Five Questions to ask About Your Strategy
Strategy is one of the board’s most important areas of responsibility: from setting the way forward, to monitoring its achievement, to reviewing and updating it.
Many smaller boards fall in to the trap of spending their meetings looking at the here-and-now and the immediate past (e.g. the past month if you meet monthly). It’s OK to have this immediate snap shop, but do you understand how that information relates to the bigger picture?
If you’re feeling like your board is too focused on the present and short-term future and you’re not quite sure what you’re all working towards, perhaps it’s time to ask the following questions about your strategic plan.
1. Do you have one?
Yes, I know it’s hard to believe, but there are indeed many organisations that function without a formal business plan or strategy in place. In those instances, I wonder what exactly the board is regularly coming together to achieve. I would imagine that asking the question “what does success look like to you” would garner overwhelming silence, or a mixed bag of answers (I’m not quite sure which is worse).
Having a formal strategy is something that is encouraged in all organisations across all industries. Even businesses that appear quite straightforward and single-purpose can benefit from having a clear path forward.
One of the board’s most important roles is to approve the strategy. In some organisations the board is also quite involved in setting the strategy – providing perspective, expertise, and broad thinking to the strategy process together with senior management (who bring the day-to-day operational practicalities to the conversation).
Whichever way your board chooses to approach it, I encourage you to have a plan for the business. At the very least so that you can articulate what success will look like in the future.
2. Are you measuring the right things?
What gets measured gets done. Once you have the strategic objectives set, it’s wise to have measurement mechanisms to track the organisation’s progress to goal achievement.
What you measure and how you measure it is up to the board to decide and agree on. Find a process that doesn’t lead to management spending an enormous amount of time reporting, and also don’t accept nothing as a suitable measurement program. Both extremes are dangerous. Work with management to find a middle ground – ensuring you’re informed with strategy progress without the board becoming micro managing or too operational.
Find, or develop, a framework for reporting on strategic goals – something that facilitates communications between the board and management on the things that matter and are important to the strategy. Some ideas to start the conversation around what the measurement framework could incorporate include:
· Reviewing one goal / strategic objective at each board meeting.
· Reporting on all key metrics every month.
· A simple traffic light system: red (bad), yellow (moderate), or green (good) depending on how each goal is progressing.
· Something more robust and in depth.
There are a number of resources available on the web to help you in monitoring and setting strategy. One that I find quite useful and simple for small to medium sized organisations is the One Page Business Plan.
3. Do you regularly review and reflect on each strategic objective / goal?
Setting a strategy and then placing it on a shelf or in a drawer does nothing to achieve the goals of the organisation. Strategy is ongoing. The world is moving too fast to allow us the pleasure of setting strategy once, then never looking at it again.
Make the time at a board level to regularly review the major strategic objectives. Utilise the expertise on your board to bring current thinking on each goal and understand what changes are here or coming and how they might impact the achievement – or not – of the strategic plan.
Some boards choose to review one strategic element each meeting – having it as a standing agenda item (ensuring all elements are reviewed at least once in the year), or receive regular updates on the strategy as a whole at each meeting (via a dashboard or similar mechanism), or do a thorough review at a half-yearly strategy-specific meeting. Mega bonus points if you do a combination of all of the above.
4. Does it need changing or updating?
The logical step after reviewing the strategic objectives is determining whether your strategy needs updating or changing.
Consider taxi companies and the emergence of Uber. If you were on the taxi company board, were you looking to see what competitors are coming or potentially coming, even from beyond your “industry”?
Consistently looking out over the horizon is a habit that each board member should develop. As a board member you have the benefit of being mostly out of the business and looking around at the world at a macro level. Because you’re not caught up in the day-to-day running of the business, you can bring insights and observations of what’s to come and how this may impact the organisation.
The first question to ask is: Are we as a board asking the right questions? Yes there are the traditional questions, but consider removing the barriers to your thinking. Consider adding these questions to the mix:
· How would we put ourselves out of business?
· What technology could be leveraged to disrupt the business and/or industry?
· Can we move first?
· Where are the potential threats coming from?
· What can we disrupt?
· If we were to start this business again what would we do differently?
5. Is it time to set a new one?
If the need to change or update the strategy becomes a mammoth task, perhaps it’s time to consider writing a new one. The same goes if there have been significant changes to the industry, to relevant Government policy, to staff and /or to the board; these indicate that it may be an opportune time to prepare a new strategy.
Work together or engage a facilitator to help you prepare a strategy that everyone can get behind. If you have or had a previous strategy, use the results and information gained from the work put in to implementing and reviewing it to help you set the new strategy. Don’t get caught up in the cop-out “last year plus 10%” method of planning.
I hope these questions help you and your board to have a frank conversation about the strategic plan and the board’s involvement with its achievement.
Will you be asking these questions at your next board meeting?