Becoming Data Driven

Boards need a data-driven organization

The rationale for having a board of directors is to incorporate multiple viewpoints into one group that is beholden to the interests of the stakeholders (stockholders, members, community, etc.) , and that can assure that the assets are protected and decisions are made for the benefit of those stakeholders.

Because the board is a group, there are multiple viewpoints represented, viewpoints on what should be a priority, what is the best strategy, how best to accomplish something, what are the external threats and opportunities, etc.

A key to success is assuring that decisions made are rational (def. based on logic or reason, conforming to that which can be validated). So, how do you insure that “rational” is the case? I would submit that it centers on becoming a data-driven organization.

Data-driven as an alternative to what?

Every board member has a viewpoint based on their own experience. For example, what they value or are most concerned about, what fellow stakeholders have expressed concern about, what their personal experience has been, etc.

organizational-metricsSo, if that is the case, how does a board decide on an issue? Well, often they decide based on who talks the longest and hardest or whether or not management is able to make a persuasive argument that trumps the individual viewpoints of board members. But, such a process is prone to lack consistency and logic. This is the alternative to being data-driven.

Data-driven organizations make their decisions re. priorities, use of resources, strategies, problems to be solved, program/product evaluation, etc. based on facts and trends that are apparent from an analysis of those facts.  To have facts, you need data.

Questions data can answer

  • What are the greatest needs of those we serve, our customers?
  • Which conditions are getting better for those we serve? Which are getting worse?
  • What services or products are generating the most demand? What are the trends with regard to demand?
  • What is the level of satisfaction with our services or products?
  • How does our cost per service compare with others?
  • Are our products/services having their intended impacts?
  • Are our strategies working?
  • What are the most frequently occurring problems?
  • What are the concerns of our stakeholders?
  • What is the level of turnover of our staff? How does it compare with peer organizations?

How to get there

First, each board member must pledge that they will surrender their view of what is true to what the data is telling them.

Second, the board must define a set of data or metrics (we call the sum of these data sets an Instrument Panel) that are unique for the organization and can be cost-effectively gathered to answer these questions.

Third, the board must insist that this data be presented to them on a regular basis in a format that displays the relevant trends, as you do not want to act on simply one month’s worth of data, but rather trends that are confirmed over a series of months.

Fourth, insist that when management is bringing you a matter for decision on any of the questions above or others, including your strategic plan, budget etc., that they are also bringing you the data that is relevant for that decision.

We offer workshops on how to become a data-driven organization as well as help setting up your own Instrument Panel and using it for decision making. For more information contact us.


The Value of Data

By Bill Dann, BoardGrowth Founder

Where’s the data?

One of my favorite tools that we produce at PGS is an Instrument Panel. Why? It is the tool to show a board not only the organization’s financial health, but the status of its core processes, progress toward its vision, satisfaction of its customers, etc. all on one page. In other words, it is a like the dashboard of a car – showing the status of the vehicle as a whole through the combined analysis of its various parts. It is an essential tool in the leader’s toolbox.

Unfortunately, the Instrument Panel is probably the most seldom asked for of our tools, and a challenging one. Of the few boards who have developed one, many have never fully realized its predictive power to improve/sustain performance. Whether you use our tool, a Balanced Scorecard or similar, the issue often seems to be the same.

My sense is that, in boards, this results from many board members not being adequately trained to analyze a variety of measures in such a way to give meaningful feedback, ask relevant questions and make sound decisions.  So they choose to not address measures as in depth as they should, if at all.

How can your board buck the trend? Let’s look at what to measure and how, to begin to breakdown the barriers.

What to measure and what not to

4-15 newsletterMany boards I have worked with have a good handle on the financials of the organization, though in some cases that is the first piece that is missing. However, regardless of the board’s skill at using them, financials are only part of the story.

Have you ever heard the expression that leading based solely on financial statements is like driving your car solely by looking in the rear view mirror? Financial statements present historical and point in time data, the results of work done. They are valuable in that they tell you about the past, what has happened and where you are financially.

But financial statements will not tell the board what dynamics in the organization are changing or point quickly enough to the need to do something differently. Financial statements don’t show you trends, the mindset of your customers and employees, or the health of critical processes.

More than financials

A solid instrument panel or similar group of measures looks at financial data in amongst other relevant data in order to show the whole picture of the organization. Further, a board benefits from a set of measures tailored to what the board is responsible for, while management analyzes its own set of measures. Some of the measures may be relevant for both group’s panels, but each group should carefully consider what will best enable them to do their job well.

The board’s instrument panel should consist of the following:

  • Outcome measures that assess progress toward the organization’s intended future and therefore the effectiveness of the processes management has implemented to get there
  • Strategic measures that are directed at the strategies chosen to grow your business or satisfy your stakeholders
  • Core process measures that assess the health of critical processes, so that the board can set policy for achieving and maintaining sound systems

How to measure: the value of trend data

W. Edwards Deming stated that there are only two mistakes you can make in managing, 1) not acting when you should, or 2) acting when you shouldn’t. These mistakes most often happen from lack of good data, particularly trends or data showing changes over time. A good set of measures should show you trend data.

Why? The board can be shown  a single data point and spot that something significant has happened, but they can’t answer the question re. whether or not to task management into action or to set policy. A single data point may be an anomaly, sourced in a one-time occurrence. Taking action, e.g. changing policy, changing strategy, changing leadership, all to avoid a repeat occurrence could be disastrous.

