Strategic Management Insights

Help Your Board Help You

It’s too bad that the average Board of Directors isn’t given more opportunity to fully contribute to a company’s success.  After all, most Boards include intelligent, experienced, and well connected outside members.  That’s presumably why they’re on the Board.  But we can’t tap their full potential if we don’t give them enough useful information.  Typically at a Board meeting the members get a (hopefully) accurate financial statement and other data along with a generally rosy update on a number of initiatives, activities, and plans.  The ensuing discussion tends to be disjointed and the meeting can feel like a low level cat and mouse game where the Board tries to figure out what’s going on and where the problems might be hiding.  Why does this happen?  Because they don’t have the information they need to feel safe and to take an active part in helping the company succeed.

Your Board Members are Nervous
Top of mind for most of them is: “How do I meet my responsibilities and avoid personal liability?”  This is probably good.  You want them to be on the lookout for trouble.  After all, they have a fiduciary responsibility that shareholders, lenders, employees and others take very seriously.  And if a Board can’t help management keep the company out of trouble, who will?  But while “staying out of trouble” is important, it’s not a recipe for success.  It will keep the company away from where it doesn’t want to be, but it won’t get it to where it could be.  In fact, some say that we inadvertently create what we try the hardest to avoid.  That’s because we move towards our dominant thoughts or as Napoleon Hill and others have taught us: “You are what you think about most of the time”.  So let’s think about making progress.

The Board Is Trying To Help
Board members don’t want to be constantly distracted by worry.  They would much prefer to spend their time at meetings and between meetings thinking about ways to help the CEO and executive team achieve the company’s goals.  But it’s hard for them with the way things are usually set up.  At meetings they try to get caught up, watch for problems, and then … bang!  The meeting is over and they’re not really in the game, so they drift back to thinking about other things until the next month. 

Shine the Light
So how do you keep an outside Board member focused on helping the company succeed?  Start by using information to reduce fear and distraction.  We’re afraid of the dark because we can’t see where we’re going and what dangers may lurk.  But when we shine a light on our path we feel a whole lot safer.  So presenting timely and highly accurate financial information is a must.  So too is presenting any problems or liabilities that may lie ahead.  Full, timely, and reliable disclosure builds trust over time and frees the Board to focus on other things. 

The Game Plan
Once a Board feels confident that it is being kept fully informed about potential dangers, it can spend more time thinking about ways to help build the business.  This is when you want to get them in on the game plan in a way that they can easily understand.  The game plan is the strategy.  It ties the Mission (Purpose) and the Vision (5-year Destination) of the company to the Operating Plan and monthly Budget.  The best strategy can be explained on a single sheet of paper.  It should describe in simple terms what you’re doing differently and exceptionally well to attract and retain more customers in your target market than your competition, and what impact this will have on revenue and profit growth.  And because you never get your strategy exactly right (and your market and competition never stand still) you want to lay out your strategy in a measurable cause-and-effect framework so that you can test whether you are doing what you said you would do and getting the results you  thought you’d get. 

Let Your Board Help with the Questions
Once you and your Board understand the game plan and are measuring key strategic inputs and outcomes, you can begin to focus on the really important stuff – the questions; i.e. what are we seeing, why is this happening, what can we do about it and how can we do things differently to get different and better outcomes?  This is exactly what you want to be talking about with your Board because they can help you analyze, understand, and resolve these big questions.  And if you make it easy and fun, they’ll keep on thinking about your company long after the meeting is over and hopefully they’ll call with additional questions, answers, and resources to help you succeed. 

So . . .  It’s Up to You
Success is not achieved by those who know it all.  It comes to those who have a framework within which to ask the right questions and seek solutions with help from others who are dedicated to helping the company succeed.  Board members should be a big part of this but you have to help them help you by explaining the multiple elements of the game plan in a way that they can understand, remember, and track.  If you do this, they will reward you with insight, wisdom, and resources that are guaranteed to accelerate your progress towards your goals.  So go ahead - help them help you.

- Brian Kinahan

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