Governance Reboot in 2016 is Necessary
You have an ineffective Board of Directors and they know it and ask for help! This is the perfect opportunity to re-engineer decision-making in your organization and increase nimbleness and innovation. Focus on outcomes in the process and you will be better off than discussing the “same old, same old” issues that have been talked about for the past 20 years in fixing the governance issue.
How do we avoid looking at just the term of office, term limits, roles of board and staff that is discussed, blogged and written about over and over but go beyond and challenge our thinking about an innovative structure that is dynamic and nimble? Here are some key ways to review your governance structure and make that change happen:
- Cure the disease and not the symptoms– It is easy to attack a specific area of trouble such as the role of the board and what it should be doing and then applying a nice helping of training. I challenge you to go deeper and still understand that training is important but the root of the problem may be your board makeup, the limits placed on the board to make timely decisions or even outside influences affecting the board’s performance. Identify what these issues are and work to effectively attack each area to treat the entire problem not just bits and pieces which effectively put a band aid on bigger issues
- Assess your board– It is easy to pick out key issues during a board meeting discussion and say that these are the root of the problems in terms of the governance structure but how many board members will be 100% open during an open forum such as this? It is intimidating and they are talking about themselves. No one wants to admit being dysfunctional! It is still good to vet this in an open forum but put in place an annual board assessment tool and start there first as the basis of the discussion. An assessment will quickly identify key areas of need and will also allow board members to provide confidential feedback that will even provide further insight. Use this and dedicate a single-topic board meeting to this issue and map out changes that will take place based upon the discussion
- Where are the broken “branches” in your decision tree– The board assessment is just one tool. It takes a lot of work to make any decision-making group more functional. In order to understand the issues, you need to understand how decisions are made. Go back a year or two in your organization and document each decision, the speed at which the decision was made and how effective the result was. In another column, have the board fill out a statement as to how this decision would have been more effective or painless had it been done more efficiently, etc. You will start to quickly see where the “decision tree” has some broken branches. It is so important to look at your decisions and identify the issues that either a) slow them down, b) where there isn’t enough data, c) where your organization was not timely enough to respond to an issue and d) where “red tape” is getting in the way of a nimble organization
- Outcomes– We talked earlier about evaluating the decision making process within your organization. More importantly, once that is fixed, evaluate the outcomes of those decisions. Outcomes are directly related to the people you have sitting around your board tables. So, when you evaluate your “decision tree”, also make notes of the outcomes of those decisions and determine if they could have been better if you had the right people in the right seats at the board table. As we know, you could have truly passionate people around the table but if they don’t have the core competencies as a board member, then changes need to be made. I know that I have a true passion for Apple products but I don’t think they will put me on the board any time soon. Understanding that passion is one element of a good board member but competence is just as important or even more important in generating outcomes
- Make tough decisions– From the beginning of starting the process of reviewing governance effectiveness, it is important for the board to accept and make tough decisions that will impact every position on the board all the way down to committees and to a house of delegates structure, etc. If the board is not embracing the fact that change may be more than just iterative (safe) but truly evolutionary (difficult), then change will not happen. In the beginning, be sure that the mindset is to make evolutionary change or otherwise it will be a very diluted, status quo process
I have heard on more than one occasion a nonprofit leader or staff member say that either another for-profit or nonprofit organization is “eating their lunch” and taking away their market share. I ask why and every time they say, “we are not responsive enough, we are not nimble enough, we don’t understand the ‘voice of the member’, etc.” One comment that truly stood out was what one board president said to me, “the structure of our governance is no longer effective and I believe that one day we will be ‘out of business’ if we don’t make a change, unfortunately we know that change will ‘ruffle feathers’ and that is standing in the way of doing what is right.” If we look at governance through the lens of outcome driven decision-making, we can then engineer a governance structure that supports innovation, member value focused benefits and the nimbleness to stay competitive. The board needs to be on “board” to make change happen and not worry about “ruffled feathers”. There is no other way than getting a strong commitment from the board. This is the first challenge to overcome and once it is, the possibilities for the organization and its members are endless.