How do you know whether the change is a one-time anomaly or what Deming called a “structural change” that won’t reverse itself and needs to be responded to by a leadership action? The answer is that you need to look at multiple points of data, i.e., look at the trend or plot of the data points from month to month over the course of many months. If you see three straight months of data that concern you, then, likely a structural change in markets, customers or your systems/performance has occurred, and you need to deal with it.

Getting started

In order to have a good set of measures that will enable you to lead well, task management to develop 7-12 measures that include the outcome, strategic and core process measures described above. Ask, what is the board held accountable for? Do you have the data to back up the decisions you are making? If not, what data is missing? The answers to these questions should point you in the direction of a solid instrument panel for your board.

You will find that it takes discipline and a continued high confront level to use an Instrument Panel or any set of measures well during your board meetings. If you are struggling to get started, or if you have some measures in place but would like some tools to use them more effectively, contact us. We would be happy to help you get started or to give you some good analytical questions to help in utilizing your current measures better at no cost.


The Risks of Financial Projections

By Bill Dann, BoardGrowth Founder

A Wake Up Call

Of late, I have been seeing boards surprised because the financial performance of their organization is not matching the projections adopted in the plan/budget for the year.  Because they have not peeled below the projections to understand the assumptions behind them, they don’t know how to fix the problem.  “What did we miss and why? Is it marketplace changes we couldn’t control or foresee?  Is it a change in our competitive status in our markets, i.e. losing market share?  Is it poor execution by our management team?”

I once read a quote on governance that described attending a board meeting as “entering the on-ramp of an expressway at rush-hour”.  You had better move fast.  Meaning you need to rapidly understand what is before you and asked of you or risk being in the meeting for endless hours. “Rush-hour” represents the speed at which management wishes to move, and the pressure is on you to not impede their progress.  In short, the pressure is to rubber-stamp rather than question, probe and truly understand.

The Root of the Problem

The challenge here is that projections of how the company will perform are only as good as the assumptions behind them.  What will be our sales?  What will be our costs?  In the non-profit arena, there are assumptions about government or grant funding, assumptions on revenue for services rendered, etc. that drive the budget.

But, what was the basis for those projections, i.e. what are the assumptions about the future?  Did management just assume that trends from recent years will continue?  Was there any serious analysis of competitive factors that could make the future different and impact the company? Are new competitors moving into our market, are government contracts drying up, etc. Failing to see competitive or political threats can result in continuing your current level of costs without the revenue to cover them, with the result that you experience losses.

What to Do?

As always, the challenge for boards is that they often don’t have expertise of their own in the markets the company operates in.  For a non-profit, board members often don’t live in the grant/contract world every day.  So, the board has little independent knowledge of trends and must rely on management to do a sound job of monitoring and understanding these competitive factors and how much risk they pose to plans/projections.

Here are some suggestions on what boards can do to minimize the risk of relying on projections that are not based on sound assumptions:

  1. Consider bringing in an expert from your industry to either educate you on current trends or participate as an outside board member who can critically evaluate the assumptions in management’s projections.
  2. Insist that management undertake a serious strategic assessment using Michael Porter’s “Five Competitive Forces” or similar analysis in order to understand changes in the environment, evaluate their impact and more appropriately plan the organization’s strategies for the future.  Have the results of that assessment presented prior to considering any financial projections.
  3. Direct management to routinely deliver information on how you compare with the peers in your industry on such factors as costs of production, overhead, productivity, etc.  Get a sense of your status vs the industry leader, what the plans are to “catch” that leader, and what other competitors including the leader are doing to secure even more market share.
  4. Assess the risks associated with the financial projections/budget that you adopt.  Is that budget based on conservative, middle of the road or optimistic projections?

The upside

There is an upside to insisting on a clearer understanding of the assumptions impacting your bottom line financials.  Conducting an environmental analysis in order to more accurately forecast financial projections will reveal threats from your competitors, dwindling government contracts, etc. However, a good analysis will also surface solid opportunities to grow the organization and to benefit from a changing environment. If your board has been surprised by poor performance based on a shallow analysis that missed some real threats, chances are you may be missing some equally real opportunities.

We can help.  Give me a call (877) 276-4414 or an e-mail to find out how to bring a state-of-the-art strategic analysis to your organization as you prepare for your next fiscal year.


The Governance Toolkit

By Bill Dann, BoardGrowth Founder

Missing tools lead to micromanagement

Micromanagement occurs when the board inserts itself into management decisions without adding value, negatively impacting the organization by slowing decision-making. Readers of these newsletters know that micromanagement is considered a major issue in governance. You also know that it is my view that the source of micromanagement is either: a) the lack of trust in management, and/or b) a lack of good tools for the board to execute their responsibility. When the trust and/or tools are missing, the board engages in controlling small items that it can understand, i.e., micromanaging decisions.

In this month’s newsletter, I am focusing in on the tools a board needs to eliminate micromanagement. However, if you are interested in learning more about micromanagement, see our February 2013, April 2012, and June 2008 newsletters.

The board’s toolkit

Governing boards need effective tools to be able to efficiently execute on their primary responsibilities: setting direction, setting policy, evaluating results, and determining the need for changes in direction or policy. Though there are other responsibilities that fall on the board’s plate, e.g. hiring and evaluating CEO etc., these four are the major ongoing responsibilities for which a toolkit is needed. What are the key tools in that toolkit?

