors also accept legal liability for the decisions they make. If a board decision is ever in question, courts will apply fiduciary duties as the standard against the board’s decisions and actions. Knowledge about governance issues helps boards to make informed, wise decisions collectively, and it demonstrates they acted on an informed basis.

Something board directors should always be cognizant of is that a crisis can happen within an organization at any time, even if things have gone smoothly for decades. A board that knows governance issues well is better equipped to handle anything that comes their way, no matter how difficult it is.

The business environment is continually changing. Regulations and compliance issues are evolving. Continuing education in governance ensures that boards know what their legal responsibilities are and have the knowledge base to fulfill them.

Something many boards fail to recognize is that their responsibilities are important not only for the current time but also for the future. Effective boards are forward-thinking. The idea of “future-proofing” the organization should be evident in strategic planning and fundraising efforts. It’s a good strategy to map the board’s current skills against the skills the board will need over the next three-to-five years. Gaps in needed skills are instrumental in helping with board recruitment efforts.

Overall, there are hundreds of good reasons for boards to invest in governance training and there are no good reasons for not doing it.

BoardEffect board software is a valuable tool to help boards get organized and document their efforts as they pursue board development.

Boards are expected to conduct annual self-evaluations which are essential for developing a strong board. BoardEffect software makes the process of self-evaluations easy and efficient. The portal offers many other governance tools and features to help boards stay at the top of their game.

Open Banking refers to banks and other financial institutions opening up data for regulated providers to access, use, and share. Ensuring security for a data-sharing project such as open banking is paramount, and banks are effectively putting in place the infrastructure for their customers’ data to be shared more securely with third parties, with customer permission. That data sharing takes place only with customer authorization is important. Open banking wasn’t designed to allow banks to sell their customers’ data more easily.

The intention is quite the opposite — open banking was conceived to improve financial services for customers by opening up access to data that has historically been kept in-house; new companies and new products can enter the market and use this data in helpful, innovative ways.

So what does it all mean?

For financial service providers — At the top of the chain, open banking will allow financial service providers to significantly innovate their product offerings to businesses.
For businesses (large and small) — Those innovations made by financial service providers will mean more effective and efficient financial tools in your business — notably payments. This will mean more automation, freeing up more time, doing away with the headaches of manual tasks, and ultimately saving you money.
For customers — Open banking will mean better ways to spend, borrow, and invest.

Why is it important/relevant?

The promotion of Open Banking holds the promise of bringing about innovation in the banking industry. Fintechs typically take up positions that traditional banks cannot fill. Ensuring a good open banking system will mean greater efficiencies leading to better services and, ultimately, better customer experiences. The banks and the fintech create a network of data sharing, which could be used to create more robust customer profiles, and information, understand spending habits, and aid in better risk modeling, which in turn will help reduce risk, particularly for institutions providing credit facilities.

In addition, open banking will necessitate new technology to bolster existing banking systems and will, in turn, provide efficiencies and profits that will exceed the investment required for these technologies. It’s a WIN-WIN situation.

What Was the situation PRIOR to the regulation?

Open banking, particularly in Nigeria, has been largely unregulated. Fintechs have low regulatory barriers to entry and face hardly any oversight compared to traditional banks (no banking licenses required). As such, the fintech industry in Nigeria has been expanding at a significantly high rate over the past five years. Numerous apps are available for consumers; some have become household names: Quickteller, Paga, Carbon, Piggyvest, etc.

However, as with any industry that sees such rapid expansion, the risks posed and faced by this industry become more apparent. When it comes to Open Banking, two prominent issues need to be addressed.

The first issue is privacy. This refers to the privacy of customers’ banking information that the banks share with third-party financial service providers. By regulations, banks are not allowed to share customers’ banking information without their consent. As such, customers making use of third-party financial services providers are required to agree to the providers’ “Terms of Service,” in which the customer will agree to the provider being granted access to certain information about the customer from the banks. Once the customer agrees to these terms, the banks can then grant the provider access to the information through the API. This part is all fine and well and is standard practice. However, once the provider gains that information, no strong regulatory framework dictates what they can and can’t do with that information.

The second issue is regarding Security: The security of the customers’ information and the security of the banking systems. Due to the lack of a strong regulatory framework for the providers and Fintechs, the requirements for the protection and security of customers’ information is vague at best. While this could be considered an existential threat to the providers, which they would have to address prior to commencing business, there are no guarantees of security, monitoring, or oversight.

