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The Strategic Business Counsel: The ‘8C’ Model

What is the ideal twenty-first century GC like? We believe the best term for them is ‘strategic business counsel’. Over the following pages we set out a model which attempts to visualise the factors that combine to make strategic business counsel capable of operating at the highest level within their organisation.

Our model has been developed through hundreds of conversations with GCs in a wide variety of jurisdictions. Some parts of it may resonate with you more than others. It would be wrong to underestimate the impact of local conditions, just as particular employers, and the characters of GCs themselves, can lead to very different situations. Nevertheless, we believe that – as our several results show – GCs around the world have a great deal in common, and that each of the ‘8Cs’ in the model is an important aspect of strategic business counsel life for the vast majority of them.

In each case, we’ve tried to explain what’s significant for the GC and to follow our explanation with some thought-provoking questions.

Some of our previous GC reports have included tools for GCs seeking to improve aspects of their performance. This is not a tool as such, but we hope it will help GCs who are thinking about what they do and how they do it.

One challenge is that some of these areas are more within the GC’s control than others. In some cases, the biggest difficulty for the GC may be finding the right modus operandi to achieve both the company’s goals and their own.

Our model shows what helps a GC to move up the Value Pyramid. A GC who scores highly in this model while being on a low level of the GC pyramid – or who judges themselves to be at the top of the pyramid but is a low achiever in terms of the 8C model – will want to think about the reasons for that disconnect. Are they in the wrong role? Is their opinion of themselves not matched by what others think? Or have they so far succeeded while maintaining a narrow focus – and, if so, do they now have an opportunity to spread their wings?

We know that not all GCs face the same problems and challenges – although most of the GCs who have seen this model, or earlier versions of it, have been enthusiastic. But we hope our ‘8Cs’ will, at the very least, provide the material for some fruitful reflection and discussion.

Charisma

For the ancient Greeks, charisma was – literally – a gift from the gods. For many people today it retains that aura of mystery. How do you – how can you – acquire charisma?

In some ways you can’t. Charisma is an intensely personal thing. We each make our own, using the ingredients we’re given – or born with, if you like – but also using other ingredients we find for ourselves.

That personal aspect of charisma might be thought of as ‘authenticity’. It’s become a truism that the problem with authenticity is how easy it is to fake. But that’s too glib. You can’t fake it forever; people are smart enough to see what’s inauthentic if they’re exposed to it for any length of time.

Authenticity also means focus. It means bringing yourself completely into a situation. And being charismatic involves leveraging that authenticity with other attributes and skills. A few of those attributes may be innate, but most of them can be acquired. You can learn how to improve body language, speaking style and a host of other attributes. As our third GC report showed, you can actually learn to be influential. A key part of this is embracing and stepping into the leadership aspects of the GC role where attributes such as charisma and authenticity come to the fore, as Salomon Vaie of Corporación Multi Inversiones in Colombia told us: "In my experience, trust is something that you have to earn."

Charisma can be misused. It has been an important tool for leaders down the ages, but also for demagogues. Some people use this fact to justify not thinking about their own charisma. In the end, that’s a self-defeating approach: your charisma is an issue, whether you like it or not. It’s a key component of influence and leadership. You owe it to yourself to think about how charisma works, and to understand and build your own charisma, as part of your personal brand. Developing charisma and leadership skills provides benefits not only to the GC but also for their team and assists the entire function in gaining influence.

Questions

  • How much do you influence people when you’re just ‘being yourself’?
  • Are you a good communicator?
  • How do other people see you?
  • Would you be good at sales?
  • Can you present yourself more positively without being inauthentic? If you can, why don’t you?
  • Have you taken all the available opportunities to learn how to enhance your charisma?
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Change

Change is part of business life, both at the corporate level and within the legal department. The key question for the GC is: will you drive change, or will you be driven by it? Do you reshape your team because of demands imposed from above? Or do you take the initiative in looking at how to improve processes and reshape functions? Are you involved in planning the change that will result from corporate evolution, or are you left to sort it out afterwards?

The most obvious area of change at the moment is technology. If even half the predictions we’re currently hearing about artificial intelligence, automation and robotics come true, then many companies and business models will look hugely different in just a few years’ time.

