Let’s bring up culture again

Great brands, great experiences, great organizations.

Declining brands, woeful experiences and toxic organizations.

Two sides of a cultural stick perhaps.

In the old days, structure told us how things were supposed to work – the designed organization. Something was also telling us that structure may not work as intended – the lived organization. We’ve moved a long way to appreciate the organization today as a place of living and expression as much as a place of processes, roles or corporate outcomes (if not more). Ultimately, culture plays a big part in corporate success, and failure.

Culture was a really trendy topic some thirty years ago, before we realized some challenges with validation and organization effectiveness. Maybe more cult than culture! There are more opportunities today to evaluate this critical feature of corporate and working life; more tried and tested methods. So, let’s use them.

The challenge with culture is what we are measuring and why. Is there ‘good’ and ‘bad’ culture? How do we decide on factors to assess values, beliefs and assumptions? And assuming we can identify dimensions of meaningful insights, how does it relate to effectiveness, individuals, groups, leaders, stakeholders and customers? Or, to change and adaptation? Good cultural insights need tailoring. But don’t wait for the crisis. Culture creeps silently, for better and for worse, surviving the quarter perhaps, but eventually…

There are so many issues from culture it seems impossible to ignore. Talent management, succession, retention, collaboration, communications, structure, risk, resilience, innovation, strategic planning…and yes, even profit. Leadership matters because of the ability to be attuned to culture, the intangible yet very tangible force behind success as well as ruination. However, culture can now be a little more visible and a little less reliant on someone’s intuition, speculation or the occasional away day. Cultural diagnosis may be somewhat science and somewhat art. But now there’s more science, which can help with the art of leadership!

Virtually all aspects of strategy, organization development and effectiveness take something from cultural insights. We meet leaders every day and see the situations they encounter – organization culture is definitely one of them. At Friisberg & Partners we are very well positioned to support incoming and existing leadership with rigorous methodologies and tools for cultural diagnosis and change.

How can we help you?

What are the biggest biases in Executive Search and can AI help to eliminate them?

Biases in Executive Search can negatively impact the process and result in bad hiring decisions.

They can cause overlooking qualified potentials who don't fit the stereotype of the ideal candidate for the role.

It's important to be aware of unconscious biases and ensure that the assessment process is fair and objective.

Here are some of the biggest biases to be aware of during the Executive Search.

It's crucial to be mindful of these biases and take steps to reduce their impact on the Executive Search process.

Can Artificial Intelligence can help to bring more objectivity?

In many cases, AI can reduce humans’ subjective interpretation of data.

It is clear that AI can quickly screen every applicant’s resume for specific requirements like a degree or a specific amount of experience. If a hiring manager has a certain bias for or against a certain university or region, that bias can be eliminated with AI. At the same time, extensive evidence suggests that AI models can embed human and societal biases and deploy them at scale as underlying data rather than the algorithm itself are most often the main source of any issues.

We asked ChatGPT and were pleased to find out it recognises the invaluable need for a “human touch” in Executive Search:

“In theory, AI can help remove biases and subjectivity from the executive search process. By relying on data and algorithms to make hiring decisions, AI can help reduce the influence of human biases in the selection process. However, it's important to keep in mind that the algorithms used by AI systems are only as unbiased as the data they are trained on, and any biases present in the training data can be reflected in the results produced by the AI system.

To ensure that AI systems are used in an unbiased and effective manner, it's important to regularly monitor and evaluate the results they produce, and to address any biases that are identified. Additionally, human oversight and involvement in the executive search process is still important to ensure that candidates are evaluated holistically, and to provide a personal touch to the recruitment process.”

Lorraine Wrafter is a Supervisory Board Member and Chair of the Nomination & Remuneration Committee with Ignitis Group.

It is already more than a year since the new Supervisory Board of Ignitis Group, one of the largest energy companies in the Baltic states, was elected. The collegial body of the Group comprises five independent members with international experience and two representatives of the Ministry of Finance, the Group‘s majority shareholder.

Our colleagues in Vilnius talked to Lorraine Wrafter, the independent member of the newly elected Supervisory Board, about the role and value of a collegial body in a listed company with the state as a majority shareholder and what it takes to be successful as a member of such a body.

What is your role in the Supervisory Board of Ignitis Group and as the Chair of the Nomination & Remuneration Committee? How much time did you need to get into the roles and what helped you?

In the Supervisory Board our role is to look after the strategy, key risks (managed risks), ensure business compliance and performance.

My role as the Chair of NRC is to lead the committee and ensure the company is using the right tools and processes to develop the capabilities through succession planning and building the talent pipeline and to engage and reward people.  Our role is also to propose an effective organisation structure for decision making and offer assistance in the hiring for Board positions within the Group companies.