Also, with regards to security, the providers and APIs being employed create extra points of vulnerability to the banking system. Of course, customers’ information is at risk, but the customer account information and access to the accounts could also be compromised. In Nigeria, the recently alleged hacking for Flutterwave is a good case in point. It is alleged that hackers got into Flutterwaves systems and were able to move NGN 2.9bn to a number of different accounts. Flutterwave is a payment system provider, not a money deposit bank, so where did the NGN 2.9bn come from? From Flutterwave’s customers’ bank accounts. It is important to note that Flutterwave has publicly denied this alleged hacking, but this highlights what is potentially at risk here.

Why is CBN putting out guidance for it?

The CBN initially put out a circular for the regulatory framework for Open Banking in Nigeria in February 2021. This framework covered some critical issues regarding Data and Service Access Governance, Guiding Principles for API specifications, Risk Management guidelines, Customer Rights, Responsibility, and Redress mechanism.

In furtherance of the released framework, the CBN in March 2023 approved the operational guidelines for Open Banking in Nigeria. While the regulatory framework addressed the overarching issues regarding open banking in Nigeria, the operational guidelines seek to tackle the more granular operational issues faced by third-party financial providers.

In conjunction with the regulatory framework, the operational guidelines should alleviate the risk and security concerns surrounding opening banking in Nigeria.

What does the guidance mean for Nigerian markets?

These guidelines mean that financial institutions and fintech companies will have stricter requirements to adhere to in order to ensure the security of customers’ information and their systems.

However, there are a few points that are important to note.

The level of monitoring and oversight that the CBN will do on fintech companies is not certain. It is expected that it will not be at the level of oversight provided to the traditional banks, but whether it will be effective enough to fully rein in the fintech industry is yet to be seen.

While the CBN guidelines for open banking are directed more toward the fintech, the traditional banks have their roles to play in ensuring a viable open banking environment in Nigeria. Banks need to update their Third-party risk management frameworks and policies to incorporate Open Banking into their risk management considerations.

H. Pierson Advisory Team

Strategic thinking has long been viewed as essential for leaders of organizations. The ability to anticipate and plan for the future, to think critically and creatively about complex problems, and make effective decisions in the face of uncertainty and change, is more necessary now than ever. These capabilities will be dramatically augmented and magnified by artificial intelligence systems such as ChatGPT.

With the ability to process large amounts of data, identify patterns, and make predictions, AI will provide fresh insights and perspectives that were previously unavailable to company executives. This will enable them to make more informed and accurate decisions – and to anticipate and plan for the future more effectively. But it won’t replace the human element in strategic thinking, which remains critical.

Currently, AI can analyze vast data, spot trends, make forecasts, and help leaders identify and mitigate business risks. Soon, it will also simulate different scenarios and provide leaders with various options and recommendations for which path to take. In the near future, I expect to see symbiotic relationships between executives and AI systems, in which they both work together to enhance decision-making, problem-solving, and strategy development.

WHAT CAN CHATGPT DO?

ChatGPT has a plethora of use cases across the board including.

Solving mathematical questions
Producing proof of concepts
Writing long-form content like essays and reports

WHAT CHATGPT DOES NOT DO?

ChatGPT can be a great place to start, but it won’t solve all of your problems.

It cannot think or make decisions independently.
It does not distinguish or understand emotions and may respond inappropriately in certain situations.
ChatGPT cannot understand the entire context of a conversation; it can only generate responses based on the input it receives at any given time.
Even though ChatGPT has been trained on a large amount of data, it is still inaccurate and may occasionally respond with incorrect or illogical responses in certain situations.

BENEFITS OF CHATGPT

Businesses can speed up response times and enhance customer service by using ChatGPT, which can handle a high volume of interactions accurately and quickly. In fact, the more you interact, the more ChatGPT can pick up on your tone and develop into an AI assistant.

ChatGPT can increase productivity by freeing up staff time for more complex and imaginative tasks by automating routine tasks like responding to frequently asked questions and creating a transcript from your most recent presentation.

ChatGPT can handle a high volume of interactions at the same time, making it an ideal tool for small businesses to large corporations.

I WANT TO CREATE MY STRATEGY, SHOULD I USE CHATGPT?