"For GCs and for legal counsel at law firms, for the legal profession in general, the years to come are going to be very challenging. Digital transformation is happening at a very fast pace, than changes to regulate the digitalisation of our economy."

And if you’re not thinking about how technology can change the way legal services are delivered, you’re missing a very important trick. Juan Antonio Castro at InterCorp Group highlighted that this fact is also very pertinent for our conversation.

But the march of technology shouldn’t distract the GC from other aspects of change. There is always scope to improve the way things are done within the legal department. There will always be new, external pressures on the body corporate, ranging from new questions of compliance to the challenges of new markets and pressure from new competitors. A GC who wants to be a leader needs to own change. That’s certainly something that our interviewees recognised. Carlos Hernan Paz Moquera, at Riopaila Castilla, stated:

"Lawyers are obligated to make the legal function more innovative for the rest of the business."

Questions

  • How proactive are you in seeking ways to improve what you do?
  • Are you abreast of developments in your industry or sector, as well as in the law and legal services?
  • Are you using technology to increase your contribution to the business?
  • How innovative are you? Is there something you can do that would be genuinely good and that no GC has previously done?
  • What can you do to facilitate change for others?
  • Do you understand change management?
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Culture

As well as legal risk, a company faces reputational risk every day, in areas ranging from employee engagement and social responsibility, through tax planning and financial management, to supply chain issues and environmental impact. The larger and more international the company, the greater the potential pitfalls and problems appear to be. Priorities may be slightly different in less high-profile companies – but even there, reputational damage can easily lead to a loss of business, while other behaviours may lead to fines, disbarment or even jail.

Companies have rules to deal with these things (and the GC should make sure they’re as good as possible), but no rule-based system will ever be able to de-risk every aspect of corporate activity. Ultimately, while good corporate governance may be based in codes and committees, it cannot depend on them. Instead, it has to rely on its corporate culture. A company needs a culture in which its staff are aware of ethical hazards and exercise good judgement in avoiding them – with a GC taking the lead in fostering that awareness and developing that judgement.

Carlos Hernan Paz Moquera at Riopaila Castilla asserts that: "Without a culture of ethics you have nothing."

Culture is an area where the GC should be front and centre. It works in different ways in different organisations – public companies, private companies, family companies, charities – but there’s no organisation that doesn’t have its own culture, and that culture is an important determinant of whether it succeeds or fails. In the phrase famously attributed to Peter Drucker, ‘culture eats strategy for breakfast’.

There is no ‘approved’ textbook method for a GC to drive an organisation’s culture. Part of the challenge for each GC is working out the best way to do it. But a good GC in a good company will be able to harness plenty of c-level support and will be able to draw on a range of resources and strategies to succeed.

Questions

  • How would you describe your corporate culture?
  • Is it appropriate?
  • Does your company have sub-cultures (in the boardroom, in departments, in foreign offices)?
  • Do you currently seek to influence corporate culture? Are you effective? How do you know?
  • Can you raise difficult issues at the board level without losing the support of management in
    other areas?
  • Have you got an agreed strategy or programme
    for corporate culture?
  • If this isn’t part of your role at the moment,
    how can you make it so?
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Collaboration

Collaboration can mean very different things for GCs in different organisations. For a GC in a smaller company, perhaps with a single assistant, it may be very much a matter of personal relationships. For a GC in a large multinational company, the question is much more likely to be one of building and maintaining a quality team, and ensuring that the team is empowered to work well, and that the members of the team, in turn, collaborate effectively with other people in the organisation. We have not said much about a GC’s team in this report, but it is clear that, unless the team as well as the GC is influential and enjoys respect and good working relationships with colleagues in other parts of the business, then the team will not be able to achieve its goals – and so the GC will not achieve theirs.

Our fourth GC report looked at how GCs manage and engage talent. But – beyond considering questions of influence – we have not looked in detail at GCs’ working styles. Nevertheless, this is a crucial aspect of becoming a successful GC. Not because there’s a ‘right’ style, but because your approach has to be effective. If you’re not getting as much as you can out of your team, then your organisation is not getting as much as it should out of you. Empowering the team also becomes a story of empowering the whole business and making legal part of the everyday decision-making process. This creates greater efficiencies and value for the business but also goes toward creating a situation where there is collaborative effort towards creating an ethical culture by everyone. The GCs who we interviewed recognised the importance of empowering their people through challenging work, key performance indicators and close personal relationships. For instance, Gonzalo Smith Ferrer of Falabella explained that: "The win / play / show philosophy seeks to empower people within the business and equip them to recognise when they should handover some control to others. This strategy of shaping independent behaviours becomes independent of the individual lawyers so that other company employees have the tools to carry out their roles and maximise their talents."

