Whether you’re setting up a new Board to steer the success of your business for the first time, or working with established Board Directors, you’ll know that they often face frustrations in providing effective guidance.
The board is there to advise and direct the business, but often they are blocked from doing so, and it’s not clear why. It would be easy to point the finger at an individual, performance metric, or at a strategy that appears to be wrong but to get to the root of the problem you need to dig deeper.
Board Director Frustrations and Secrets to Overcome Them
1. Where is the company going?
Other than aspirational visions and setting number targets for revenue, profit, or customer growth the Board Directors are often unsure of the direction of the company.
What will things look like in the future – people, locations, markets, products, and customers? Often, where there is this lack of clarity there are constant changes to company direction and the board is unable to make the impact they know they could.
Put in place goals for your company that will deliver the needs of all your stakeholders and that are written in tangible terms all Board Members understand. Having a crystal clear picture of your company’s future acts as a guiding compass for your Board.
2. There is no structure to support decision making
Discussion around the Board room table frequently revolves around proposed solutions such as a new market entry, a new IT system, or another magic bullet with no reference to the outcomes they are trying to achieve.
Board discussions on specific proposed solutions limit the opportunity for debate and development of truly innovative approaches which change the company and accelerate growth. Failed solutions are a frequent source of frustration and blame and often consume significant resources before their failure is realised.
Identify the broad outcomes you need that will deliver your company goals rather than solutions that may or may not deliver. This better manages Board Director expectations and allows them to contribute to how the outcome will be achieved, rather than simply commenting on someone else’s solution.
3. Siloed thinking at Board level
Board Directors are brought in because of their expertise in specific areas, but rigid responsibilities focused on specific areas, restrict them from applying their expertise more broadly across the company. As a result, silo thinking at Board level restricts creative thinking and synergistic opportunities are missed. This leaves Board Directors frustrated that the same challenges they deal with at an operational level are the same at Board level.
Make the company’s goals and broad outcomes needed to get there, the focus for Board Directors. Remove unhelpful departmental terminology and encourage everyone to work together, pulling on their individual strengths, to find faster, easier and cheaper ways to the company’s future.
4. Board Directors are dragged into operational detail
You have appointed your Board to take advantage of their strategic vision. However, all too often the Board is dragged into operational detail that is a waste of their time and expertise. Directors are often only too willing to show off their specialist knowledge (or just lend their opinion) even where there is no need for them to be involved in operational discussions.
Have a one-page plan that is 100% focused on the company strategy and is used as a central focus for all Board meetings. All Board discussions are driven by, and contribute to this document, and coupled with a strong chairperson, this will keep the conversation at a strategic level.
5. The financial projections are pointless
As the CEO takes everyone through the projections questions start to come in. The CEO fields them and tries to justify the numbers, but there is a seed of doubt. Whether the projections are low (so the CEO hits their bonus), middle of the road (so the Board is comfortable), or pie in the sky (it happens!) there is no conviction to the numbers. It feels like a paper exercise to the Board Directors and does nothing to contribute to the strategic direction of the company.
Look at the future of your company and ask “what will that be worth” when you get there. Identify the drivers of value for that future and use simple but effective approaches like Fermi estimation and four-point models to also capture the intangible and unquantifiable items. This gives you projections that show the story of how the money will happen and gains consensus from all parties.
6. A plethora of operational reports
Board papers issued in advance of the meeting often cover the minutia of the business along with the usual compliance accounts. Board Directors glaze over very quickly or focus on point improvements within their area of expertise.
When it comes to the meeting the conversation explodes as everyone tries to add their tuppence to improve the company’s operations. The Board has become yet another operational meeting, not the strategic forum it should be.
Within your one-page plan, have detailed descriptions that describe when stakeholder needs have been met in the future. What would show this and what would the impacted stakeholders say? Identify the “islands of change” that show progress towards this and get really clear on what you will see and hear when the stakeholder needs have been fully delivered.
7. Poor communication between Board and Management
So often what is discussed and agreed upon at Board Level does not get implemented by the management. Whether it is misunderstood, not prioritized or simply ignored, it does not happen and the same discussions are repeated at the next Board meeting.
Your one-page plan is not just a boardroom tool. The direction agreed by the board should naturally flow down into management meetings and team communications. This document should be a daily focus for everyone, give direction for all projects, and be integrated into work programmes and action plans. By integrating this strategic plan into day-to-day operations, progress against the plan can be clearly communicated back to the Board.
A Board of Motivated Directors
Put these things in place and it will transform your Board. Your Board Directors will be able to contribute their expertise, make a difference, see progress and feel valued.
These changes will establish a high level of trust between the Board and the management creating a healthy working relationship that gets things done that really matter.
If you are a Board Director or CEO and wish that you had the direction, structure, and tools to effectively carry out your role and run your Board, please get in touch for a demo to see how you can do just that.