No. This is because:

Chat GPT will find it difficult to develop a thorough understanding of your environment because markets, rivals, suppliers, and a host of other factors have vastly different values and contributions to the success of your company.
An expert must compile, analyze, prioritize, and act on the data discovered during an internal SWOT or PESTLE analysis of your strengths and weaknesses. This is something ChatGPT cannot do.
ChatGPT is unable to develop a corporate, functional, or departmental strategy for your business due to a lack of situational understanding.
It won’t help you think strategically about how to use the information mentioned above to generate a clear path forward.

The goal is to use the tool as a support mechanism that provides leaders with basic-level strategic advisory services. It should be noted that the answers given will not be specific to the person who asked the question, but it can be useful for brainstorming ideas.

H. Pierson Advisory Team

Economic cycles are nothing modern. Business leaders have constantly had to deal with things like unstable job markets, supply chain confinements, and cost changes. Concerns about a potential period of weak economic growth is however justified. The two most important factors are how long it will last and how much damage it will cause.

Although no one can see into a crystal ball, there are some concerning signs that should not be ignored. For Nigerian businesses in 2023 for instance, they will continue to cope with several vulnerabilities including:

A high-cost environment.
Challenges with the retention of talent with the increasing demand for migrant workers in the United Kingdom, Canada, and other developed economies. This is without prejudice to the rising cost of living in the aforementioned countries.
Post-election political risks

It would be short sighted for business leaders to not prepare for some kind of economic slowdown when you consider this along with the frail global forecasts and the pandemic’s ongoing effects.

Despite the doom and gloom, businesses can take practical actions to lessen the effects of economic slowdowns. Instead of worrying about potential future events, this is the ideal time to check that your organization has the necessary systems in place to not only weather storms but to thrive in them. How?

Pay Attention to your Business Relationships

Customer relationships are crucial regardless of the economy’s outlook, but they can become even more crucial during hard times. Understanding how the economy impacts your customers’ businesses is crucial, but it’s also a great chance to figure out how to help them and add even more value.

Partner relationships can also be very important. Strong partnerships can help to stabilize or even increase revenue streams because they share the burden of acquiring new business, even though this may result in slightly smaller overall revenue pie slices.

Diversifying your customer base is essential. When the economy is struggling, it’s crucial to evaluate your customer base and determine whether your business is overly dependent on a small number of significant clients. If that’s the case, think about how you can diversify your customer base and invest in forming new connections. Be cautious when adding new customers because you will want to make sure you can still provide excellent customer service. When every business is vying for a small pool of customer dollars, this differentiation becomes particularly crucial.

Motivate your Talent

Taking care of your team should always be a priority, especially when the economy is weak, as we frequently mention here at H. Pierson. When there is talk of a recession or weak growth, employees are concerned about their own finances and layoffs are a real possibility. It’s not simple to find talented, strong candidates, as we’ve seen over the past few years.

Consider innovative ways to reduce costs without laying off your talent. Rather than making the decision to shrink your team right away, see where else you can cut costs, like overtime or scaling back some nice-to-have, but unnecessary perks? Also, you can offer employees a day off each week in exchange for lower pay? Or can the team collectively agree to a pay cut that ensures everyone keeps their jobs?

Increase your Firm’s Agility

In order to become more agile, your business may need to invest in itself or increase spending in some areas. In a struggling economy, this may seem counterintuitive, but you might discover that enhancing technological or organizational systems results in longer-term resource utilization. As well as allowing for the introduction of new goods and services, it may also permit the diversification of income sources.

Any department in your organization could benefit from agility. You can change how you interact with customers and assist them in discovering new value in the goods and services you provide by using agile marketing. Agile development may entail freeing up unused resources to give your team more time and freedom to think creatively and make the best use of their collective talents. Your human resources department’s agility may take the form of job-sharing arrangements to better utilize strengths and tap into your talent pool or cross-training staff to take on new responsibilities.

We are aware that not all organizations can implement these ideas, and that there are times when difficult choices must be made. Transparency is key in those situations. Be clear about the needs and objectives of the business and try your best to make decisions for your employees with respect and gratitude. Take into account the significance of every position within your company as well as the effects on those left behind when positions are eliminated. Show that you have a plan in place to guarantee a fair and enjoyable working environment, even if the size of the team needs to change.

When times are tough economically, having the right strategy and the insights required for effective strategy execution, is mission-critical. Reach out at strategy@hpierson.com and let us guide you through a free consultation to determine how your company can best develop a plan to remain strategy-protected both now and into the future.