The truly effective GC will also be a role model to the next generation of in-house lawyers. And a GC who moulds a highly effective in-house team, with lawyers who embrace change and development, will leave an enormously valuable legacy when the time comes for him to move on, with a high-performance team that can function even without his leadership. As one GC said: "My leadership style seeks to motivate the team by providing autonomy and setting challenges."

Questions

  • How well do you work with the people around you?
  • Do people like having you as a boss? If not, why not?
  • Are you consistent in your messages and the way you present yourself to your team?
  • Have you got a structured programme for talent management?
  • Does your model for talent management reflect the maturity of the market (or markets) in which you’re recruiting?
  • Is there a ‘value gap’ between what your team should be capable of and what they actually achieve? And if you believe there is, have you got a system
    of metrics or indicators to help you assess and deal with it?
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Connections

As a GC, your most important professional connections are within your company. Once, those might have been the only ones that mattered to you. But we live in a connected age. We ‘know’ more people than would have seemed possible a few years ago. Some of our most important business relationships may be with people we have yet to meet face-to-face. On social media, we discover that we’re linked to people we’ve never heard of. What does this mean for the GC?

Essentially, it’s a huge opportunity. One problem the in-house lawyer used to have was isolation. Now it’s the easiest thing in the world to reach out to other GCs.

And sharing information and ideas – whether in formal settings such as a policy forum or professional association or in less formal (real or virtual) social settings – can be hugely valuable. For example, at InterCorp, Juan Antonio Castro has created a roundtable initiative where the company brings together a range of lawyers from different industries to discuss the impact of digital change, an area that’s particularly rich for sharing ideas and experience as the law and regulations are still developing.

Why would a GC not wish to take advantage of all that’s on offer, be it mentoring, the exchange of knowledge and experience, access to opportunities, a sounding-board for new ideas, or even just a sympathetic ear?

Nor do connections outside the company have to be restricted to the in-house legal community. Inspirational GCs have become opinion formers and influencers in areas such as equal rights, social justice and corporate responsibility. Others have taken on roles such as non-executive directorships or trusteeships or become mentors.

Other than in extreme circumstances – typically, bad ones – it’s not the GC’s job to be the face of his company. But the GC is always a corporate ambassador, and a top-class GC is also a top-class ambassador.

One of your most valuable assets as a GC is time. You will, of course, never have enough of it, but what you choose to do with it is crucial. Lawyers are traditionally task-focused, but many effective GCs have discovered that – while tasks can be deferred, delegated or outsourced – the uniquely personal investment of time in building relationships, both inside and outside your company, may help to achieve progress, understanding and influence in a way that nothing else will.

Questions

  • Are you a good networker, both within and beyond your company? If not, can you improve your networking skills?
  • Do you invest time in connecting with people?
  • Do you have strong relationships with the key people in your company?
  • Some people say the GC is the best- connected person in the business, as they are involved in every aspect of it. Is that true for you? And if so, do you take full advantage of it?
  • Are you active on social media (not just with family / friends)?
  • Are you a ‘thought leader’?
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Credibility

Credibility is a must for a GC, and all GCs seek it. Gonzalo Smith Ferrer identified this as a defining characteristic of his role: "Working in-house is about competencies and aptitude. The main role of the legal team is to shape conduct; to encapsulate the values and the purpose of the company."

However, there are traps along the way. In particular, some people gain a sort of credibility by being part of a group, whose members regard each other as inherently more credible than outsiders. Groups of all sorts – including boards and executive teams – can develop that sort of insularity. But such credibility is poison for a GC because, ultimately, a key component of a GC’s credibility is their independence.

A truly credible GC is one who can pull off the difficult trick of being wholly ‘on the team’ and yet completely objective. As Rocio Arredondo of HP Inc told us, the credibility the legal department has built across the business is based on trust. She describes that there is “understanding from our internal clients that we are their partners. They know we have their backs.”

