Guest post by Michael Herlihy, formerly general counsel at ICI and Smiths Group plc
Herlihy: GCs need to name the elephant in the room
It’s a year since you were promoted to be general counsel and a member of the executive team. The tricky topic for today is going to be Project Wizard. The beta version wasn’t due until next spring, but Madeline – the new CEO – wants it ready for early New Year.
She says we are too slow to market and that “being first to invent counts for nothing if you’re last to the customer”. She’s not wrong, but you doubt that the new programme software she’s introducing is going to resolve the long-running feud between the group’s two R&D centres, which are sharing responsibility for Wizard.
The US lab was acquired 10 years ago but has never been properly integrated with the original UK operation. And whilst the US runs with a kind of ham-fisted military precision, the UK lab still honours the spirit of the gifted amateur. So, basically, the two sides don’t talk to each other.
Is anyone going to explain this to the new CEO? Well, not you, obviously. First, she is really smart, so can probably work it out for herself. And there are plenty of people more senior than you in the room who you don’t expect to be saying anything about it.
You’ve also recently heard that there may be an issue on Wizard with some third-party IP that’s only just surfaced – when you tried to mention it earlier in the week, Madeline was pretty short with you: “Don’t you people run searches before you ‘green-light’ projects?” Which, of course, you do but this issue didn’t show up.
Although it will probably be fine, it doesn’t feel like the time to be putting your head above the parapet when she’s not showing much interest in the legal department but ‘re-engineering’ most other functions.
At the same time, you can’t help wondering… she did say she wants you to work as a team and you’re supposed to be independent – perhaps she’d appreciate you speaking up and realise you have more to offer than just technical legal advice?
But she might be narked. And your R&D colleagues definitely would.
So best to sit tight.
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Cowardly or politically savvy? Or maybe no dilemma at all if you think the only job of an in-house counsel is to give legal advice? (Spoiler alert: in my view, that’s the equivalent of saying the CFO is just there to add up the numbers.)
Of course, the issue here isn’t a legal one, but, for me, one of the general counsel’s jobs is to say the things others are finding it hard to say – to ‘name the elephant in the room’.
As a lawyer, I could never quite shut down the voice in my head telling me I had a responsibility to tell people – even scary CEOs – the inconvenient truths they didn’t want to hear but which someone needed to tell them.
The problem is that I’m no braver than anyone else and didn’t want to upset the boss any more than they did.
So, faced with this dilemma, I did what many of us do. I found something to say which allowed me to go home telling myself ‘I had put my concerns on the table’ whilst expressing them in such a way as to deliberately make it easy for the boss/others who wouldn’t like what I wanted to say to ignore me.
So here I might have tried: “The new software sounds great, Madeline, but when you get a chance it might be worth spending a bit of time with the R&D teams – they have very different legacies and cultures, you know.”
I have sort of made my point. But no one need be troubled by it because I’ve also really invited everyone to walk straight past it. Which they will.
This story is invented, though reflective of dozens of real-life examples I witnessed. In my memoir, Taking Down the Tents, I tell the story of one of those – a board meeting at which everyone else wanted to pursue a ‘high-leverage’ financing strategy for a major acquisition that was every bit as daft and doomed as the decision here to expedite Project Wizard without resolving the conflict between the two R&D groups.
The view I offered: “We shouldn’t underestimate how difficult the stringent cost-control required will be for people brought up in the company’s previously cash-entitled culture.”
In other words: “Even though I think what you’re planning is mad, I’m not going to make a fuss about it, but would like to be able to tell myself that I registered my concerns.”
And what, exactly, was the value of that?
Michael Herlihy was formerly general counsel at ICI and Smiths Group plc and an independent director at Imperial Brands and the John Lewis Partnership. He is the co-writer and producer of the film, The Testing Point – a drama aimed at helping people overcome the barriers that hold them back from voicing concerns at critical moments and in high-pressure environments – and author of a recently published business memoir, Taking Down the Tents.
Very nice piece.