After the SARS outbreak of 2003, someone on the board of the All-England Club (or, more correctly, the All-England Lawn Tennis and Croquet Club), which runs the annual Wimbledon Tournament, asked exactly the right question: ‘What if …’ ‘What if we had another event like SARS and had to cancel?’
Not surprisingly, Covid-19 has forced the cancellation of this year’s Tournament (in line with almost every major sporting event on the planet) and the Club will receive more than $US140 million in compensation. Not as much as it would have earned if the Tournament had gone ahead, but enough, I assume, for the Club to survive a year without tennis.
In our boardrooms, directors so often ask for more data and greater detail (I think of these as the ‘What …?’ questions). These tend to draw us into operational, tactical discussions, frequently with a rearward-looking lens.
To be effective, boards must ask two different and future-focused questions:
- ‘What if …?’ What would be the implications for our business if this event occurred? Think about the consequences, rather than simply about what’s happening or has happened. As the board of the All-England Tennis Club did. I can imagine the debate at the board each year: ‘Do we really need to keep spending this money … what if it never happens?’ Fortunately for them, prudence prevailed.
- The second question is ‘So … what?’ What does this mean for our strategy? As the late Jack Welch put it: ‘Accept reality as it is, not as it was, or as you’d like it to be.’ For a vivid example of a decisive response to a dramatic change in business conditions, look no further than Auckland International Airport Ltd, which last month realised that the world of air travel had changed, possibly permanently. The board didn’t dodge the issue, or try to delude themselves about an early return to ‘normal’. Instead, the board cancelled the company’s multi-billion dollar expansion programme, including new terminals and a second runway. I’m sure it wasn’t an easy decision, and it must have hurt, but it’s hard to argue with the wisdom or the hard-nosed business logic.
- These two questions lead to a third: ‘What next?’ What are we going to do about it? That’s when you make the decisions that can change the direction, and even the fate, of your company.
When you come out of Covid-19 Lock-down and hold your next board meeting, what questions will you be asking?