The majority of non-profit organizations are
governed and lead by a board of volunteer leaders. While their names may differ by
organization—board of directors, governors, trustees, etc.—they all share the
common responsibility for the achievement of the purpose and mission of their
respective organization. Thus, ensuring
that the organization has a clear and achievable strategy is one of the most
important functions and the ultimate measure of the effective use of
organizational resources. Yet, many
boards remain mired in familiar challenges.
These familiar challenges include:
·
Time (most boards are limited to a set
number of scheduled meetings each year);
·
Focus on routine annual matters
(receiving committee reports and minutes);
·
Lack of first-hand experience and
knowledge with the overall organization (individual board members tend to have
specialized interests and spend their time in these occupational niches);
·
Limited time of board service (board
members tend to serve a relatively short period)
The challenge for most non-profit organizations is
that they are often impacted by unpredictable economic volatility, which is
less calendar driven and more a situation requiring frequent and regular
interaction of a broader group of organization executives. To be effective, boards must with work with
staff in this environment, in a respectful and effective team setting, ensuring
that strategy and operations are clearly linked and effectively implemented.
According to researchers Chinta Bhagat, Martin HIrt
and Conor Kehoe, writing in “Tapping the Strategic Potential of Boards”, in a
recent McKinsey Quarterly issue, there are three simple questions that board
members and executives may ask themselves as they approach the development of
strategy together:
·
Does
the board understand their industry’s/profession’s dynamics well enough: boards need time each year to more fully
understand the structure and economics of the organization, as well as the ways
in which the organization creates value
·
Has
there been enough board-staff debate before a strategy is discussed: board members should approach these
discussions with an “owner’s mind-set”, with the goal of helping staff to
broaden thinking by considering new, even unexpected, perspectives. Staff’s role is to introduce key pieces of
content—details of competitors, key external trends likely to affect the
organization, specific strengths the organization can use for growth, etc. The goal of the discussion is to develop a
stronger, shared understanding of the skills and resources the organization has
for producing strong performance, rather than merely moving with the tide.
·
Have
the board and management discussed all strategic options and wrestled them to
the ground:
Staff should formulate a robust set of strategic options, with an end
state for each. These can then be
brought to the board for discussion and decision-making.
Having meaningful, high-quality conservations like
these is a challenge, particularly if boards aren’t used to having them. Success is often linked to the board chair’s
ability to lead and facilitate discussion.
The goal should be for a participative, collaborative environment while
maintaining a healthy energy, in which all can speak their thoughts without
“score keeping”. And the chair must
neither monopolize the discussion nor fail to intervene strongly to redirect
unproductive tangents.
Board-staff involvement and discussions introduces
new voices and expertise to the debate and puts pressure on boards and staff
alike to find the best answers, and how they can be implemented and
measured. Yet, when done well, this type
of discussion and strategy is invaluable.
For the full member article, go to https://www.mckinseyquarterly.com/Governance/Boards/Tapping_the_strategic_potential_of_boards_3060
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