Proactive Investment in Being a Good Board Member - a podcast by BDO USA, LLP

Join BDO in discussion with Christine Heckart, CEO of Scalyr and Board of Director for 6sense and Lam Research.

Key Takeaways

• In order to add value to a board, needing to first absorb what is going on at the board level

• Taking time to listen and formulate good and meaningful questions/comments

• Seeking input on your performance

• Spending time with executives within the organization

• Investing in board training in advance of being on a board; continuing your education through board roundtables/forums

• Identifying your sponsors who really know your strengths and weaknesses and can advise you

• Having a broad perspective of what diversity can mean to a board

• Understanding the flow and quality of information that is coming to the board

Transcript

This transcript has been lightly edited for clarity.

Nicole: Hello everyone and thanks so much for joining BDO's podcast series, Getting to the Boardroom. I'm Nicole Ward Parr and in this series I have the pleasure of hosting some of the most distinguished executives currently sitting on public company boards to discuss their journeys and their paths to how they got there. Today I'd like to welcome C-Suite executive and public company board member Christine Heckart. Christine brings over 30 years of experience in the technology industry, holding a variety of roles including CEO, COO, GM, President, and CMO across many industries including: SaaS, network, security, storage, music, and video at companies ranging in sizes from 50 to over 100,000 employees. Christine's worked for such iconic brands as Microsoft, Juniper Networks, Cisco and NetApp, and she's currently CEO of Scalyr, a machine data platform for engineers that operate cloud services. Christine was also recently named one of the 50 most powerful women in technology by the National Diversity Council, and a 2016 Woman of Influence by the Silicon Valley Business Journal. She's a published author and columnist and serves on several nonprofit boards and teaches at the Directors Academy, which provides board training and prepares people for their very first public board positions. A lovely segue, I think. Christine, such an impressive background and so grateful for you to be able to join us today and share a bit about your board journey with us, welcome.

Christine: Thank you, Nicole. I'm a huge fan of BDO so I'm very delighted to join you today.

Nicole: Thank you so much and with that, let's kick it off and dig in a little bit with some questions. I would love to hear what were some of the early mistakes that you made as a first-time board member? If you don't mind sharing.

Christine: Well, honestly, I feel like I probably made every mistake in the book and I'm pretty sure I came up with a few new ones on my own to add value. So, from I'm guessing minute one I started making mistakes. I'll give you a great example which I never had considered might have been a mistake until years later when I was training at Directors Academy and James White said, “Make sure you don't make this mistake” and I was like, wow I made that mistake. And what he basically said is when you walk into a board, usually boards have a seating preference, like people generally sit in the same place and if you've seen one board you've seen one board, so there's not huge generalization, but chances are people might generally sit in the same spot, and I walked in and I sat down and I was one of the first people there, and so chances are pretty darn good that I took somebody's seat. And I never even considered that for a moment until years later and I'm like, hmm, I wonder whose seat I took, and rearranged the entire board around my presence. As a first-time member, which is really naive when you think about it, and probably indicative of a level of unconscious hubris that I wouldn't have thought to say, “Hi, since this is my first board meeting, where do you suggest I sit?” That probably would have gotten some great information about the board and I probably would have not made that mistake, so that's one example. I can give you a million other very subtle stories and examples like that, but board service, especially when you're a first-time board member and I think it's, you're trying so hard to be a good board member and it's easy to make mistakes without even realizing it and they might not be grating. They might be subtle, but the more you can be very aware of your surroundings and very tuned in to the tone of what is happening around you and the other board members, and really get to know them on a personal level, the fewer mistakes you're likely to make.

Nicole: All great points and I think it probably came from a place of wanting to add value, right? I mean the mistakes, not to overly assume, but a lot of times you’re focused on “How can I add value? How can I add value?” I would love to hear your thoughts on what that even means, right? Because, I think a lot of mistakes can come from that and not necessarily knowing when to balance sitting back and listening versus when to speak, etc. And when you are trying to add value, really recognizing what that truly means and how long does it take before you really can? Any thoughts on that?

