Listening vs. Hearing in the Joint Venture Boardroom

  

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Listening vs Hearing in the Joint Venture Boardroom.jpgMOST MEMBERS OF JV MANAGEMENT TEAMS lack the listening skills needed to successfully navigate JV Board discussions. It’s not that JV management teams are worse listeners than the rest of us. Far from it. Rather, it’s that the need to listen is greater, and the communication signals are often more muted and harder to hear to the untrained ear, when in a JV Board environment.

Consider a large purchasing JV in which management continued to pitch to the Board what management considered to be an eminently reasonable acquisition, not realizing that the Board was still unsure of the JV’s strategy upon which the acquisition’s logic was based. In a financial services JV, Board agendas were structured to showcase each department, with the end result being a parade of PowerPoint presentations from each member of the management team, with limited time for Board Directors to ask questions. Board members provided subtle hints that they wanted more strategic discussion, but management continued to charge forward, presenting page after page. Similarly, in a natural resource JV, management failed to connect the dots when a Board member asked for further study of a proposed capital investment. They did not realize that the Director was actually not supportive of the investment, but did not say so directly because it may trigger a discussion about conflicts of interest as the Director’s company was expanding its own capacity in the region.

If JVs are going to succeed, management teams need more advanced listening skills. The purpose of this note is to provide some practical advice based on our experience serving hundreds of JVs and being part of at least that many Board discussions.

ATTENTION PLEASE

Like the rest of us, JV management team members need to acknowledge that listening means more than simply pausing while someone else in the room is talking. Many do that well. They take a break from their presentation, stand or sit quietly while a JV Board Director comments or questions, fire a reflexive response, then, undauntedly, press on with their “presentation.” This is probably better defined as hearing. As Dale Carnegie said, “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” JV managers would be wise to heed such advice.

Truly listening in a JV, going beyond just hearing, requires more for a
couple of reasons:

  1. JV Directors tend to be less than blunt when providing feedback in Board meetings. Directors and other owner executives are often in a position in which they need to balance the interests of their companies with those of the JV. They are not often recognized or rewarded for their role as a Director. They are likely to be relatively new to the Board, given JV Board turnover is quite high. Many will have limited experience with the key business challenges the JV is facing, having been placed on the Board for reasons other than their specific expertise. They are unlikely to be afforded much time to dedicate to the JV. For these reasons and others, JV Board Directors tend to take a more conservative approach. They often do not want to upset their partners or directly reveal self-interest. In many cases, Directors lack a full command of the facts and rarely have the answer ready-made. Coming across as a good partner, avoiding embarrassment, revealing self-interest are more important to them than forthrightness.

  2. Listening well is not a natural strength for most of us. We tend to only retain a fraction of what we heard a short time after hearing it. We tend to believe we are right, play the victim, become defensive, and fall prey to confirmation bias. These traits can be exacerbated in JVs. Management team members often have less exposure to their Directors than does the CEO. Many only attend their part of the Board discussion and a subset of the lead-up conversations. Some in management view discussions with Directors, whether in the Boardroom or outside of it, as an opportunity to impress their boss, the CEO, with their presentation style and command of the facts, and only view the Directors as a secondary audience. These factors result in management team members having limited context and, at times, the wrong perspective, making them more susceptible to becoming entrenched in positions, feeling victimized, becoming defensive (usually after the discussion), and falling prey to confirmation bias. Of these, confirmation bias is probably the subtlest and most pervasive. We hear what we want to hear – a tendency that can be particularly off-putting to JV Board Directors.

WHAT IT MEANS TO BE A GOOD LISTENER IN A JV

Being a good listener in the JV Boardroom, and in lead-up conversations, requires being thoroughly prepared, but also extremely flexible. It requires having a sharp view of the key issues, but also a genuine desire to understand the Directors’ perspectives and an openness to being taken in a totally different direction. This does not come naturally to most of us. Thorough preparation often begets an entrenched opinion or, at least, a rigidity to avoid seeing our efforts minimized. However, good listeners maintain this flexibility and openness.

The best listeners in a business context have a true command of the facts before walking into a discussion, leave real space for questions in their agenda and management of the meeting, treat questions with care and not simply as a brief intermission in their performance, are willing to forego months of preparation to have an impromptu back-and-forth conversation, are able to recap those conversations in a way that progresses the issue, and take the initiative to capture the feedback in a detailed way and re-group with the team to collectively interpret it to best ensure the continuity of the discussion in future Board meetings and other Director interactions.

Characteristics of Great Listeners:

  • Have a true command of the facts– Nothing makes listening harder than not truly being prepared for a conversation. Lack of preparation forces the listener to do too much in the moment. True preparation for a joint venture Board meeting involves having a deep understanding of the owners’ interests, wants, needs, concerns, and constraints. It means having a working definition of success for the JV – one that the owners purportedly share. It means having a clear agenda, objectives, storyline, and supporting analyses. It means socializing ideas in advance of the session with all participants or at least a key subset of the participants. Collectively, it usually means weeks or months of preparation. Without this, there is simply too much to parse, process, and consider in the moment. There is no way to take a subtle question raised by a Director and make sense of it. 
  • Structure the discussion as a discussion. Every member of management presenting to the Board needs to ask: What do I really need out of this discussion? What are the key questions for which I need guidance, concurrence, or approval from the Board? Rather than presenting a litany of slides, the best management team members assume that the Board has read the pre-read – and they structure their time to get value out of the Board. In one recent Board meeting we attended, a JV Board Chair interrupted a management presentation, asking: “What do you want from this Board? What key questions are you asking us? Please take a maximum of ten minutes and three sides to summarize the issues, and then explain what you want from us – pose two or three questions where you need our views. What are you grappling with as a management team where we, the Board, might bring some insight?”
  • Treat questions as more than a brief intermission – To be a good listener requires one to be present and focused, make eye contact, encourage elaboration to develop a true understanding of the question, and to avoid signaling an eagerness to answer the question before it is ....

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