H. Pierson Advisory Team

AUTHOR: JOSHBERSIN

In today’s skills-based economy, people want to learn faster than ever. More than $200 billion is now spent on various forms of workplace training and the volume of content is massive. There are tens of thousands of videos, courses, articles, and tools dedicated to helping people learn. And more and more of it is designed to be “in the flow of work,” so you can learn where you are, when you have time, and when you need the help.In this mad flurry to put more and more content online (YouTube now has 23 million channels and gathers more than 5 billion views per day), we seem to have left something out. The most powerful and memorable learning actually occurs when we talk with other people.

Take a look at the research done on the Ebbinghouse Forgetting Curve, which essentially shows how quickly we forget what we learn. When you study alone, you typically remember 28% of what you learned after two days. When you repeat the material, you remember 46%.

But when you use it, answer questions about it, and interact with others, you remember 69%. The reason? Actually conceptualizing, recalling, and using information is what creates the “memory pathways” that stick in your mind.

Why do you think we have homework assignments and work in groups in school? Why do teachers give lectures and then ask students questions to discuss in a group? It is a well-known fact that collaborative, cohort-based learning is the most valuable, useful, and memorable way to learn.

And we must remember that the “teacher” is always a vital part of the learning process. This person may be a subject-matter expert, a renowned researcher, a lecturer or instructor, or a course facilitator. Through the process of asking questions, providing advice, giving context, and explaining specific examples and solutions, the teacher “brings learning to life” for each individual in their own important way.

Learning Platforms: How This Has Been Lost

The learning technology market is a fast-moving, somewhat fad-driven space. Whenever a new technology is invented, L&D professionals rush to see how it could be used for learning.

As I like to remember, in the early 1980s when the first PC’s came to market, one of the sexiest ideas was to use them for training – so technologists hooked up laser disk players and developed video learning programs that cost hundreds of thousands of dollars to build.

Since then we have “experimented” with social interactions in many forms of learning, and I have to say most of them have been somewhat limited, unimaginative, and more or less “bolted on” to content. In other words, what we’ve been doing is building lots of self-study content which has “some collaborative features,” but mostly focused on comments by learners.

I recently participated in a large online masterclass which I authored through a series of videos. The students loved the content but the interactions were limited because we did not group people into small groups and did not use a platform that truly facilitated group learning. I’m here to help you figure out how to fix this.

(When done well the results can be amazing. Hive Learning, a provider which focuses on designed collaborative learning, has proven through A/B testing a 50% increase in retention through their environment when compared with traditional classroom training. Nomadic Learning, who I discuss below, regularly achieves over 90% completion rate regularly in their cohort-based programs.)

Since building a collaboration platform is expensive, most vendors have lashed together off the shelf tools. The market has essentially evolved as follows, and in many ways, this represents an industry-wide exploration and learning journey we’ve all gone through together.

Learning platform vendors, of course, fall into various traps. They develop a platform that facilitates a certain type of activity (ie. The LXP vendors focus on the discovery of content, not the content experience itself), and then they sell their products as horizontal solutions. We as L&D and HR professionals have to buy these platforms and more or less “stitch them together” to build a total solution.

In particular, if you want to drive change, alignment, innovation, and relationships through your programs (as we do in the Josh Bersin Academy, for example), then you have to design your programs for group activity. And one could argue that this is also true for pure technical skills: coding academies and most technical certificate programs require group projects, design sessions, and “studios” that bring people together in small groups.

I know in my own career these group learning activities have been far more memorable in the long run, but that doesn’t mean “micro-learning” is also important. Group and cohort-based learning often fall into the “macro learning” space, while self-study and reading fall into the “micro-learning space.”

How Platforms Are Changing

As you consider all these issues, let me point out how learning platforms are starting to address this problem, and I’m going to talk primarily about two I know well: 360Learning and Nomadic Learning (the company I’m partnering with for the Josh Bersin Academy). There are many others (Intrepid, NovoEd, Hive Learning), and I will try to compare them briefly at the end of the article.

In the case of 360Learning, the company was founded six years ago by a passionate and brilliant engineer (Nick Hernandez) who realized that the most important learning that takes place is driven by an expert. Over the last decade, he has built an amazing platform that enables any expert in your company to “teach classes online” without the burden of “building complex content” or even hiring an instructional designer.

Underneath all the technology is a simple concept: a human (teacher, facilitator, expert) is at the foundation of great learning. And as 360Learning calls them, they are “learning champions.” (We are all learning champions at different times in our lives.)

