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The board's role in leading strategic change.

One of the key characteristics of "high-impact" governing boards--for telcos, hospitals, universities, national associations and other nonprofit and for-profit organizations--is that they concentrate, above all else, on their governing work. So what does it mean to "govern?" Governing a telco means to play the leading role--in partnership with the general manager and senior managers--in continuously answering three fundamental questions, thereby determining the shape and course of the telco:

1. Where should the telco be headed, and what should it become over the long run?


2. What should the telco be now and in the near future?

3. How well is the telco performing--in terms of customer service, market share and financial results?

Answering the first question takes the telco's board, general manager and executives into the challenging but high-opportunity business of leading and managing strategic change. Fortunately, recent advances in the field of planning can help your telco succeed in meeting the never-ending change-challenge, while also taking full advantage of your board as one of your telco's most precious resources.

The Change Imperative

We live and work in a world experiencing dizzying change; never in human history has change been faster and farther reaching. Your telco, like all other organizations and institutions, has a choice in today's challenging world. You can build the capacity to actively and creatively lead and manage your telco in response to the changing world around you, fashioning and executing strategies to capitalize on opportunities and to avert threats.

Or you can circle the wagons in hopes of protecting your telco's status quo from the changes swirling around you. The siren song of comfort and security may tempt people to go on the defensive in the face of change, but you know there really is no choice.

A telco's long-term survival and growth depend on its mastering the change-challenge; merely defending yourself would be a recipe for sure decline, and perhaps even extinction (and few industries are experiencing more significant change than telecommunications). Unfortunately, traditional strategic planning for arbitrary periods such as three and five years, has proven to be a bust in terms of leading change. In recent years, however, a variation on the broad strategic planning theme, intended to deal explicitly with strategic change, has been developed and tested: the Strategic Change Portfolio, which helps involve a telco's board creatively and proactively in leading strategic change.

The Portfolio at a Glance

The strategic Change Portfolio essentially is a "holding pen" for strategic projects, often called strategic change initiatives, which have been developed to address particular strategic issues that an organization's board and CEO have selected for immediate attention. Each of these initiatives, or projects, consists of the business goals to be achieved, implementation strategies and the implementation revenue/ expenditure budget. At any given time, the strategic change initiatives in the portfolio will involve a range of time frames.

For example, Initiative A--adding multichannel video and entertainment services to the telco's service mix--will require 18 months for implementation; Initiative B--launching automated directory assistance--will require nine months; and Initiative C--restructuring the board's standing committees--will take six months. As initiatives are implemented, they move from the portfolio to mainstream operations, and new initiatives take their place as new strategic issues are identified and selected.

The real benefit of the portfolio approach lies in its focus on a small number of issues upon which the telco's board and general manager have decided. These issues: 1) demand attention now, because of the stakes involved and the prohibitive cost of deferring action (especially losing out to a competitor in meeting a dramatically growing customer demand in the service area), and 2) cannot effectively or safety be handled through the mainstream operational planning/budget preparation process. The governing rule is, if an issue can be addressed effectively through the annual operational planning process, it should be.

Following are the steps involved in developing the portfolio:

* Update your telco's detailed business vision for the future, in terms of its core values, its long-term growth and profitability targets, and its range of customer services.

* Identify major issues in the form of challenges and opportunities by scanning the external environment and assessing internal strengths and weaknesses; an issue is defined as: an opportunity to move closer to your telco's vision (for example, growing demand for entertainment services), or a challenge standing in the way of movement toward the vision (for example, the need for extraordinary capital financing).

* Select the issues that are strategic enough to merit attention now.

* Fashion the strategic change initiatives to address the selected issues.

The Gold Standard

Two compelling reasons dictate that the telco's board be involved in a creative, proactive fashion in the Strategic Change Portfolio process, making it the gold standard for board participation in the affairs of the organization:

1. Your telco board members are uniquely qualified to participate in the process of identifying and selecting strategic issues, which benefits from the diverse experience, expertise, knowledge and perspectives that board members bring to the table.

2. Psychologically speaking, your board's creative and proactive involvement in such a high-stakes, high-impact process is one of the surest ways to build board member satisfaction and commitment. Indeed, leaving your board on the periphery of the action in the portfolio process is a sure-fire way to breed frustration and erode commitment among board members.

Organizations, including telcos, that have realized the strongest return on their board members' involvement in the Strategic Change Portfolio process--in terms of both leading and managing strategic change and board member satisfaction and enthusiasm--have involved their board early in the process in updating the organization's vision statement, and identifying and selecting the strategic issues to be addressed. Once the issues have been selected, the process of developing the detailed action strategies that make up the initiatives essentially is a staff job.

A common, effective approach is for the board to meet with the general manager and executive managers in an annual retreat (sometimes called strategic work session), at which a rough cut of the telco's updated vision statement is generated, a preliminary set of strategic issues are brainstormed, and possible strategic change initiatives are discussed.

The board's planning committee, working closely with the general manager and executive team, then can follow up by fine-tuning the vision statement, which subsequently is adopted by the full board, and by analyzing and refining the list of strategic issues, which eventually is approved by the board. From this point on, detailed development of the strategic change initiatives is handled by the general manager and staff members, perhaps with some consulting assistance.

In today's world, your telco can either take charge of its own strategic change, involving your board as a leading participant in the process, or it can pay the price that comes from being changed by the forces around you. There's really no choice if you are committed to your telco's survival and to meeting your customers' changing needs.

Doug Eadie is president of Doug Eadie & Co. in Palm Harbor, Fla. This article is based on two programs that he presented at NTCA's 2004 Annual Meeting in Miami Beach and draws on chapters 3 and 8 of his newest book, High-Impact Governing In a Nutshell: 17 Questions that Board Members and CEOs Frequently Ask (ASAE 2004). He can be reached at
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Title Annotation:Business Matters
Author:Eadie, Doug
Publication:Rural Telecommunications
Geographic Code:1USA
Date:Jul 1, 2004
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