  • A clear, usable strategic plan
  • A set of metrics or measures to evaluate progress
  • Board administrative policies

The strategic plan

A good strategic plan includes a methodology to define key strategies for either growing the business (for profit) or improving services/outcomes (non-profit). This requires a solid assessment of the strategic environment of the organization, i.e., its competitors, their potential moves, the organization’s customers, new technology, etc.. Opportunities for growth and threats to current markets/services are identified and evaluated in the assessment. From there the strategy for growing or improving service can be developed.

The strategic plan should also include the identification of current performance strengths and weaknesses, and address any internal improvement projects (e.g. customer service, process improvement, employee retention) that will be critical to maintaining or improving market position.

The strategic plan is part of the informal contract between board and management. Performance on that contract is vital to maintaining trust in that relationship. Through the planning process both parties agree on what future changes are needed, management then commits to a series of targets for progress on those changes and executing on those commitments is one of the key basis for maintaining trust.

Ultimately, the board is responsible for the long-term viability of the business, so assuring that there is a sound strategy and a plan in place is critical. The board needs to monitor progress on the plan throughout the year and clearly understand the source of any failures to achieve milestones and targets.

Instrument panel of measures

Next, the board needs a set of metrics or measures that monitor the vital statistics of the business. Vital statistics include:

  • execution on key factors that distinguish the business from competitors (e.g. delivery time, support services, unique product features),
  • key processes or systems that determine overall performance,
  • financial metrics, and
  • the impact of strategies included in the strategic plan.

The set of measures, or Instrument Panel, must be uniquely designed for each organization. What this gives the board is trend data. Access to trend data will enable the board to avoid two key missteps: making a change when you shouldn’t or not making a decision when you should.

Board administrative policies

The board must put in place a set of rules that govern both their own activities and the boundaries for management. Policies governing the board define expectations of board members, set ethics boundaries, define roles and authorities of committees (in more detail than the bylaws) and cover administrative matters such as agenda setting, timing of delivery of board packets, travel, representing/speaking on behalf of the organization, a calendar for board functions, etc. Policies governing the relationship with management lay out the authorities granted to management to act independently.


Let’s look at what the impact of these tools are upon your ability to govern:

  • The strategic plan enables you to set future direction. If you don’t have it, then who is determining direction? If it is not you, then who is in control of the organization? If you have not defined what you want to have happen, then you have denied yourself a means to properly evaluate your CEO’s effectiveness and the means to assure future viability of the organization.
  • The instrument panel enables you to evaluate the performance of the organization and of the strategies you have chosen in your strategic plan. If you have no such measures, how can you know the direction of the organization? Looking at financial statements only tells you the ultimate impact of the trends going on inside and outside the company. As Deming once quoted, managing an organization by looking at historical data like financial statements is like driving a car looking at the rear view mirror. Without an instrument panel your decisions to change strategy or policy are likely to be too little too late, or too early and not needed.
  • The administrative policies assure that the organization runs according to how you wish it to run, i.e., that your corporate values are lived, that your board members fulfill their responsibilities and avoid ethical lapses, and that management operates within limits that you set. Without them, you are asking both board members and management to play a game without rules. In short, you are asking for chaos.

What to do?

Assess whether you have these basic tools in place and whether they are adequate. If you are not sure or you know that you need to put them in place, contact us. You can e-mail us or call at (877) 276-4414.


Too Lofty A Vision

By Bill Dann, BoardGrowth Founder

I recently reconnected with the former CEO of a long-standing strategic planning and board development client. He opined that one of the sources of the company’s decline was the board adopting too lofty (i.e. unrealistic) a vision.

Those of you familiar with our Vision Navigation® strategic planning process know that we borrow from the James Collins and Jerry Porras classic, Built to Last, recommending organizations adopt a BHAG (“Big Hairy Audacious Goal).  A good BHAG has a clear finish line, acts as a catalyst within the organization, aligns resources and calls the group to higher performance.

compassWell, the CEO explained that his board did just that, and it was indeed lofty. In this case, a revenue growth goal over a sustained period. However, he relayed that the vision was too lofty, putting pressure on subsidiary managers to manufacture projections that showed that they would achieve the target growth rate. My take is that it was not the vision that wrought the problem, but rather the failure to critically examine the assumptions behind the numbers and the true competitive position of each subsidiary.

It is possible to create a vision that is laughable or beyond reality for those tasked with achieving it. If you do so, it will be demoralizing rather than galvanizing.

What should have happened is that the board and leadership should have shifted their gears and gone to a higher level of performance to accompany the higher vision.

All of this strengthens my conviction that a critical examination of a company’s competitive position and the dynamics of its chosen marketplace are key to insuring a prosperous future. I commend all readers to examine the work of Michael Porter from the Harvard Business School who is regarded as the premier theorist on competitive strategy. Employing his approach to competitive analysis will insure that a vision (which should be re-evaluated each year) continues to serve the organization well.

If you have additional questions on this or would like reference information on Michael Porter, e-mail us, and we will get back to you the information you need.



Challenges for Non-Profits in Strategic Planning

By Bill Dann, BoardGrowth Founder

I came across an interesting piece of research via LinkedIn, summarizing a study on the biggest challenges faced by non-profits in completing strategic planning.  Here are the top four challenges:

  1. How to make goals, objectives, and other content concise and understandable for planning participants (mentioned by 61% of respondents).