The Supervisory Board's first meeting was online and we continued to work online for six months due to Covid and then start of the war in Ukraine.  One of our first meetings was to get to know each other, who we are outside of the board room. We had weekly/ fortnightly meetings for the first few months to get us all up to speed on the business.  The Supervisory Board and NCR meet monthly.

I was new to the Energy sector and my colleagues were a great help to get me up to speed quickly.  I had one to one online meetings with all the Supervisory members to learn about the industry, state and a publicly listed company. We can also call each other whenever we have questions.

What helped me to prepare for the role was the education I received from the Institute of Directors and two advisory Board positions.  In addition, Ignitis Group invited me to attend, on behalf of the Supervisory Board, a programme run by an external company to understand corporate culture and governance in the Baltics.  They also invested in Sustainability and the Board‘s role.

Could you please briefly introduce the business of Ignitis Group. What were the business expectations when you joined the Supervisory Board? What were the main business challenges/ how were they changing?

It is a Energy business, with a fast growing Renewables business that is competing in global markets. We acknowledge the tensions between being both a local Lithuanian company and growing internationally (in Europe) within a highly competitive market. Ignitis Group is a strictly regulated and listed company that has to manage the demands of the state and private investors. All these factors add to the challenges for the business particularly in finding the right talent to run the business and to reward people.

The complexity of the Group structure and decision making processes was one of the first areas the Supervisory Board identified that needed to change. Ignitis Group is now introducing a new structure to help them make faster decisions across the group while ensuring accountability and controls are in place.

We, in the Supervisory Board, were happy to see the resilience and proactiveness of the Group Management team / Executive Board when facing the challenges related to the war in Ukraine  – ensuring the energy supply to customers and at the same time moving forward with the agreed strategy, not stopping with growth, especially in renewables (the company "Ignitis Renewables" which expanded quickly in terms of people during the last year).

How did the business challenges affected the work of the Supervisory Board and your role/ roles? Has your role/ roles evolved since you started your term in October 2021? If yes – how?

Challenges were more for the Management Board – our concern was for the Management Board and employees' well being.  It has been a very tense year for the business with the war, energy challenges, growing the business and meeting their financial commitments to the state and private investors.  During this period employee engagement remained high confirmed by the recent eNPS results.

The role of the Supervisory Board is evolving and the area of focus is the growth of Renewables from reviewing Renewable Projects, preparation for bids, sourcing talent around the world and paying competitive market rates.

Reflecting on your experience what do you think are the key factors for success as a Supervisory Board Member? The Chair of the Nomination and Remuneration Committee?

Firstly we are a diverse team.  There are seven members with seven different skills sets and six nationalities.  This gives a great balance of perspectives.  We all have an expertise and at the same time we can contribute and challenge each other in their area of expertise.

We are functioning very well as a team.

Being new in the Supervisory Board and also in the Energy market I think it is very useful to get an overview/ knowledge both about the specifics of business, corporate governance and culture at the early stage.

We talk, ask questions, and are open to being challenged and are of course supportive of each other.

Another important area is setting clear accountabilities and boundaries with the Boards of the Group companies so that each collegial body feels accountable, acts within the boundaries and decisions are made on time.

At the end of our meetings we have roundtable time just with the Supervisory Board or Committee members.  At these sessions we reviewed what went well and what could be improved and share this feedback with the Management Board.  There is no defensiveness.

We have an annual self-assessment of the Board and committees done by external company – another opportunity to reflect and improve the effectiveness of the Board.

You mentioned that setting clear accountabilities and boundaries with the boards (Group Board and Boards of the companies) is a very important factor in ensuring an effective corporate governance. Being a member of a Supervisory Board, how could you support the Ignitis Group companies through their Boards?

Our interactions with the Boards of the Group companies are limited – mainly strategy meetings and business updates. Each of the Group companies has its own board to manage the business and controls. The Group Supervisory Board does not need to get involved with them.  They have the controls in place.  Our goal is to ensure the Group organisation structure and decision making processes are in place for transparency and in line with anticorruption policies while supporting a fast changing and growing business.

Another important thing in ensuring effective governance is implementation of the principle "Nose in, Fingers out". We, as the Supervisory Board, are responsible for hiring the right people for the Boards and making them accountable, for guiding them based on overall business perspective ("business lenses") and support in decision making – but not making decisions for them. It is a challenge for all of us – especially in a fast growing business, i.e. Renewables, where we say "We are flying the plane while building it".

The Group Organisational Development Director, Executive Board member, and I have a good working relationship; we are open and direct and we learn from each other.  It is a two-way process. Before each NRC meeting we have a pre-meeting to review the agenda items and the materials. We discuss areas on which to focus, what could be contentious topics and how to manage the discussions.  I play "devil‘s advocate" to pre-empt what questions could be asked by the Board members so that the presenters are prepared.