Christine: Yes, I think that's a brilliant insight and I think it's very counter intuitive or almost oxymoronic. The more you try to add value the less you probably add, and certainly I believe when I came into board service, you're trying so hard to be worthy of that chair which everybody would love to have, and be worthy of the opportunity and the investment that, that company is making in you, and you want to “add value.” And the more you try to do that, I think the less value you add, 'cause it creates in many ways exactly the wrong mindset and behaviors. And every board is different for sure, but in my super limited nine-years’ experience with Lam, I feel like the times when I truly was able to add value are the times when I was asked. And so if you kind of think about it through that perspective, I think when you show up to a board, especially the first time, you have an impression of the way board members are supposed to act, and what you're supposed to be doing there, and you're there to “add value.” And so, you either want to share an experience which frankly most people don't care about, and so you're better off not doing that again unless you're asked. Or even if you approach it like we've all been told, ask questions. But if you're asking questions kind of in a veiled attempt to “add value” through the brilliance of your question, chances are that you're again probably not adding that much value. And if you really can take the time to sit back and absorb, which I would say I didn't do a good job of at first, like later, thanks to the patience and mentoring of a lot of amazing board members at Lam I got there, but I remember I think it was Eric Brandt, who was one of my fellow board members, made a comment, several board meetings in. We all kind of joined at about the same time and we were probably 3/4 in and he said, “I think I'm just now to the point where I know enough to ask a smart question,” and I thought, wow, how many questions have I asked in the last year? And so, what that told me is probably not a single one of them was smart, because he's way smarter than I was and he's a more experienced board member than I was at that point. And he was just kind of to the point where he thought he could formulate a smart question. So, one great way to add value is to not try to do that, and to wait to be asked whether it's in the boardroom or outside of it in order to give that value.

Nicole: Super helpful. And it sounds like he was one of the folks in your universe of the boardroom that helped you to become more effective. Were there others that helped you, or where did you go to seek guidance and mentoring so that you were on that path to becoming a more effective board member?

Christine: Yes, I was so incredibly fortunate to land on a board with amazing and very seasoned board executives: Cathy Lego and Abhi Talwalkar and Mike Cannon and Eric and Steve Newberry, who was Chairman. They were patient, for one thing, and they really invested in me. Some of the things that I did over time, and I was not great about this early on, like the first year, and I became much better later, is one: I really sought input. In fact, the Lam board did a great job of doing annual board reviews and I would sit down with the chairman and the lead independent director and really pull information from them about what I could do to be a more effective board member. I also had the chairman who had been an operating executive at the company for a long time and he had put a lot of the cultural foundation of that company in place and something they called the “Lam Management System” which was really important to the way the company operated. So, I asked him to spend extra training time with me to train me on the Lam Management System in the same way he would an executive there. Then I had a much clearer lens about how that company operated and what they expected. I also had the incredible sponsorship of Cathy Lego, one of my fellow board members and some others to get plugged into board roundtables outside of my direct board experience. So BDO runs a fabulous board roundtable here in Silicon Valley. Hitesh Shah started it. He plugged me into that. Once a quarter, I have a chance to meet with other board members and get training and enrichment. Cathy Lego started a board roundtable with 15 members. We rotate houses and go to different peoples’ houses and have a set agenda and a topic once a quarter and so through those extra developmental efforts I was able to learn from experiences of boards beyond the board I was on and that was amazingly, and still for me is amazingly, helpful.

Nicole: That's fantastic and thank you for the BDO plug by the way. Unsolicited everyone but thank you so much and I think your obviously, your voracious quest, and innate curiosity about how to be effective, how to learn, how to get mentoring, and to put yourself in a space surrounded by people that could support that process for you was, It sounds like, a great part of your path and one that I think everyone can learn from. That's great, and so on that note what advice would you give to someone who is looking for their first board role? What would that look like?

Christine: Boards are really tough to land. I mean any first thing is tough. My son just graduated from college. Finding that first job is tough, right? Getting that first promotion for the executive suite is tough.

Nicole: I vaguely remember that, Christine.