  2. How to communicate clearly and concisely how the plan will lead to action (mentioned by 45%).

  3. How to carefully define expectations/process for participants on the front end (mentioned by 42%).

  4. How to best gather input from key stakeholders, employees (mentioned by 35%).

The data source for the above is the “Strategic Planning Practices Result in Higher Performing Nonprofits“, sponsored by the Association for Strategic Planning and the University of Arkansas, Department of Political Science.

Combining Challenge #1 and #2
My take on the first two challenges is that the answer to  #1 lies in #2. Here are the steps to take to eliminate those two challenges:

  • Break down projects into small enough bites or outcomes that you can know whether the project is going to be completed on time by knowing the status of each outcome.

  • State what is to be achieved in each project and the bite-size outcomes  as completions rather than a to-do’s, (e.g. “research report completed vs. “conduct research”).  That way, accountability is for a result or finished product, not simply to go into action.

  • Establish a deadline and a person accountable for each outcome in the plan.

If you lay out action steps as completions vs. activities , and you spell out who is accountable and by when, then you have an actionable, understandable plan.

Additional strategic planning challenges for non-profits
After viewing the challenges listed by the organizations, I would add these challenges in the mix:

  1. A culture of lack of accountability for results. CEOs don’t hold their people accountable, and boards don’t hold CEOs accountable.

  2. Board and management don’t evaluate whether their services are working for their clients. They resist metrics based on a rationale such as “you can’t measure the value of a human life”. Instead, they measure activity, i.e. how many clients and services, but this does not address whether the problem (health status, homelessness, abuse) they are trying to solve is getting better or worse.

  3. Board and management don’t assess competitors or alternative solutions sought by clients.  Rather, they self-righteously maintain that it is their domain.

Let me expand on these a bit.

Results vs. reasons
The biggest challenge for any organization, non-profit or otherwise, is to shift the culture from one of “reasons” to one of “results”.  By “reasons”, I mean, reasons why something didn’t get completed. There are always plenty of those.

But, let’s go back to the essence of a strategic plan.  If the strategic agenda is done correctly, then that agenda includes a list of the changes that are needed for the organization to prosper in the future.  Meaning, if you don’t execute on those changes, then you put your future at risk.  The agenda should be limited enough to be doable, and the work assignments should constitute no more than 10-20% of what any individual is expected to do.

The problem is that strategic projects are heaped upon what individuals are already expected to do, which is often challenging enough on its own.  Thus, you can’t really execute on the strategic agenda unless individuals find a way to a) improve their own productivity or b) empower others to handle some of their day-to-day responsibilities.

Without one of these two changes, there will be a litany of reasons given for why outcomes aren’t achieved.  The board, CEO and members of the management team have to challenge one another to go beyond “reasons” to “results”.

The impact of disempowered consumers
In non-profits, customers are very often disempowered. They are not paying full price for their services, can’t take their business elsewhere and thus can’t demand a certain level of service or result. This disempowering of the customer leads to a lack of performance and customer service discipline within many non-profits.

To overcome this, non-profits must actively seek dialogue with their customers. Customers are experiencing high performance organizations in the rest of their life.  Grocery stores, restaurants, auto mechanics, etc. all live in highly competitive markets, and those that prosper are performing at a high level for their customers.  Those same customers are comparing their experiences in high performance organizations with performance at a non-profit, and the non-profits are often coming up short.

Some simple questions to ask in determining where to make improvements include the following:

  • Were our clients’ expectations met?
  • How could outcomes and service have been improved?

Without good data on the customer experience, a suboptimal strategic plan will be created. The work of planning itself tends to not be as rigorous, because the organization can get by without fully satisfying its customers. The customers have little or no other choice.

Other challenges?
Although I agree that the original list of challenges poses a problem for non-profits seeking to achieve the best strategic plan possible, I believe those challenges are more easily overcome. The bigger obstacles that I run across are those challenges I listed above. These are the challenges that keep a non-profit from becoming a truly high-performance organization.

It would be interesting to survey consultants working with non-profits re. the challenges they see as relevant and critical.  I suspect you would see a different set of challenges than those posed by the organizations themselves.

Questions or thoughts? Send me an e-mail.



Using Metrics

By Bill Dann, BoardGrowth Founder

Hard data vs stories

Those of you with whom I have worked know that I am a strong advocate for basing your decisions and assessment of the condition of the organization on hard data vs. stories, rumors, gut feelings. The two mistakes you can make are not seeing that you are in trouble and need to take action, and falsely judging that you are in trouble and taking action when you should leave well enough alone.

Years ago I read a book entitled Breaking the Bank, by Gary Hector, that told the story of the near collapse of the Bank of America (at the time it’s assets were equal to that of the sixth largest country on the planet). The bank was leaking profits big time in its South American operations. Despite a board consisting of the best and brightest, the board took six years to act on the problem, resulting in the near collapse of the bank.

For years, management, including a series of CEOs, would offer a plan for turning things around only to find that the strategies did not work.  The board never got to an understanding of the root causes and then to a plan of action to address them.

I see boards struggle with this.  Their CEO’s have done well in the past, and directors don’t want to offend or communicate distrust, so they ride their trust line too long.  So, what to do?

Define vital statistics

Whether a for-profit or a non-profit entity, we recommend you work with management to develop a set of vital statistics or metrics that tell you the condition of the organization at any one time.  The data you select should be gathered and displayed monthly as trend data (a run chart).

In some cases you will want the data to go up (e.g. revenue) and in some cases down (overhead per unit of production).  The metrics you select will be unique for your organization based on your vision, characteristics that separate you from your competitors and vital systems that drive performance.

