The Synergy of Three Key Tools

By Bill Dann
BoardGrowth™ Founder

Time to read: Three to four minutes.

In case you missed the LinkedIn webinar on November 16, we reviewed what I call the “3 Legged Stool of Effective Governance”. (Don’t they always have 3 legs?)  In previous newsletters I have made the case that having these three tools (strategic plan, sound policy and the right data for evaluation) are the secret to avoiding the dreaded micro-management that derails so many board-CEO relationships.

What I hadn’t talked about before is how these tools work together synergistically (def. the combined benefit of these tools is greater than the sum of the three) to enable the board to build trust in management and move the board toward a more strategic or value-added role.

How the three tools work together

Strategic Plan - as we have talked about repeatedly, this is the tool that enables the board to take control of the future. Without it, you are at the effect of events rather than seeking to determine them. Without it, you lose a valuable means of evaluating your CEO. How well does he/she assess the strategic environment? Does he/she execute on the “promises” inherent in the targets imbedded in the plan?

More than this, though, your plan is also vital for the board’s role in Evaluation (one of its 10 key responsibilities). Until you lay out the course and strategy, and then test it in the crucible of the marketplace, you can’t truly evaluate the strategy. Did the strategy determine the results or did something else? Without an explicit strategy that you execute, you won’t know, and you can’t take corrective steps.

Metrics - if you’re a long term reader of GrowthLines, you know I advocate for defining measures that enable monthly data gathering so as to be able to see trends rapidly. Without metrics on both the projects in your strategic plan and the vital few measures on the condition of the organization and its progress toward vision, you run the risk of committing one or both of what W. Edwards Deming defined as the two fatal errors in management, 1) making a change or adjustment when you shouldn’t or 2) not making an adjustment when you should.

Your metrics are the only true means of knowing whether the strategies in your plan are working and what external or internal factors may have disrupted strategy. Metrics enable you to have an effective dialogue with management regarding what is influencing results. Without them, you can’t improve your plan, and you can’t define good policy.

Policy - this is the tool to document and disseminate what you have learned, the wisdom you have acquired. Using your plan and metrics, you can determine what is working for you and what is detracting from performance. Once you know that, then use policy (change in use of resources, change in plan, change in process, change in rules) to strengthen what is contributing positively and to eliminate what is not.

The results

So, with these three tools, as a board member, you have the ability to:

• Direct the future of the organization
• Evaluate your CEO
• Evaluate the effectiveness of the chosen strategy and modify it as needed
• Assure that management is clear on the lessons learned and that they will be used consistently instead of lost over time.

I have witnessed continually over the years that, when boards focus on putting these three tools in place, they foster:

• Trust in their CEO
• Long tenure of their CEO
• An end to board time spent reviewing what has already happened in the form of staff reports, etc.
• The ability to devote more time to strategy and evaluation, where the real fruits of governance lay.

In short, the impact of these three tools together is far greater than the simple sum of their impacts.

How to make it work for you

If you missed the webinar, contact us for information on how you can get the webinar presented live to your board at your next meeting.