Christine: Right? Exactly, me too. Like back when dirt was young. Becoming a CEO for the first time, for me last year, super tough. People have to take a bet on you, and it's the same with board training. So, what you need more than anything else is, one: you need a lot of luck. And let's just not be naive about that. A big part of success for any of us at any time in our life is just luck. 99% luck, 1% what you make of it. Then you better be ready to make something of it when that good fortune comes along. You need sponsors and there are lots of places that you can find your sponsors. People who you know who sit on boards are obviously the best place 'cause they get the deal flow. Companies like BDO, or any company who deals with a lot of boards and is plugged into a lot of board members and knows you and your strength are a great source of sponsorship. And anybody else in your career. I mean, if you're looking for a board, it will take probably three to five years to get your first board. I'm pulling that out of the air, but from what I understand it's a long process. You have to start telling everybody you know that you're interested, and you have to start preparing yourself. And if you can find people who are very active sponsors, it's something that I personally spend a lot of my own time on now because I am very passionate about helping people, especially people of diversity, but really, anybody who's worthy and has a lot of value to add to help them land that first public board seat. So, I spend a lot of my own personal time trying to help women and engineering executives get on boards. And I run a board training class once a year for these people. In fact, you guys often participate in that, but wherever you can find a source of sponsorship, and probably more than one. If you want on a board, it's just like finding a job, you have to put a lot of effort into it and you have to meet and rub elbows and shake hands and get to know people on a personal level and give them a chance to know you and really make an investment: investment in yourself and getting ready and board trained. I wish I would have had board training before I sat on a board. I may not have made at least as many mistakes. I'm sure I would have figured out a few to make, but I could have saved Lam and my fellow board members a lot of aggravation had I just invested in my own board training before I took that first seat. And then you gotta get out there and really ask for it.

Nicole: Takeaways there you said, sponsorship, essential, working your network. Nonprofit board? Is that something that you saw as good experience that prepared you or not so much? Because I know that you have been and are on several nonprofit boards. Was that something that helped?

Christine: For me it wasn't, but I do a board training class. I teach at Directors Academy once a year and then I put on board training for engineering executives once a year. And so, I go to that training multiple times a year as a result, and what I have the opportunity to do is then hear all these other sitting public board members and their experiences. And I learn an enormous amount every time I do this, and one thing I've learned is there are so many paths into the boardroom. And there are people who believe and who have had success by sitting on nonprofits and/or private boards of some sort and using that as a stepping stone. Where it seems to be the most useful, is when that nonprofit board consists of members who also sit on public boards, because then they become your sponsor. It's like, oh, I've seen how you operate in a board setting and I think you would be good for this other board that I either sit on or this person that I know about, because so much of board activity, unfortunately, still is who you know and who knows you, and getting in that deal flow.

Nicole: That is great. That's a great tactic, like you say, really evaluating that nonprofit board for what the board members are like and seeing that as potential leverage, and like you say that sponsorship. That's fantastic. And so, you've mentioned a couple of times, diversity in the board and your own commitment to that as you sponsor others. What is your philosophy around board diversity and how, in your opinion, has the boardroom changed? How is it changing?

Christine: One thing that I don't resonate super strongly with is a narrow interpretation of the word diversity. And by that, I mean when people say “diversity,” and what they really mean is: we need a female on the board, or they say diversity, and we mean: a person of color on the board. I do think those are enormously important, by the way, I'm not minimizing the importance of that in any way and I don't believe that, that really makes a diverse board. When boards are made up primarily of people who have had the same entitled upbringing and experience i.e. CEOs and CFOs and that is 70 to 100% of the make-up of the board, then they could be equally balanced, male, female and people of color and caucasian, and in my mind you still would only have a partially diverse board. So, what I look for and what I advocate for is diversity of titles and experiences. So people who represent both the customer base: where they are in the world, who they are, and/or the titles in the company that you get people who came up through a technical background, a marketing background, a sales background, a finance background, an engineering or HR background, whatever the set of experiences are. If half of the board has those diverse experiences and the other half is CEOs and CFOs, then you probably will get other kinds of diversity as a byproduct and you will have a more valuable and diverse set of perspectives around the table than if you have people who have all had the same title, but maybe have different external packaging which matters less.

Nicole: Absolutely. It's an excellent distinction. Fantastic. And last question for you about innovation in the boardroom, and how you are innovating in the boardroom. I would love to hear more about that. Have you done things that you felt were innovative or do you feel that, that's a priority for someone who's on a board?