A normal condition would be slightly favorable statistics each month. Any condition other than that should prompt inquiry from the board as to why. Did the metric go up faster than in the past? Why? You may want to do more of whatever that is. Did it decline? What was the cause ? Ultimately you will want a solution to that problem.

What’s the approach?

It’s hard to know what the B of A board failed to do, but here is my take on what should happen in the boardroom:

  • organizational-metricsUpon seeing the first unfavorable data point, inquire of management as to their take on the cause and whether anything should be done about it.  If the answer and proposed action/inaction make sense to you, go with it.  If not, ask for more data or whatever action is appropriate.
  • Upon seeing the second straight unfavorable data point, ask the same questions, but be a bit more aggressive in getting to certainty that the organization understands the true “why” that explains what is occurring. Depending upon the importance of the metric and the slope of the decline, you may wish to initiate an independent investigation as to what is occurring. This would be the case after two negative data points in a row in only the severest cases.

An overreaction is what you are wanting to avoid here. It may be that you are experiencing normal down-trend cycles like a yearly seasonal downturn in revenue, unusually high expenses that occur at this time every year, bad weather impacts, etc.  In such cases, taking an action like cutting the marketing budget or lowering production could prove disastrous. You have to determine whether you are experiencing a normal, cyclical change or a structural change. A structural change  will not reverse itself, e.g.computers replacing typewriters or on-line shopping impacting retail.

  • Three negative data points in a row indicate a likely structural change. At this point, some action is going to be required. In all likelihood, the trend is not going to reverse itself, and you need to take action based on what is the new operating condition or market reality.

A common mistake that I see is a board governing based on projections without understanding what is behind those projections. Boards need to be aware of the assumptions behind a projection and their validity. That will be the subject of next month’s newsletter. For now, be sure you have metrics in place that will give you a heads up when conditions may be changing.

Drivers, not results

One more point, month end financial statements are not the metrics we are referring to here. They reflect the results of work already done, decisions already made. The metrics to track for this type of decision making are those that reveal what is happening to the drivers of the numbers on financial statements – sales efforts, product quality, customer service. W. Edwards Deming once said that running your business looking only at results is like driving your car using only the rear view mirror. Financial statements tell you what has happened, but are not a predictor of the future. Acting on them alone can be hazardous, as the data often comes to you too late to take appropriate corrective action.

Want a hand in development?

Are you interested in creating a set of metrics for your board and organization? We enjoy digging into the numbers with our clients to help them create the measures that matter in their ultimate decision making. We call it an Instrument Panel. If you would like assistance in putting together an Instrument Panel for your organization or learning how to use measures to evaluate your organization’s current status, drop us an e-mail.  We would be happy to help.



Involvement in Strategic Planning

By Bill Dann, BoardGrowth Founder

The norm for board involvement in our strategic planning process (Vision Navigation®) is that the board receives two assessments from management, one regarding the strategic environment and one regarding how performance of the organization could be improved. The board then considers recommendations from those assessments in the form of projects to be undertaken to grow the company (for-profit) or improve/expand services to clients (non-profit).

I have counseled that more extensive involvement of the board in strategic planning should be reserved for a “value-added board”(Chait, R., Ryan,W, Taylor, B, Governance as Leadership, BoardSource) that has earned the right to involvement in completing those assessments by virtue of tenure, experience, and knowledge of the board members. The theory being that a board so constituted can make up for the inevitable blind spots that the management team would have.

But, I recently facilitated a board retreat in which the CEO had a very different theory about board involvement, and the results were impressive indeed. So I thought I might share the lessons with you.

The Situation


Admittedly, the conditions were somewhat unique. This was a non-profit environment involving cross-cultural delivery of health services. The board, in this case, was advisory to a specific program rather than the governing board of the organization as a whole. The board had been serving for over 20 years, but members shared with me that they never felt they added value. One commented that he felt like an “imposter”.

It was an all too common condition in these cross-cultural settings; the indigenous board members do not feel that they are adding value. Professionals in the program are either inept or uncommitted to having board members truly understand the inner workings of the program, the theories and strategies surrounding their treatment approaches, etc.

Twenty years of such practice had resulted in a failing program. That is, the health problems the program was designed to combat were worsening. A new director, an indigenous leader himself, came upon the situation, and that made all the difference.

A new approach


The new director set the tone for the session in opening remarks. He challenged the group, which included all program leaders as well as the advisory board, to rise to the expectations of the region and find workable solutions. He asked them to develop solutions that were their own rather than rely on standard solutions proposed by the professional disciplines involved, whose record showed a lack of effectively engaging clients in a way to positively impact the problem. This must be “your plan”, he said.

The group numbered as many as 40 at times. My previous experience with similar groups was that they were unwieldy and unproductive. For that reason, I counseled the director to let me alter the process, but he insisted. His wisdom prevailed, and his process design was executed. To assure that advisory board members could feel safe that I had joined the “family”; he insisted that I lunch with the advisory board members on day 1.

By use of heartfelt comments in a sort of talking circle format, followed by small group discussion, the elements of the problem were defined and solutions proposed. There were long breaks. Meals were taken together, during which informal conversations took place. Powerful testimony by those impacted by the health problems humbled everyone and forced a re-look at the situation with no preconceived notions. There was never mention of grant rules, legal challenges, licensure issues or the like.

