By Christine Schaefer
George Benson is a longtime business professor and former dean of the Terry College of Business at the University of Georgia and the Rutgers Business School at Rutgers University in New Jersey. Most recently, he was president of the College of Charleston in South Carolina. He is currently chair of the Foundation for the Malcolm Baldrige National Quality Award. From 1997 to 1999, he was a judge for the Baldrige Award; and from 2005 to 2007, he chaired the Baldrige Program’s Board of Overseers. While serving in that role, he helped Baldrige staff members develop the resource A Baldrige Perspective for the Board of Directors. At the time, Benson was also a director of two public companies and one private company. Having frequently referred to the Baldrige Criteria for Performance Excellence in preparing for board meetings, he thought that other directors could also benefit from its use, he said recently.
In an interview for Blogrige, Benson shared examples of several ways that corporate directors can benefit from using the Baldrige Excellence Framework (which includes the Baldrige Criteria for Performance Excellence) today. In doing so, he also shared the story behind an award he recently received for guiding and improving a company’s leadership succession process while he served as the lead director of its board.
Benson first pointed out that the Organizational Profile (the preface to the Baldrige Criteria) can be used even to determine whether or not to serve on a particular board of directors. “In evaluating whether to join a particular board, a prospective director can use the questions in the Organizational Profile to help understand the company’s governance system, regulatory environment, and strategic challenges, among other things,” said Benson. “The Organizational Profile can also be used in the orientation and training of new directors.”
Benson next underlined how the Baldrige Criteria are relevant and valuable to directors’ roles in monitoring and evaluating an organization’s performance. “Directors are charged with monitoring and overseeing management and helping to shape the company’s strategic initiatives,” he said. “None of that can be done without ongoing assessments of management and its plans, budgets, and key results—in other words, without assessing the performance of the company. The Baldrige Criteria provides performance-related questions that directors can use in doing their frequent assessments of performance excellence.”
Benson then noted that he continues to regularly use the Baldrige Criteria in preparing for board meetings. “The Criteria guide my analysis of the 200 to 400 pages of board-book materials that I must understand and evaluate for each board meeting,” he said. “Further, the Criteria and the underlying Core Values and Concepts suggest and help me to formulate questions for management and the board.”
In December 2015, Atlanta Business Chronicle awarded Benson its Outstanding Directors Award for his work as a director of Primerica, Inc., a large financial services marketing firm based in Duluth, Georgia. Benson received the award for his role in the company’s recent CEO succession process. He described that work—and how it related to and benefited from the Baldrige framework—as follows.
“As lead director, I was responsible for overseeing and guiding the process,” Benson explained. “In 2013 the co-CEOs indicated to the board that it was time for them to step down. This triggered a roughly two-year succession process. Application of the systems-thinking perspective embodied in the Baldrige Criteria helped our team to identify the diverse mix of complexities the succession process would need to deal with. It quickly became clear that several of those complexities were quite significant. And the identification of the next CEO was the least of our problems—he was identified long ago by the board’s ongoing succession process.”
Benson explained that the company was replacing two highly visible, long-serving co-CEOs with a single internal candidate. The change in leadership and leadership structure required Benson and others to secure the support of the company’s top investors as well as its 100,000 sales representatives and 2,000 employees in the United States and Canada.
“The co-CEOs had run the business for the past 15 years and had navigated the company successfully through the Great Recession, and had taken the company public in 2010,” said Benson. “Furthermore, the co-CEOs had built deep relationships with the huge sales force, as well as the top field leaders, whose support was critical to the business. Also, the investor base had become very comfortable with both the ‘co’ structure and these particular executives. The co-CEOs were essentially beloved father figures.”
According to Benson, another challenging issue was that the elevation of an internal candidate to CEO set in motion a number of other changes in the executive ranks that required major changes in the day-to-day operation of the company. Moreover, the company faced the uncertainties associated with the new CEO not having prior experience as a public company CEO. “These complicating factors and the company’s negative experiences with a CEO succession in the 1990s weighed heavily on the board,” said Benson, “Consequently, all aspects of the succession had to be carefully managed.
Yet Benson found he could leverage the foundational values and concepts of the Baldrige Excellence Framework to surmount those challenges. “Nearly all the core values and concepts that underlie the Baldrige Criteria were relevant during the succession process,” said Benson. “But paramount were focus on success, valuing people (especially workforce members and partners), and delivering value and results. We kept those three in mind during every step of process. This kept us focused and on point.”
Benson added that a couple of the above-noted complexities forced his board to “dig deeper into the day-to-day operation of the company than the board would normally go.” But he found that a review of the Baldrige Criteria, particularly categories 5 and 6 (“Workforce” and “Operations,” respectively) served him well as he looked at the work processes and the personnel needs of a leadership structure with just one CEO. “While the Baldrige Criteria was designed primarily for the assessment of performance, I also find it a useful refresher on both basic and cutting-edge management practice,” said Benson
The Plan of Action
Benson summarized his team’s actions to help the company as follows.
“I organized and juggled several parallel work streams, including (a) planning communications with employees, the field (i.e., our sales reps), and the public; (b) negotiating a departure package and amended agreements for the co-CEOs (who would be leaving before their contract terms expired in order to avoid possible major distractions during the July 2015 field convention in the Georgia Dome); (c) preparing the new CEO for the CEO role and hiring an executive coach; (d) overseeing the promotion of a new president to work with the new CEO; (e) addressing differing opinions among the various board members relating to the transition; and (f) identifying a new general counsel because the current general counsel was being promoted to president. I worked closely with the chairs of the Compensation and Audit Committees and the corporate secretary to ensure that all work streams moved forward and created value.”
“The CEO succession announcement had to be kept ‘under wraps’ because many field leaders held Primerica stock and the leadership change was viewed to be material. A previously scheduled field meeting required that the announcement take place in January 2015. I worked throughout the December holidays to ensure that all the pieces fell into place for a first-of-the-year kick-off. Following the announcement, I monitored the transition, recognizing the announcement was just one aspect of the project.”
A Success Story to Replicate
The final results of the CEO succession process “far exceeded the board’s expectations,” said Benson. He added that the board declared 2015 the company’s strongest since going public in 2010” and that his board continues to evaluate the outcome of the process today. “The greatest beneficiaries are its now-106,000-strong sales force and their millions of middle-class customers. And working with the new CEO, we have already put in place an emergency succession plan should an accident or health problem impact the new CEO,” he said.
“In my opinion, the results we achieved further confirm the value of the Baldrige Excellence Framework. Whether a company is consulting the Criteria to ensure a successful leadership transition or a successful strategic planning process, the Criteria provide the systems perspective needed to fully understand the tasks at hand and their implications for the entire organization. The Baldrige Framework—including the 11 core values and the Criteria for Performance Excellence—is a valuable leadership resource for directors and officers of both for-profit and nonprofit organizations.”
In sum, Benson stressed how other corporate directors and leaders alike can similarly benefit from adopting the Baldrige framework:
“Overall, in leading the succession process for the board, my role was to set performance expectations, to build a consensus on the board and to serve as a mediator, a motivator, a sounding board, and a critic of the process. Those are all things that senior leaders would be expected to do and for which they would be evaluated under category 1 of the Baldrige Criteria.”