In the early 2000s I wrote a lot about this idea, and we called it “SME-authored content.” (We called it “from e-learning to we-learning,” which was a cute idea.)

At that point in time products like Presedia, Breeze, Brainshark, Articulate, and other “Powerpoint to Flash” tools become hot, because they let people take their PowerPoint presentations and quickly turn them into instructional programs. Today many of these products are gone (or evolved), and we need a new system that facilitates this “expert-led” approach that is easy for experts to use.

I won’t get into great detail about how 360Learning does this, but it’s quite an amazing system and the company now has more than 500 large clients and is used by Safran Group (global aircraft engine manufacturer) where hundreds of experts teach others throughout the company.

Every single company needs a platform like this, and in my travels, I have never found a system that focuses so well on letting an expert (L&D or line leader) author content, share it, certify experts, and create an ongoing collaborative experience with employees. The company’s concept is “teaching experts to author and teach” in a highly scalable way.

I know this works because I’ve talked with some of their clients. Companies like Safran Group have almost 5% of the professionals authoring courses which are consumed by others. Imagine what this model could do to unlock expertise in your company.

Initially, the company positioned themselves as an LXP but they’re really much more. So position them into the “program management” category in my model and really are creating a new category for expert-authored, collaborative content. (LXP’s are primarily tools for content discovery and aggregation.)

When you think about the problem in this “human” way, you find new features become important. 360 Learning, for example, keeps track of all interactivity by learner and gives instructors lots of data about what content people are using, where they seem to need more help, and how “engaged” they are with the programs. This is exciting proprietary stuff, which really makes customers happy.

Nomadic Learning, the company I partner with for the Josh Bersin Academy, is even more interesting. Matt Burr and Tim Sarchet, the founders, built a business called “50 Lessons” which created video-based stories from the world’s greatest CEOs around the globe. (Similar to BigThink.) The videos were amazing (I watched many of them), but what Matt discovered is that nobody ever watched more than two videos in a row and most people stopped watching after 3-4 minutes. In other words, there was very little “depth of learning.”

The problem he discovered, which is even worse now, is that people just don’t have time to sit down and watch videos for an hour or more at a time. My research with LinkedIn shows that we waste almost a day a week on distracting emails and the biggest “challenge” people cite about their learning and career development is “I don’t have enough time.”

So Matt and Tim set out to build something new. I won’t give away the secrets, but the whole idea of Nomadic is to build a learning experience that “draws you in” and continuously gives you surprises, videos, exercises, ideas, and interactivity – in a way that makes it easy to stay engaged. Matt likes to call it “semi-synchronous,” because you can stop and restart at any time – but you do have a “time-bound” program to finish, so over a period of weeks you’re expected to stay on track.

In the case of Nomadic, the platform, content, and collaboration are integrated in a designed way. Since Nomadic is a custom content and video storytelling company, the programs feel like carefully designed integrated experiences, and you keep “wanting to come back” whenever you can. In the case of cohort-based learning, Nomadic has learned that by arranging people into small groups (20-50 people) the learning experience is personal, collaborative, and innovative. So the “programs” in the Josh Bersin Academy are designed to take place in groups, and each exercise brings people together in innovative and novel ways.

What I’ve experienced so far is that Nomadic’s platform (and 360 Learning’s platform) are much more than “learning” platforms. Just like face to face events, they bring people together, let people share their challenges and ideas, and create alignment toward strategic solutions. And Nomadic includes its own built-in LXP, so there are hundreds of curated resources available for micro-learning at any time. One of our clients, Medidata, is using the Josh Bersin Academy to drive their entire digital transformation. And this is the type of thing that 360 learning could do also.

What To Consider: Many Platforms Abound

There are many learning platforms and content providers on the market, and they are built by smart, innovative entrepreneurs. My point in this article is not to try to cover them all, but rather help you think through the importance of “group-based learning” and make sure you focus your energies on “what is being used for macro learning” and “what is being used for micro-learning” as you build your solution.

Remember To Focus On Culture

Finally, let me mention the importance of building a learning culture. Regardless of your efforts to build great content and hire the best instructors, the culture of learning always prevails.

Do people have time to learn? Do they feel a sense of empowerment and belonging in the program? Does the experience “meet them where they are?” And is there an expert, teacher, or facilitator to make sure employees can really get what he or she needs as they push themselves to the next level?

Nothing creates a learning culture more than groups of people activated to learn together.