As well as thinking about gaining credibility, GCs have to be aware of the ways in which credibility can be lost. These may include things entirely outside a GC’s control: for example, changes in management may mean that carefully cultivated relationships become redundant overnight. But there are other negative factors – such as weak influencing skills and poor performance by the legal team – that the GC should be able to address.

Questions

  • Do you have as much credibility as you’d wish at all levels in your organisation? If not, why?
  • How much of your credibility comes from your title, how much from your corporate relationships, how much from your record, how much from your knowledge and abilities, and how much from your team? What other factors are important?
  • Are you financially numerate enough to fully understand management and financial accounts?
  • Are you able to contribute to the conversation on wider commercial issues?
  • Would you feel comfortable as a panel member on a TV current affairs programme?
  • How credible is your team?
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Contribution

The GC will inevitably be judged by their contribution to the business, and by the contribution of his team. It’s something we’ve covered extensively in our other GC reports, so we won’t say much more about it here – except to add that, while the contribution of a good GC will always greatly exceed what can be measured, there will always be elements of any GC’s performance (and the performance of anyone else – internal or external – providing legal services) that can, in one way or another, be captured as data.

As Rafael Cox of CMPC points out: "I believe that I am truly operating at a strategic level, either because I have managed to build an approach to demonstrate legal value or because circumstances have given me the opportunity to demonstrate the real value that in-house counsel can bring to the business."

There are times when measurement seems less relevant. Crisis management is a good example. If a GC successfully steers a company through an existential crisis, the chances are no-one will really care about measuring his performance while he does it.

But the question for most GCs is more likely to be: how do I show that my performance, and the performance of my team are helping our company to avoid such crises? Given the continued scrutiny from regulators, this proactive stance is increasingly significant. In daily life, the skills and achievement involved in keeping the corporate wagon on the road may go unappreciated.

Questions

  • Do you use KPIs? If not, how do you measure performance and demonstrate your contribution?
  • If you do have KPIs, how could you make them more effective?
  • Have you integrated KPIs with your talent management programme (if you have one)?
  • How do you ensure you get value from outside resources?
  • What single thing would most greatly increase your contribution to your organisation? And what single thing would most easily increase your contribution?
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Counsellor

The GC needs to be, absolutely, a businessperson. But this is not the GC’s key differentiator, or put in another way, unique selling point (USP). However good you are with numbers (and you do need to be good with numbers these days), and however on point you may be in relation to strategy, and however commercial your outlook, you will almost certainly never be top dog. There will be other people in your organisation who are better at these things and more involved with their function as drivers of corporate activity.

Your USP is your training and experience as a lawyer. Not just advising on what is legal and what’s not – it’s now well understood that a lot of what a GC does is about positive commercial problem-solving in a legal context. And ‘the law’ has grown to cover, in many cases, a complex ecosystem of regulation and compliance. But it’s clearer than ever that ‘the law’ also covers what might once have been called ‘moral law’ and is now more likely to be called ‘ethics’ or ‘corporate responsibility’.

It’s become a truism that GCs have to be commercial. But for the strategic business counsel, that means influencing and facilitating highly commercial behaviour within a responsible context. It’s about retaining the independence which enables you to offer genuinely valuable advice and asking the right questions, even when they aren’t easy questions. A wise GC ensures that the efforts of their team in this area are dependent on trust and showing you understand the business.

Juan Luis Rodríguez Rivero, GC at Accenture, illustrates the importance of GCs operating in a counsellor role based on building a relationship of trust with the business: "In my experience, trust is something that you have to earn."

A GC who can bring not only legal insight and commercial awareness, but also ethical judgement and even emotional intelligence to bear on a situation really does have the potential to assume a senior leadership role in a company.

Questions

  • Do you have the right legal insight, commercial awareness, ethical judgement and emotional intelligence? If not, how can you gain them?
  • Are you well positioned to lead on ethics and values within your organisation? If not, what needs to change?
  • Do you understand all the obstacles to compliance and corporate responsibility across your company?
  • Are you a confident businessperson, rather than just a confident lawyer?
  • Do you have the ‘soft skills’ that the board-level counsellor needs?
  • Do you habitually ‘speak truth to power’?
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