Being strategic: what it takes for a board to plan - and make decisions - strategically.

Too often I've watched the enthusiasm and energy of a board of directors wilt into confusion and subsequent paralysis, despite the existence of what might look like a solid association strategic plan. It takes less than a full board meeting to uncover such deflators to commitment as these:

* The criteria for success are not clear.

* The only specific outcomes in the plan are financial.

* The board has not defined what it means by leadership in the industry.

* Board members express conflicting views.

Who wouldn't be confused in this kind of environment? You find yourself wondering, "How can we as a board make informed decisions when the information presented isn't related to agreed-upon outcomes?"

You can't. And that's why I'd like to address what has to change and what has to be in alignment, as it were, so that boards are able to provide value to their constituencies. Let's start with the basics.

Creating value

Associations exist to create value for those individuals who voluntarily join the organization. People, businesses, or organizations join associations to satisfy their needs and to get assistance in solving their problems. Associations are governed by a board of directors whose basic functions are to

* approve the outcomes the association is to accomplish;

* ensure that resources are available and used efficiently to achieve those outcomes; and

* make sure that the desired outcomes are being achieved.

In essence, then, the board's primary responsibility is planning strategically - a responsibility that includes setting the strategic direction of the association, allocating resources effectively and efficiently, and evaluating the progress being made to attain the results.

Today, strategic planning is increasingly being carried out in a chaotic and unpredictable environment, which presents the board with challenges it frequently is not adept at handling. Living with uncertainty and making decisions in the context of ambiguity require a degree of both flexibility and foresight that is inconsistent with the way in which most associations operate.

One can no longer even conceive of making straight-line projections; instead association boards must have a nonlinear focus that will enable them to position the organization to take advantage of multiple opportunities while never being certain of the outcome of any one direction. Furthermore, innovation - the capacity, to re-conceptualize programs, services, activities, and structures that currently exist - is a necessity because of both the expectations of members and the exigencies of an ever-changing external environment.

Moving into uncharted territory 

Both individually and as a group, the board needs to be able to leave behind old paradigms of thinking, feeling, and acting to move into somewhat uncharted territory. While they frequently see themselves as change agents for the organization, boards often fail to understand exactly what that means. The very nature of decision making in an association is fraught with tensions, occurring in an atmosphere burdened by structure and carried out by a group of volunteers elected and presumed to be representing the views of a constituency.

In addition, one of the greatest barriers to association success in the future is the very real, human need for safety and the tendency toward risk-aversion. It is, however, these very characteristics that can limit the ability of the association to succeed in the future.

Together the chief elected officer and the chief executive officer (CEO) need to continually help board members understand that in addition to exercising their own creative impulses, they need to operate as the stimulus for risk-taking by the chief executive officer and the staff encouraging, urging, and prodding change rather than pushing forward and pulling backward. While boards often present themselves as visionary, they diminish the possibilities of success by not carrying through on implementing their visions. The board must commit to

* clarifying the outcomes;

* demonstrating confidence in and support of the CEO's capacity to carry out the strategies needed for forward movement; and

* promoting an environment for constructive and progressive evaluation.

The board must remember that the organization exists to provide value to a constituency, not to serve the needs of either the board itself or of the staff. In light of that, and of the need to be innovative and to uncover and seize the opportunities that will enable the organization to successfully serve its constituents, the board must

* create opportunities to hear new voices;

* cultivate a partnership with the CEO that supports innovation and encourages personal, professional, and organizational growth;

* agree on a core ideology and a vision of the future and ensure that the organization is driven by these shared agreements;

* develop a continual process for strategic thinking and knowledge-based decision making;

* understand clearly the current and potential needs, interests, and preferences of members, potential members, and customers (remembering that in today's world, because membership may be an elusive concept, we must begin to think of members as - first and foremost - customers, users, and beneficiaries of the association's programs and services);

* regularly examine and incorporate into its thinking, planning, and positioning both the external realities that affect constituents and that may ultimately affect the association's existence, and the strategic position, competencies, and capabilities of the organization;

* create a culture of trust that fosters inclusiveness and consensus-building and that balances risk and responsibility; and

* make timely critical decisions with the knowledge available.

The remainder of this article provides insights into how boards can operate effectively given the need to plan around a continually moving target of the future.