New ideas, conversations, and talking about solutions create memorable skills we all carry for a lifetime. As you select your tools and build your strategy, make sure the focus on human supported, group-based learning remains at the core. You’ll be glad you did.

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Leadership Assessment is key at any stage of your career

Regardless of where you are in your career, leadership assessment can help you find your strengths and weaknesses as a business leader. It is important to know more about the leadership competencies because:

This will allow for utilizing one’s talents best
Understanding these skills also helps capitalize on opportunities in order not waste time or resources
A lack thereof could mean an inability of adaptiveness which would hurt company growth

The 4 benefits of leadership assessment:

Leadership assessments can guide you in creating your career goals
Leadership assessments can increase self-awareness
Assessing your leadership can help you improve in all stages of your career
Leadership assessments can help in improving the leadership development plan

1st Benefit: Leadership assessments can guide you in creating your career goals

Leadership assessment can give you an objective idea of your abilities as a business leader no matter what stage you are in your career. An effective leadership assessment lets you — and your organization — know in a constructive way just what kind of leadership skills you have.

Guiding your career goals
While gauging your capacity to handle different roles and responsibilities, a good leadership assessment can help you to define where you want to go as an executive and how to get there. Different leadership assessment tools offered by top international business schools can assess your performance in a variety of areas and situations.

But whether the leadership evaluation is focused on personal leadership or business management, it can tell you what your strengths are and what you need to learn to tackle new challenges. A detailed assessment can guide you on the experience and the leadership and management training required to achieve your career goals.

2nd Benefit: Leadership assessments can increase self-awareness

A high-quality leadership assessment will inform you about what kind of person you are. This is a critical factor on the journey to becoming a better leader. Self-awareness of your personal qualities and leadership skills can improve exponentially the way you lead organizations and deal with others. It can also help you build on your leadership strengths and confront your weaknesses.

Learning more about yourself can increase your leadership effectiveness in the process. You will be able to gain the support and trust of your team members if you have an honest assessment of your leadership capabilities. This in turn will boost your credibility.

You should remember, however, that leadership evaluation should not be seen as a way to provide a definitive picture of an executive’s potential capabilities. Leadership skills are continually developed and honed through experience and corporate training, rather than being innately acquired.

Good business schools offer one-on-one leadership coaching with experts who can provide a frank but sensitive appraisal of your management skills. When you are a leader it is often difficult for others to you tell you candidly how you are doing.

3rd Benefit: Leadership assessments can help you improve in all stages of your career

A lifetime of learning in top management means that you should be standing back to reassess your leadership skills at regular intervals. Leadership assessment can typically help you decide what training courses are right for you at different stages of your career. Leadership assessments are vital to ensure upgrading of leadership skills and competencies by the following people:

Functional Managers

An ambitious functional manager seeking management training courses to advance his or her career must first undergo a leadership assessment to find an appropriate leadership development program.

Mid-career Business Leaders

A mid-career business leader considering an executive development program to boost his or her value to the company needs a leadership assessment to find a training program that perfectly fits.

Senior Executives & CEOs

A senior executive or CEO at the top of an organization, seeking ways to move the organization forward while seeking out opportunities and leading with conviction and authority, must first submit to a leadership assessment.

People Seeking Development Of Leadership Skills

People looking to develop strategic leadership skills to tackle specific challenges, such as business development strategy or sustainability through targeted business management training, must first take a leadership assessment.

4th Benefit: Leadership assessments can help in improving the leadership development plan

Leadership assessment can play another critical role for your organization as part of a leadership development plan. It allows a company to appraise the abilities of business managers at different levels to lead teams and projects.

Leadership evaluation helps human resources departments to identify gaps in the talent pool, while establishing who is prepared to take on senior general management positions when vacancies arise. With the baby-boom generation reaching retirement age, companies need a solid succession planning process to ensure continuity of leadership.

That involves identifying the executive education needed to ensure your company has the right people with the right training in place at the right time. The process can get a healthy head start with effective leadership assessment.

As companies prepare for another year of attracting, hiring and retaining employees, there are a few developments and trends in the HR and TA industry they should keep an eye out for, says Neil Costa, CEO of HireClix.

The world of work has changed significantly since 2020. Many organizations have adjusted their business strategy and approach, which has resulted in a change to their people strategy. More importantly, employees’ values have evolved. The “great reshuffling” taught us that employees are willing to move jobs for more balance, greater flexibility and growth opportunities. Many workers are no longer willing to stay with organizations if their needs and values are not aligned.