The outcome

The process took twice the time than was standard practice, but the outcome was rather magical. What was different? Well, to begin with everyone “showed up” as a peer. There was no separation by culture, rank, professional degree or advisory vs. not. All points of view were heard and honored. Advisory board members, rather than feeling like imposters, felt empowered as owners of the new solution.
What had previously felt like a solution imposed on the region had become a solution developed by the region.

Lessons learned

It is common that the real benefit of planning is not the content of the plan, but a change in the group that created the plan. That change, be it stronger teamwork, stronger accountability for results or stronger ownership of the agenda, makes possible performance that would not be possible otherwise. And, it is the change in performance of the group that makes change in the organization possible. As is often said, plans don’t make change, people do.

But I have never had a stronger witness to the importance of process in all my years of planning with organizations. It now feels as if all things are possible for this program whereas previously, all that was possible was a repetition of the past.

The second lesson surrounded the role of the advisory board. I have never been a big fan of such structures. Rarely do such boards add value and rarely is membership satisfying for its members. So, I have consistently counseled against advisory boards. But, this situation taught me that an advisory board can serve a useful function as the conscience for the group; a reminder that what we are doing now is not working, and we need to innovate to find real solutions.

The third lesson is that none of this is possible without a servant leader, a leader who puts aside his own ego needs and drive for success, and surrenders to the will of the group. That surrender made possible the group relying on itself only for a solution. Such a solution will have much better odds of success than one that the leader facilitated or led them to.

Would I use this model again? Absolutely. And, I see that the conditions that made such a process necessary are more common than I am willing to admit. I only wish I had had this experience years ago.

As always, I give thanks to my clients as they are the wellspring for much of my learning. I am interested in your thoughts and comments. E-mail me.


Evaluating Strategy


By Bill Dann, BoardGrowth Founder

Those of you who have used our Vision Navigation® strategic planning process know that we include in each project the question of whether the effectiveness of the strategy can be measured. We call this part of the process “defining a metric”.  What we are trying to do here is not measure whether or not you have reached your goal or target for the project, but whether doing so made a difference.

How we came to this

Adding the metric to our process came about 15 years ago, when we began working with a new client and asked the board whether a certain strategy they were employing was effective.  The board’s goal was to improve educational outcomes for its shareholders, and they had chosen to use some of the organization’s profits to do so.  Their strategy was to invest in supportive services for their students on the campus of the state university.  They had been doing this for ten years.
We simply asked, “How is this going?” No one knew the answer.  We then asked, “How would you know?”. Answer, “By the number of graduates”.  Question, “How many have you had?”  Answer, “We don’t know”.  A bit of research was done, and the answer was “zero”.  Had they known this years earlier, no doubt the board would have urged management to alter the strategy to realize a return on their investment.

We continued to ask the question of other groups we worked with and often found the same results.  That is, board and management only knew if what they wanted to implement was, in fact, being implemented, but they hadn’t measured whether it was working.

So, we added the metric to our planning process and also added an Instrument Panel (a series of metrics to measure to overall health of the business) to our product offering.

Your responsibility

As responsible stewards of the assets or your organization, you need to know whether the strategies you are investing in are working.  If not, you need to revise or get off them.  If they are working, you should consider additional investment in them.  But, you have to have sound data to make this judgment.

An effective metric

A sound metric is one that measures frequently (preferably monthly) whether your strategy is working. Why monthly?  The real value of a metric is in giving you good data to evaluate your strategies early on, so that you know whether you are making a sound investment of time and money.

Here are some criteria to consider in developing a metric:

  • Choose to measure the “why” behind a strategy.  What is the purpose or “why” behind a strategic project on your plan?  Is the project serving that purpose?  For example, a “why” might be reducing staff turnover, and the strategy chosen to influence turnover is implementing flex time. Your metric would measure staff turnover before flex time and after to assess the impact of that strategic project on the “why”.
  • Choose to measure a specific strategy to assess its impact.  For example, let’s say you are implementing a new marketing campaign to attract new customers.  Choose a measure that can definitively show you whether your marketing campaign is bringing in new customers vs. some other factor such as word of mouth or a more aggressive sales campaign?  To do this, choose a metric that isolates out all the other potential reasons for a change in the numbers and gets to the effectiveness of your strategy alone.
  • Choose a measure that is cost-effective to produce.  For example If you are wanting to measure customer satisfaction through a customer survey, consider the cost to survey your customers on a frequency that will really help you.  If it is cost-prohibitive, determine a different, more cost-effective method to assess customer satisfaction.

The bottom line

As an exercise, ask yourself this question, if an investor, shareholder or source of grant funds came to you and asked you to make the case for why the organization should continue a strategy or program you are now investing in, could you answer the question with hard data?  If not, then you should talk with management about putting in place metrics to evaluate your strategies.

Although the math behind a metric can be intimidating, creating charts of significant strategic measures is important to knowing your success and progress toward your vision. We would like to help you set up a few key metrics for you to begin exploring this valuable tool.  If you are interested, contact us.


The Power of Vision

By Bill Dann, BoardGrowth Founder

In a chance encounter the other day, a quote was shared with me that stirred up thoughts about my experience with the power of compelling visions in organizations. The quote was from Walt Disney, who said, “If the vision is clear, the decisions are easy”. Disney’s innovation and success are testament enough to the truth. I looked over the several hundred strategic plans our company has completed and asked myself if this rings true for me. Well, it does, and here are some examples.

The power of a compelling vision
Years ago I worked with a highly successful string of natural food stores in Southern California whose management had stalled out. Lacking a vision of the future, both store and middle managers were becoming a bit disillusioned. They had left the big chain stores because of the opportunity they saw with this growing company. However, that opportunity seemed to be fading. There was no sense of future.