Hearing new voices

Among the challenges association boards must confront today is the reality that the constituency of the future will be quite different from that of the present. With the demographic changes that will take place in the United States during the next 20 years and in business and professional subgroups within our society, boards must ensure that they hear the voices of these subgroups.

Traditionally, boards have engaged in a phenomenon that Rosabeth Moss Kantor, author of Men and Women of the Corporation, has called homosocial reproduction - that is, the tendency to surround themselves with people just like themselves. While they frequently make attempts at diversification, their efforts are likely to be sporadic and frustrating for the one or two individuals who are tokens.

It is the responsibility of leaders to identify, cultivate, mentor, and promote their replacements. Therefore, it is critical that associations understand the motivational factors that inspire different age, gender, and ethnic groups to seek leadership roles, along with the barriers - both real and perceived - that limit access to leadership. Out of that analysis will come a new understanding of organizational leadership development and new efforts to recruit and integrate different voices into the leadership structure.

An integral part of this process involves a board self-examination to determine the role of politics within the organization. One of the reasons that individuals opt out of leadership is their dislike for the negative interpersonal dynamics involved in organizational life.

The superior volunteer leader of the future sought after by everyone will seek those opportunities where his or her skills and expertise are valued and used. Boards need to examine the degree to which power and politics influence who rises to leadership positions, find ways to minimize this influence, and maximize their focus on the association's vision and mission.

A partnership relationship with the CEO

The innovative board views its relationship with its CEO as a dynamic partnership and creates both an environment and attendant processes that support innovation and encourage personal, professional, and organizational growth. A significant element of this partnership relationship is the development of clarity around expectations, particularly those related to accountabilities.

The board also needs to establish an effective dialogue with the executive that focuses on both individual and organizational achievement and development. In addition to the specific strategic objectives to be achieved by the organization, the board and the executive need to agree on criteria for success that are intangible.

Although the board delegates all management responsibilities to the CEO, it does need to assure itself that the executive's philosophy and style of management are consistent with the board's core values around managing people. The achievement of strategic plan objectives is only one way to determine this. Therefore, board members need to identify other criteria that will give them information about the more intangible aspects of the CEO's management without their being actually involved in management issues themselves, such as expectations around communication and staff management issues.

Because boards typically have difficulty giving clear, sensitive, and forthright feedback to their executives, they often fall back on quantitative rating systems that focus on the negatives rather than on developing a relationship that focuses on success. A systematic approach to performance evaluation that emphasizes constructive feedback will have a positive and synergistic effect on organizational success.

Finally, as we describe the elements that constitute planning and positioning strategically, it is essential to remember that the CEO is an integral part of the process. Although the CEO is typically a nonvoting, ex-officio member of the board, he or she has the same responsibilities as other board members. However, while the board is accountable for determining the strategic direction of the organization, the CEO is accountable for ensuring the existence of both the processes and the knowledge base needed for effective board decision making and staff implementation.

Agreement on a core ideology and vision

Articulating the core values and core purpose of an organization is a critical precondition to the organization's ability to successfully position and reposition - itself strategically. Agreement on fundamental values described by James C. Collins and Jerry I. Porras in their article "Building Your Company's Vision" (Harvard Business Review, September-October 1996) as those "which will not be given up or compromised, even if circumstances changed and there were penalties for holding the values" - enhances the board's ability to make difficult decisions at critical times. While engaging in the process of articulating and agreeing on the values may seem easy, the real test comes when the board is confronted with having to make choices. Therefore, during the struggle for agreement on the values, hypothetical choices ought to be raised to test the strength of the commitment.

The experience of creating shared agreements on values and mission is as important as the decisions about these issues themselves. The process creates a bond among those participating, which contributes to the board's ability to act as a team.

Since core ideology is expected to be unchanging, the fact that the composition of the board changes with some regularity presents a dilemma for the organization. Therefore, the recruitment and orientation of new board members must encompass processes that ensure the continuation of shared agreements.

These concepts need to be described in depth to prospective board members. Comprehensive discussions of core values and purpose must also become an integral part of the orientation process. These are essential preconditions to the board's ability to remain value- and mission-driven.

Describing a vision for the future - how the world will be different as a result of what the association does - enables the association to focus its energies and activities on achievable outcomes. While the core ideology will remain unchanged, the organization's vision does change. This vision ought to be achievable within a specific time frame, after which a new vision will be created. This is the essence of direction-setting. Progress toward this ultimate outcome, as well as the strategies that will move the association in this direction, must continually be assessed to ensure maximum flexibility and the ability to adapt to changing realities.