Christine: I don't feel like I have done something innovative in the context of a boardroom, and I've done plenty of things that I consider innovative, and I have helped, but certainly not lead transformation in the boardroom. And I, as a first-time board member, I don't think I would have had the credibility to lead much of an innovation at my previous boards and I don't know how quite to interpret the word innovation in a board. But what I believe fundamentally in, is good governance in the on-going, striving, the continual striving for better, more holistic governance within the board. I do think boards are under more pressure than ever before, not just some things like diversity, but to answer the question, what should we know? And how can we know it? And things like Wells Fargo I think have brought that to the forefront. I think Wells Fargo made everybody question: What is a board's role in culture? What should it know about the culture and how can it know that? Because so often the information flow into the boardroom is quite controlled. So how do you find these things out? And if there is innovation to happen, then that innovation in my mind is best spent around this governance topic and specifically around the accurate and holistic flow of information from a company into the boardroom, in a way that's productive, 'cause it could be very unproductive as well. So how do you have a healthy balance, and a healthy flow of information so that the board can be effective in its governance role?

Nicole: Right. Effective governance. And there's so many competing priorities, obviously, that a board faces, right? How does that stack rank against those? Right? Very interesting, great perspectives.

Anything else Christine, that you'd like to share that you think would be meaningful for either current board members or aspiring board members to know?

Christine: You know, I think I'll share one other story. It's kind of a, it's a mistake and a learning, but it's something that definitely stuck with me. Over the course of my own board service one of the things that I stumbled on, and I thought I was stumbling on it, not a survival tactic, because I never felt threatened…I loved my board service, but it became an adaptive response to how to effectively influence in the board. My experience was very diverse, and I would ask questions that later, one of the executives told me, “It's not that we didn't want to answer your question, it's that we really didn't understand it.” So, I would ask questions around monetization of data: How are we thinking about monetizing our data? Or questions around the move to SaaS very early in the evolution of that movement. I was making an attempt, a poor attempt, to add value and I was making an attempt to influence, and to influence strategy, and I was doing it in the boardroom by asking questions, and I wasn't being terribly effective, and what I discovered is, I became more effective in that influence by having dinners and conversations with people on the board and in the executive team outside of the board meeting, and to really have a conversation. “Well I'm curious about this, how do we think about this? And are we doing this here? This there? Why not?” And so, a lot of my time investment ended up happening outside of the boardroom. And like I said, I thought that was just because within the context of the boardroom I always considered myself kind of the least significant bit in the 8-bit byte, because I didn't have the semi-conductor experience that everybody else had, and I didn't have the seasoned board experience everybody else had. I was there just to be a sponge and learn. And so, it was kind of an adaptive response for me. And later again at one of my many training courses that I was teaching at, but I was also sitting in the class to listen and learn from others. A very seasoned chairman said that the way he influenced in the boardroom was to not do it in the boardroom, to do it outside of the boardroom. And he described this process of meeting with people and having breakfast and lunch and dinners and conversations throughout the year, and not waiting for the board. And, in fact, not relying on the board meeting to introduce ideas or to try to influence. And I thought, “Oh my God, that's what I've been doing!”. It was an adaptive response and here's somebody that's chairman of the board of several different companies and this is his practice. It's like, maybe this is the way everybody is doing it and that's why trying to do it in the boardroom is really not even that efficient. It's all these very subtle things that nobody writes down in a handbook, actually that would a be great thing to have, a handbook for how to be an effective board member.

Nicole: “How to be a Board Member for Dummies,” or something?

Christine: Right! Exactly. If somebody would just write . . . that is probably out there. And if I just go look for it, I could've been a more effective board member from day one.

Nicole: Not at all. I think your willingness to share some of the stumbles and/or mistakes, that is so beneficial and helpful to anyone who's trying to navigate getting there, right? And there's, probably a crass adage but I'll share it, that my great grandmother used to say and that was, “Poop makes great fertilizer.” And I think as tacky as that may sound, if we choose to look at those mistakes as real opportunities and the growth that comes from those, then it's a win. So, thank you for your willingness to share some of those, for everyone that's listening to learn and benefit from, and I can't thank you enough for your time, Christine. This has been invaluable and BDO thanks you so much for your willingness to share. And, certainly, we look forward to staying in touch and having you on again in the future.

Christine: Thank you so much. I, first of all, I wish I would have met your grandmother. I feel like I love her adage. I should be growing like a bad weed at this point and delightful to have been part of your podcast.

Nicole: Wonderful, thank you so much Christine. Appreciate it. Have a great rest of your afternoon.

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