Don’t waste a crisis: CEO & board team strategizing in light of the Covid-19 pandemic
CEOs and boards of directors now face unprecedented tests of leadership. Neither training nor previous experience has prepared them for the Covid-19 pandemic. Consider what we observed and recorded in real time during board meetings of a Canadian firm in 2020 and 2021: Despite market turbulence and reduced staff, the CEO led the firm to historically high sales and profitability. While the board expressed gratitude for this positive outcome, two accidents occurred in the plant during the same period; thus the board had lengthy discussions about how to enhance and rebalance monitoring and control vs. providing support and counseling to the CEO. Later, the CEO was outraged in his meeting with the compensation committee because he thought his Covid-19 bonus far too small, and the penalty he received due to the accidents unfair. Demotivated and frustrated, the CEO nonetheless proposed to acquire a competitor that was promising to the firm. Due to the lockdown, however, the board member possessing merger and acquisition expertise was unable to join the decisive meeting in person, which dramatically changed dynamics in the board room.
Scenarios such as the ones we observed are common. Researchers argue that the pandemic has complicated how CEOs and boards make strategic decisions: they have to deal with novel issues for which they have no precedent or policy; they have to work with information overflow on the one hand and lack of information on the other; as a result, they have to spend significantly increased amounts of time on deliberative discussions to explore different options, weigh competing alternatives, and prioritize; and more challengingly, they have to do all of these with maximum efficiency during extreme uncertainty about the future. But without directly observing and closely examining how CEOs and boards work together, we do not know what such deliberative discussions look like; neither can we appreciate the challenges and frustrations faced by boards and CEOs.
We therefore propose to examine CEO and board strategic decision making in board meetings, the only official venue where CEOs and entire board teams meet, during this extreme context. Following the strategizing approach, we will examine the micro activities, practices, and interactions in board meetings. Using video ethnography, an innovative multimodal data collection and analysis method, we will directly observe, record, and analyze CEO and board strategic decision making by way of addressing the following objectives:
O1. Advance theoretical and empirical knowledge of CEO & board strategizing in crisis.
O2. Identify best practices that CEOs and boards use during and post-crisis, with the goal of improving performance in potential future crises.
O3. Train & mentor PhD students to do video-ethnographic research with senior teams.
We will first analyze a 3-year video-ethnographic data set (Project 1) we have already collected which captures how a CEO of a Canadian firm worked with his board team during 2018-2021. We will then gain access to three CEOs and their board teams through HEC Montreal’s CEO and Strategic Management HUB (Project 2) and examine their board meetings for 2 years. 4 firms are the maximum that we can manage due to the labor-intensive nature of this research. This proposed study is, to our knowledge, the first longitudinal comparative video-ethnographic study on CEO and board team strategic decision-making in meetings.
In addition to academic conference presentations and publications in top tier management journals, findings of this research program will be disseminated to CEOs and board members through the CEO and executive training and coaching programs and professional conferences at HEC Montreal.