Wednesday, June 3, 2009

Alfred P. Sloan Jr.: An Idea-Friendly Guy

How do you present a new idea at a board meeting? Do you just lob it into the discussion? Do you "seed" the idea in advance of the meeting with the CEO and/or other fellow directors? Do you keep your mouth zipped if the boardroom is a no-new-ideas zone and everyone likes things the way they are?

This is a robust topic — as I was surprised to learn when I teed up the question for the readers of the Directors & Boards e-Briefing, the journal's monthly online newsletter. Click here to see how numerous and thoughtful the responses were that we published in the just-released June edition. 

This whole debate was instigated when I told the story of how one prominent executive was swatted back when she presented what she thought was "a great idea" at a board meeting. You can read that story here in my editor's note in the May e-Briefing.

As a capper to the above exchanges of opinion, here is one tactic guaranteed to ensure a free flow of ideas in a boardroom. Howard Guttman, a consultant specializing in building high-performance teams, tells this story in his recent book, Great Business Teams: Cracking the Code for Standout Performance (Wiley, 2008).

It concerns the legendary corporate chieftain Alfred P. Sloan Jr., head of General Motors at a much more auspicious time in the industrial behemoth's history. At a meeting of one of GM's top committees in the 1920s, Sloan said, "Gentleman, I take it we are all in complete agreement on the subject here." Heads nodded around the table. "Then," continued Sloan, "I propose we postpone further discussion of this matter until our next meeting, to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about."

A wonderful anecdote, no? And what a choice bit of wisdom for board chairman and members to apply to eliminate any doubt about whether new ideas are welcome once you step into a board meeting.

It also makes one wonder, doesn't it, about the fate of GM. Would the company be declaring bankruptcy this week if Sloan's philosophy on debate and dissent in the company's meeting rooms — a philosophy that presumably included the boardroom — had still been operative under successive managements and boards?