Does your CEO Feel Safe Enough to Admit Failures?
(Psychological Safety and the Board/CEO as Team)
By Tim Harrington & Kevin Smith
It sounds kinda weird to say that we hope the CEO of your credit union fails. But in a way, it’s true. (We’ll qualify this. I swear.) More importantly for credit union board members: Does your CEO feel confident and safe enough to readily share any failures with you? A few weeks ago we wrote about Google’s research into what makes teams perform at the highest level. The number one indicator: psychological safety, the ability to be vulnerable and know that this would not be used against you by the other team members. Does your board and CEO operate at this level? You are a team after all.
Here are two scenarios that we see as radically different:
1. The board asks the CEO to report on the progress of strategic project X. The CEO responds saying it will take some time to gather data to adequately address that project. He/She requests that this be an agenda item for next month’s board meeting. At reporting time there are a flurry of statistics, qualifications, points of context and a lot of use of the passive voice (i.e. “assumptions were made,” “benchmarks were missed,” “due diligence was done”).
2. The CEO calls the board chair and says, “I need to give you an update on strategic project X. We missed the benchmarks and a few things have gone wrong. I don’t want you to have any surprises. I will update the rest of the board more thoroughly at the next board meeting. In the meantime, can you give them a heads up and send them my way if they have any questions?”
Both of these are reports on a failure. The tone of the two are polar opposite. In scenario 1, the CEO comes off as defensive, covering tracks, diverting blame, delaying accountability, etc. In scenario 2, the CEO is proactively addressing the issue, before being asked, in plain language and leaving the door open for further information which is a higher level of transparency. Which one of these two CEOs has the trust of the board, and vice versa?