How to deal with pressure in the boardroom

Every team performs better in a crisis if they have trained and rehearsed the scenario. This holds true whether the emergency takes place in a hospital or a boardroom, writes Dr William Davies GAICD.

It has been long known that a team or group will perform better under pressure if they have been trained in and practised the skills involved in managing the situation. The Greek poet Archilochus of Paros is said to have written in c650 BCE that in times of crisis, “We do not rise to the level of our expectations, we fall to the level of our training.”

This is the reason hospital emergency department resuscitation teams regularly practise resuscitation scenarios — to limit error and deliver timely, appropriate care to the critically ill. It is also why a well-functioning board should undergo crisis management training and regularly review, practise and revise the company crisis management plan.

CLT and the dual process model

Cognitive load theory (CLT) suggests the human brain can only process a small amount of new information at once, but can process large amounts of stored information. While new information must be processed in working memory, which has limited capacity and duration, that information is then transferred for storage in long-term memory — in “schema”, with no limits on capacity or duration. Once information is stored in long-term memory, it can be rapidly transferred back into working memory to generate appropriate action with minimal conscious effort.

Cognitive overload may occur when an individual under pressure is faced with too much new information to make complex decisions.

In his book Thinking, Fast and Slow, economics Nobel laureate Daniel Kahneman described a “dual process model” that divides thinking and decision-making into two models. System I is characterised by “heuristics”, fast judgements based on intuition and experience. System II is slower, more analytical and relies on a series of logical steps in order to reach a decision.

The capacity of the working memory is limited, and in situations when large amounts of new external information are encountered, it’s possible for the working memory to be overcome. Heuristics avoid this by creating mental shortcuts and utilising very little long-term memory.

Cognitive load is also dependent on the emotional state of the decision-maker. It’s divided into three basic elements: intrinsic, extraneous and germane. Intrinsic cognitive load represents the complexity and volume of information to process. Extraneous is defined by the conditions under which the information is presented (for example, fatigue, time pressures, emotional overlay). Germane cognitive load refers to working memory resources and how new information relates to the existing information within the individual’s long-term memory — the decision process. The greater the emotional overlay, the less working memory is available to address complex and often unfamiliar problems that might occur during a crisis.

The strategy is simple — in times of high pressure and information overload, utilise heuristics when appropriate, decrease the amount of unnecessary information and remove emotional pressure as much as possible.

In the boardroom

A similar approach may be taken in the boardroom in times of crisis. An effective board will have a crisis management plan, but how often is it rehearsed? How many directors know the plan at an almost instinctive level? This could be the role of the external crisis management specialist, if the board feels it necessary. These external specialists will manage the generic crisis while the board, as specialists in the organisation, manage the specifics of the problem.

The board and executive can then be coordinated under a clear leadership structure. Each individual would then perform a role best suited to their skills and experience, to address the specifics of the problem as it applies to the unique environment of the organisation they represent. This is where board diversity and cohesive work practice will provide better outcomes in times of difficulty. The chair must manage the team’s expertise, coordinate their efforts and ensure appropriate decisions are reached. He or she also shares the ultimate responsibility for those decisions.

The medical team leader is responsible for the diagnosis and specific treatment plan for the patient. A cardiac arrest can be considered a symptom of an underlying condition. The resuscitation team’s job is to keep the patient alive until the underlying diagnosis can be made and the condition reversed. If the underlying condition is not addressed, the patient will not recover — however well the team performs.

The same can be said for the board, particularly the chair. Successful management of reputational risk, legal exposure and financial downside will all be for naught unless the underlying cause of the organisation’s woes is not identified and addressed. As such, the cognitive load lies most heavily on the board chair. An experienced leader will develop skills to limit the affective intrusion on their decision-making. A calm and logical approach should always be adopted, decisions when fatigued should be deferred if possible, and emotional overlay avoided or mitigated.

Distributive leadership

One way to avoid team leader cognitive overload relates to the concept of distributive leadership. Organisational leadership experts have been investigating the concepts of distributive leadership since Craig Pearce and Jay Conger published Shared Leadership in 2002. In a recent meta-analysis of 40 studies, covering the performance of 3019 teams, published in the Journal of Leadership & Organizational Studies, the authors concluded, “Significantly, our findings reveal that the internal team environment and team heterogeneity are positively related to the emergence of shared leadership in teams. Moreover, we confirm the positive relationship between shared leadership and team outcomes.”

This work has only recently permeated the practice of emergency medicine. Another recent study investigated the effect of a distributive leadership model on resuscitation team performance in simulations of critically ill patient presentations. The CANLEAD trial, published in January 2021, analysed 20 cardiac arrest simulations performed by 120 clinicians over a two-year period.

Objective outcomes included improved time to defibrillator application, faster correction of ineffective compressions and shorter time to address reversible causes. The first two variables are closely associated with better outcome in resuscitation, the third is a reflection of more efficient use of the medical team leader in reaching a diagnosis and reversing the cause of the resuscitation. Given that mortality increases by around 10 per cent per minute during resuscitation if the underlying cause is not reversed, this outcome may lead to a 20 per cent improvement in the rate of return to spontaneous circulation in patients in cardiac arrest. Overall, distributive leadership demonstrated faster, better decision-making under high pressure, with a lower cognitive load for the medical team leader, leading to objectively improved outcomes.

Crisis training

In summary, we should be recurrently training in crisis scenarios so that we commit increasing amounts of relevant information to schema and develop heuristics to decrease intrinsic cognitive load. In times of actual crisis, we should rely on training and experience, decrease the unnecessary extraneous cognitive load and distribute tasks to those best suited to performing them. Leaders should maintain oversight of the process, identify the underlying cause of any problems and address that cause, while maintaining the overall viability of the subject of the crisis.

If we can manage the load, make the right decisions and, to paraphrase Rudyard Kipling, keep our heads when all around us are losing theirs, we may rise to the level of our expectations, while simultaneously falling to the level of our training — as long as that training is good enough. 

Dr William Davies GAICD is the clinical director of emergency medicine at Clarence Valley Health Service. 

This article first appeared under the headline 'Under Pressure' in the May 2023 issue of Company Director magazine.