I worked with the board and top management, and we created a very compelling vision of national growth. When the vision was announced to management, the energy in the room dramatically shifted, and the group went to work on detailed plans. That next year, the company had its best year ever.

In another instance, I worked with a regional native corporation in Alaska that also was stalled in its performance. Again, the board crafted a very aggressive vision in partnership with its CEO. The CEO, being very competitive as many CEO’s are, immediately announced that though challenged, he would blow them away by achieving the 20 year vision well ahead of time. Indeed, he did.

And I could list numerous other examples from our clients’ visions.

Why this works
My take is that we human beings typically respond to challenges well. Tell someone you doubt they can get there, and they will amp up their productivity to prove you wrong.

So, Disney is right…and then some. It is not just that the decisions become easy, the work takes on greater importance. On several occasions, I have seen CEOs and boards immediately respond to a compelling vision by literally saying, “we need to get to work”.

The fear of failure or desire to reach the goal compels them to actions that they haven’t taken before.

To illustrate, the following quotes were statements I heard in response to first hearing of the vision defined by a board:

    “Management, you need to bring us back a set of measures that will tell us we are making progress.”
    “If that is what the board expects, then we better get moving. We aren’t going to get there with the performance we have had of late.”

From within the board itself, a clear vision and sense of purpose can be the key to unlocking your board when you are stuck on a decision before you. Simply ask yourself, would a “yes” or a “no” best serve the purpose and vision of the company? If the decision is not aligned to the purpose and vision, it may be prudent to vote “no”.

How to move forward?
The first answer is obvious, do you have a vision? And following on that question’s heels, is that vision so challenging that there is some anxiety that you won’t make it? James C. Collins and Jerry I. Porras call it a “BHAG” or “Big, Hairy, Audacious Goal”, in their outstanding Harvard Business Review article, Building Your Company’s Vision. If your vision is just at the edge of what you think is doable, then you have it right.strategy

After you have a good “BHAG-type” vision, ask if it is strong enough to compel staff to action. If it isn’t, then it won’t have the effect of galvanizing effort.

How do you know? When I am facilitating strategic planning sessions, having done this countless times, I can feel it. When the board is satisfied that they think they have it, and I know they don’t, I will turn to the CEO and ask, “will that vision excite the troops?” If the answer is “no”, then I tell the board they need to keep working. They need to start a dialogue with the CEO regarding what would excite the troops.

If you sense that your company needs a jump start, defining or revisiting core ideology is the strategy to correct this. Go through these questions in an honest exchange with your CEO, and then recharge your company if needed.

If you would like a copy of the Collins and Porras Harvard Business Review Article or information on how we go about getting this defined for companies, contact us.


The Importance of Organizational Metrics

By Bill Dann, BoardGrowth Founder

Two classes of mistakes

W. Edwards Deming, the statistician who was the father of the continuous quality improvement effort, opined that there are two classes of leadership mistakes; 1) making a decision or change when you shouldn’t, and 2) not making a decision or change when you should.

But how do you know if you are making such a mistake?  Deming urged that to avoid an error, you must have trend data that measures the performance of the key systems/processes in your organization over time. Then once you have the data in place, you need to understand how to analyze it so that you can accurately interpret what is happening in the systems and processes you are measuring.

Deciding what to measure


The first step? Determining what measures will give you a clear picture of the health of your organization and the performance of the key processes. What is your value proposition, i.e., what value are you promising the customer in exchange for their business?  What are the essential processes in your organization which assure that the promised value is delivered exceptionally well every time?  Do you know if your customers are satisfied?  Your employees?  Do you have the funds needed to stay in business and grow?  The answers to these questions and others make up a group of measures we refer to as an Instrument Panel.

Along with providing information individually on key systems, the Instrument Panel measures also work together to depict essential cause/effect relationships in your organization.  For example, an aggressive marketing campaign should result in increased inquiries or sales.  Tracking both your outflow of marketing and the inflow of sales/inquiries can show you which marketing efforts are creating the biggest impact.

The measures on your Instrument Panel should give you a broad spectrum look at your organization, i.e., it is not simply a compilation of your financial statements. Good measures bring to life what might otherwise be difficult or impossible to see, allowing the board to monitor the effectiveness of the organization’s strategy.

How to analyze your measures

The root of the two mistakes mentioned in the opening paragraph? In Deming’s mind, they are rooted in management reacting to point-in-time vs. trend data, i.e., reacting to an unexpected outlying data point on your Instrument Panel rather than considering the data over time.  Trend data enables you to evaluate whether outlier data is the result of a one-time event or whether there is a stable, or what Deming called “structural”, change in the system/process.  His rule of thumb is that you must have at least three data points heading off in a new direction before you can really judge that something has shifted in performance enough to warrant attention.

An example of point in time data is the financial report given to you at each meeting. Most boards rely heavily on this data to evaluate whether operations are going well. But financial reports alone can be a dangerous source for your decisions. They tell you only the financial condition of the company at a given point. Deming asserted that managing your organization by looking at the financial data is like driving your car looking at the rear view mirror. You know where you have been but have little idea of where or when you will end up.

Boards should learn from the past, but focus on trying to influence the future.  That is why reacting to data without proper analysis can be dangerous.