Sourcing the right talent continues to be a huge challenge for companies in the current labor market and will continue into 2023. And with the complex business environment of low unemployment rates amidst fear of layoffs and hiring freezes, Human Resource (HR) and Talent Acquisition (TA) leaders are getting mixed signals.

As companies prepare for another year of attracting, hiring, and retaining employees, there are a few developments and trends in the HR and TA industry they should keep an eye out for, including a focus on internal mobility opportunities, a consumer-like experience from career sites to attract employees, and creating and showcasing an authentic brand.

Prioritization of Internal Mobility

Companies will focus on providing more opportunities to internal employees by being more transparent about job openings and the internal hiring process. This is necessary to improve retention and provide the career growth employees crave. Recent data from the LinkedIn Global Talent Trends ReportOpens a new window shows that companies that excel at increasing opportunities for internal mobility have better retention, as employees who make an internal move are more likely to stay at their organization than those who stay in the same role. It is often easier for an employee to find an opportunity outside their current organization than inside. Executives will realize that internal mobility processes that are not employee-friendly significantly impact their turnover. Companies should eliminate the “hidden job market” and post all open roles for employees to view and self-nominate. Hidden job markets perpetuate diversity, equity, and inclusion issues as they send the message that you must be “in” with the right leaders to find your next opportunity.

Return of Hiring Events and Job Fairs

Due to the distance created between workers worldwide at the peak of the pandemic, we anticipate everyone will want more face time when it comes to making one of the biggest decisions in life: getting a new job. We believe that both employers and candidates will want the in-person time to get to know and understand each other’s values. Employers will be able to screen employees for productivity ability, something that is crucial as they continue to offer flexibility and remote work accommodations. Job seekers will want to meet with their future employers in person as the demographics are shifting to a younger workforce that values a company’s mission, culture, and authenticity more than its predecessors.

Revamp of Career Sites

The current employment market is dynamic, and creating an engaging candidate experience will be critical as job seekers expect more from big brands. The Fortune 500 job sites will need an extremely fresh user experience and operate more like retail consumer sites such as Netflix and Amazon, and we expect about 50% of these companies to do so. This means light and easy interfaces with smooth interactions. Finding a job used to be more of a transaction, but since changing jobs is a top life event outside of growing a family and buying a home, candidates will expect more from employers. Applicant rates are declining because of dismal candidate experiences and the tighter labor market, so organizations that move with speed and creativity will establish a competitive advantage when hiring.

Increased Employer Branding Budget

Over the past two years, we learned that candidates are more selective about where and whom they work with—culture and values matter. Most employers invest little in employer branding but focus their dollars on directly driving applicants to jobs. With the evolving nature of the workforce and the challenging labor market, it will be critical for companies to create positive brand impressions across all media and marketing channels so job seekers associate a positive experience with the brand and take action to apply for a job. We will also see some organizations refresh their employer brands to address the new world of work and showcase how employers are adjusting to the needs of employees – offering in-person, remote, and hybrid opportunities. Candidates will be attracted to those companies that can be more thoughtful and make a connection using smarter strategies to get their brand in front of them earlier in their job search by authentically representing them through consumer advertising channels.

Hiring Freight Train

The looming recession will continue hiring needs in the healthcare, transportation, and retail industries. As older generations retire from the workforce and expect to travel more, dine out more, and need more healthcare services, the natural dip in the population of the younger generations will have plenty of opportunities in those industries to find great jobs. The main street storefronts and the logistics behind getting products to their destinations will generate countless jobs, even in a tight economy. Hiring opportunities remain strong within what I call the “Main Street Workforce,” as several sectors have only just recovered from the pandemic, leaving more flexibility to keep recruiting and avoid mass layoffs. It is also much easier to switch jobs within sectors on the main street because many skills are transferable. For those who may have left their job due to family obligations, COVID-19, etc., it’s easier to return to the workforce via the main street.

As companies plan, budget, and prepare for 2023, these are some potential key trends to consider in their recruiting and talent acquisition efforts. Take the time to invest in your company’s career site, refresh your creatives and build brand assets to attract the right talent. Take advantage of renewed opportunities to connect with professionals and prospective employees at in-person hiring events. Highlight alternative career paths like internal mobility and the main street workforce. Overall, continue to pivot and adapt to the changing wants and needs of the workforce – or risk losing out on attracting some of the top talents in your industry.