NRC has varied activities such as agreeing a new Expat Policy, Succession Planning, Female Talent Pipeline, Engagement and Reward programmes. One of the biggest challenges is around Reward where we try and balance the needs and concerns of a state-owned company that is operating in European/Global markets and is publicly listed.

During the last year we did a lot of hiring for the Boards, currently we are also looking for the members of the Committee for Risk Management and Business Ethics Supervision, with the focus on Safety and Health.

I am glad to work with a management team which is very motivated.

The Supervisory Board of Ignitis Group probably could be seen as an example of a real diversity: 4 women and 3 men, people from various international businesses (independent members) and representing the Government (Ministry of Finance), 5 foreigners from different countries and 2 Lithuanians, as well as people representing different generations. How do you see group dynamics in such a diverse Supervisory Board in a regulated energy business?

I am excited to work in such a team and I am excited to talk about it.

We work very well together. We talk very openly, have discussions and debates, looking at things very objectively from the business perspective – actually we do not have many disagreements, and when we do, we manage to find solutions. Always looking through business lenses, and never with any emotional load when discussing the questions – maybe this is why we are working well.

The independent Supervisory Board members are from 5 different countries/ different nationalities, we all worked for private businesses where the things are done differently than in state owned companies (less bureaucracy and faster decision making).

It is good and useful that we can share our different experiences/ ways of working in different cultures. Two of us in the Supervisory Board are not from the Energy sector (myself and Tim Brooks) – so we have all the opportunities to learn about the Energy sector from other team members.

It is also very useful that we have very open minded members representing the state – through them we 'educate‘ the Finance Ministry on international business best practices.

What do you elicit, personally and professionally, from being a member of a Supervisory Board Ignitis Group? What are the key learnings so far?

I really enjoy being a member of a Supervisory Board. I 'have got' everything: state owned, publicly listed, changing and growing business with a truly diverse Supervisory Board. It is a business that can have a big impact on the planet too. I am passionate about the Company and my role in terms of how I can contribute to the business

What would you advise for Organisational Development and HR professionals who would like to join companies or advance their careers at Board level?

Be proactive, use all the opportunities to network and let people know you are interested in obtaining a Board position.  Take on advisory Board roles to gain experience. I would recommend attendance at a Board/Director Programme for collegial body members – to better understand the role and responsibilities of Board members and understand the governance issues.  It also shows potential Boards you are serious about joining them.

Executive burnout

Burnout is a widespread leadership topic that has grown in importance recently.

According to the World Health Organization, burnout is a clinical condition resulting from extreme, unaddressed workplace stress and can affect both employees and executives. The hot question of 2023 is not if executives will experience burnout  - but when.

Dealing with burnout is a prevalent theme that appears not only in leadership development coaching sessions but also seems to be a major driver of senior managers wanting to change their jobs.

Commonly recognized as an emotional state where a person feels exhausted and out of touch with their work, burnout is also a well-known term in psychology and management used to explain why some people quit their jobs and look for new opportunities.

A recent Deloitte survey shows that nearly 70% of C-level executives are considering jobs that might better support their wellbeing. Although not on the same scale, we can say that our experience with executives confirms this trend.

Burnout becomes a serious challenge that may undermine the success not only of the career seekers but also of many businesses.

What needs to be done to cope with this new epidemic?

Knowledge about most typical signs and symptoms of burnout state is crucial. This can be a starting point for taking further actions or seeking and providing support. Physical symptoms like headaches, stomach-ache, neck pains combined with concentration difficulties, mental fatigue, impatience, cynical reactions, lack of motivation, anxiety and depression may be solid indications that burnout is there.

If an executive identifies these signs in their state and behaviour, a possible solution could be starting looking for a new job. However, if this new job is not in a less stressful environment, this solution could make the things even worse.

What other options are available?

Taking a sabbatical - a long break from work that will help executives recover from the work-induced stress. It can be paid or unpaid, and companies usually have a sabbatical policy that details the application procedure. Sabbaticals can help if the senior managers feel overworked or need some time to recover their creative capacity. However, if the burnout is due to some underlying issues in the team, or some personal reasons, it will be better to choose a different solution.

Downshifting - Starting a gradual process of changes that makes the work life balance easier, quieter, balanced, and much less stressful. This can happen by reducing work hours and/or responsibilities and may impact managers' incomes.

Working with a coach – taking this approach may help to constructively deal with burnout symptoms, identifying stress points and building new habits.

Finally, businesses contribution can make a huge difference. Prioritizing executives’ and employees’ well-being is essential for growth-oriented companies and building a strategic approach for prevention and support in case of burnout may turn out as significant competitive advantage.

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