What to do with a structural change

If you have determined that you have a structural change in the system/process that warrants attention, your first task is to isolate the  source(s) of that change.  It could be something simple, such as improved sales because you changed a dress code policy.  Or, it could be something complex such as more web-site traffic and sales because you modified the key words, structure, titles and offerings on your web-site.

The task for the board at this point is to decide whether the change in performance and the cause warrants a change in policy.  What do I mean by policy?  Changes in how you use your resources (budget) to invest more in what is working or stop investing in what is not, change in process, change in use of personnel, delegation of authority to be able to act more quickly, etc.

Staff should bring to you an evaluation of the data and a set of recommendations for changes in policy based on their analysis:

What to do next

Intrigued, but not sure where to start? We can help. Contact us, and we can work with you to determine what measures are valuable for your unique organization, as well as how to display and interpret them, creating your own Instrument Panel.


The Importance of Venue

By Bill Dann, BoardGrowth Founder

I am often asked, “should we do our strategic planning away from the office?” I almost always answer yes.

To stay put or move off–site

There are times when moving out of your regular boardroom environment enhances the meeting as well as the results you achieve. Getting away from the office or boardroom setting is important when you are doing strategic planning or having a retreat on a major question that requires a different level of thinking or innovation.
However, routine board meetings are often best done on site. You have access to documents, staff can be available on a short notice, your meeting table is set up to accommodate discussion back and forth on issues, etc.. You establish patterns in that space and often those patterns can be healthy and productive.

Why a change of venue matters for planning and innovation

Can a change of space really make that big an impact when doing planning or innovative work? I firmly believe it does, and this is why:

  1. Strategic planning is about defining what changes are needed to meet a changing future. If your venue is full of memories and artifacts of the present way of doing business, it is best to get away from it.
  2. You can interject new thinking by having the venue be close to one of your existing operations, putting you closer to your customer and what he/she is experiencing.
  3. Strategic planning should be about dialogue or discovering the common truth through circular vs. linear communication with one another. If you are used to discussion or win-lose debates in your existing board room, that room will not promote the kind of “out of the box” thinking that is needed for planning a future.
  4. Your strategic planning session or retreat is an opportunity to show appreciation for the time and effort board members contribute. Spoil them a bit in selecting your venue.
  5. Getting away affords opportunity for social interaction after the sessions. These interactions can break down long standing deadlocks between members and again foster a new future.


To enhance your planning sessions and the results you achieve, try a new venue in the new year. Getting away from the trappings of the present shows you are serious about creating a new future.

I always enjoy hearing from you. Drop me an e-mail at


The Synergy of Three Key Tools

By Bill Dann, BoardGrowth Founder

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 synergytool 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 it presented live to your board at your next meeting.


Root Causes and Solutions to Micromanagement

By Bill Dann, BoardGrowth Founder

Micro-management is chief among complaints of CEO’s about their boards and can have a substantial negative impact on morale, productivity and CEO retention.

So, what are the root causes and how do we solve this?

Many consider the root cause to be lack of clear understanding of board vs. management role. Although this is often a major contributor, I have seen many boards once trained on role to continue micro-management. Thus, there must be a root cause that lies below. If your role is not clear to you, however, micro-management is a likely outcome.

So, what lies below not understanding roles?

The Diagnosis

Lack of trust or fear of failure: This can stem from personal disasters of directors, former crisis for the organization, eroding trust in management or the fact that negative politics is playing well to those electing directors, i.e. politics.

Lack of effective tools for fueling true role: Boards know that they need to control something and do something. If they lack effective tools to set direction (plan), establish clear rules (set policy) or understand the true condition of the organization (evaluate), then they will engage in what I call, “miscontrol”. That is, they will control the wrong things.

For example, not knowing how to set or affirm strategy, the board will defer to management and instead control who gets to go to training or what kind of vehicle should be purchased. Not understanding financial statements and ratios, the board will micro-manage the budget. Not having data or understanding trends that determine the future of the organization, the board becomes fearful of supporting change.

Lacking good tools, the board has essentially abnegated true control of the organization to management. The board has substituted micro-management for leadership.

The Cure

  1. For lack of trust or fear: The cure is communication. Make the unknown known to the extent you can. This means management clearly communicating the impact on the organization of this fear, respecting that it is a normal reaction to past crisis or lack of knowledge and then working with the board to design solutions. Solutions will come in the form of improved communication and better governance tools.
  2. Lack of effective tools
    1. Effective strategic plan and plan monitoring system: Planning is the tool for controlling the future. Setting direction is the foundation of sound governance. But you must monitor results against plan and take corrective steps as needed.
    2. Clear, comprehensive set of board policies: Your expectations about service delivery/product quality, your financial parameters, your reporting requirements, authorities of committees and CEO, standards for evaluation, standards for considering new investment, etc. etc. all should be contained in a single set of board policies. Of course, you have to monitor adherence but making clear the rules, i.e. your expectations, will relieve your anxieties about what may or may not be happening inside the organization. It puts you in control, or leading vs. managing.
    3. Trend data with which to evaluate performance: Financial data tells you what has occurred. You need to get a handle of what will occur and proactively respond to it. The key here is what we call an Instrument Panel (referred to in the literature as Balanced Scorecard). It should contain measures of progress toward vision, customer satisfiers or key results and core processes that drive both the satisfiers and the vision.

These three tools, if done well, will put you in greater control of the future vs. only reacting to what you have learned from what has already occurred. It will also relieve your fear of the unknown and ultimately cure the ills of micro-managing.

Questions? E-mail us – we would be happy to help.