A continual process

Thinking and planning strategically must be ongoing. No board can afford to sit back and relax once it approves a strategic plan. Instead, the board and the CEO must have an expectation of and a process for constantly addressing the strategic issues that will inevitably arise. Board meetings should be focused on areas related to the organization's vision and goals, as well as progress toward reaching those milestones established as objectives in the strategic plan. This process needs to be incorporated into the board's modus operandi and become a behavioral norm, since only through this mechanism can the board expect to be prepared to anticipate and act on the unexpected.

The basic elements of this process revolve around the responses to four key questions:

1. What are the needs, expectations, and preferences of our members, potential members, and customers?

2. What is the strategic capacity and position of our organization?

3. What are the external realities that affect the marketplace of our members and our own association?

4. What are the ethical implications?

Understanding needs, interests, and preferences

By virtue of who they are, association leaders typically are very far removed from the majority of their members, potential members, and customers. Thus, it is incumbent upon them to have a constant stream of information about the membership. There are many different tools and techniques for acquiring this information - formal research, focus groups, visits to constituent groups within the organization, and individual qualitative discussions with members and potential members. Once the data are accumulated, presented, and discussed, it is essential that the board incorporate the information into decision-making processes. In other words, board members need to listen to the messages, setting aside their individual preferences and focusing instead on those of their constituents.

At the same time that they are listening, board members must also contemplate what their constituents will want and need in the future. This presents an extraordinary dilemma because the board must operate simultaneously in the present and the future.

Resolving this requires building and maintaining an ongoing knowledge base. The benefit, however, is that this knowledge base facilitates decision making about potentials and possibilities.

Examining external realities and strategic positioning

Concomitant with understanding constituent needs, board members must incorporate into their thinking, planning, and positioning the external realities that affect their constituents and that may ultimately affect the association's existence. Most associations are familiar with the notion of environmental scans, since they generally used this data in developing planning assumptions. However, given the nature of change today, this must become an ongoing board activity.

Providing the board with information about demographic, economic, social, political and technological information, and trends that can be anticipated to impact the organization and its constituents is a critical element in the board's ability to make appropriate and knowledge-based decisions. Discussing and absorbing this information needs to be on the agenda of every board meeting.

In addition, the board must continually assess the strategic position of the organization, as well as its resources. By this I mean both the financial resources and the human capital available. An organizational analysis that includes determining the competencies and capabilities of staff and consideration of alternative strategies for filling gaps that exist will provide both the CEO and the board with information needed for decision making.

A culture based on trust

The association's leadership - both the board and the CEO - creates and maintains the organization's culture. Culture refers to the values and behaviors that are rewarded; the informal structure and processes that guide or influence what people do and how they do it; and the climate in which individuals are motivated to perform and that affects their attitude about involvement and participation.

An enabling culture is one that fosters inclusiveness, consensus-building, and, most of all, trust. It is one that balances risk and responsibility. When volunteer leaders operating within that environment understand the norms and are able to fit into established boundaries and expectations, the board's ability to move an association forward is greatly enhanced.

Making critical decisions

The final step in this process of accumulating and integrating knowledge is making the decision itself. Because of the nature and multiple layers of association structures, decisions often take inordinate amounts of time. The results can range from opportunities lost to a blurring of accountability. Somehow, boards must ensure that they have the knowledge they need, have considered their options, and have communicated with the constituencies affected.

The reality, however, is that boards will never have all the information they need, nor the assurances that they are making the right decision. Instead, at a given point, they will have to use what we call "informed intuition" and take a risk, making the decision in a timely manner.

While there are no guarantees that the outcome will be as they wish, the board and the GEO must ensure that there is integrity in the process. The board that is able to integrate the processes, techniques, and behaviors described in this article will be positioned to make the best possible decisions.

RELATED ARTICLE: Does Strategic Describe Your Board?

* Does the board balance present needs with future opportunities?

* Does the board focus on creating value for members?

* Does the board communicate with authenticity, hearing different perspectives and effectively integrating these into decision making?

* Are there clearly stated, agreed-upon indicators for success?

* Is there a partnership relationship between the board and the CEO?

Elaine Kotell Binder, CAE, is a principle partner of Tecker Consultants, Trenton, New Jersey, and president of Binder Associates, Bethesda, Maryland. E-mail: [e-mail]