When developing strategy for non-profits or publicly traded businesses, a board of directors is often involved. Now, some managers might see this as a necessary evil, because it could reduce their freedom in decision-making.
So, I wanted to discuss how having a board’s involvement might affect the strategic planning process.
Role of Management in Strategic Planning
Management (the most senior C-level managers) typically carries the bulk of the load when it comes to strategic planning. However, some companies look at strategy as a year-round undertaking, where they have teams of researchers continually conducting competitive research, product line planning, target market analysis, etc. On the contrary, board members are not really involved on a year-round basis.
This means management will generally have more influence on a business regardless.
For example, goal setting and visioning can come from bottom up or top down, but always will have management involved. For example, various segments of the organization can set their visioning/goals and hand it up up to the C-suite team. Or, the C-suite team can have an overall goal/vision and hand this downward, i.e. “Here’s what we’d like to see your department reach in the next year.”
The bottom-up is more thorough and inclusive, but it also takes longer. The top-down method can also work, as long as there is good communication and input from within.
The board usually gets a role only at key intervals – quarterly or annually, for example.
Role of the Board in Strategic Planning
Businesspeople have mixed views of a what board’s role should be when it comes to strategic planning.
Some management teams prepare the entire strategic plan, and pass it forward to the board for questions and approval only. This is somewhat of a passive role of the board, i.e. more of a “rubber stamp” scenario.
At Tenato, we feel that the rubber stamp scenario is a missed opportunity.
Consider the calibre of the people that a company typically has on its board. The could be former CEO’s of other companies, politicians or extremely successful businesspeople from diverse backgrounds. Isn’t it remiss to not get some real input throughout the strategy development process? Why not bring the board in earlier on to help a company “think big”?
If anything, that’s where want your board’s input, right? So, ensure you get the board’s input before your overall vision is set. This why at Tenato, we engage board members during the research phase, which occurs before the planning begins. We also often involve them directly in the planning – read on.
Getting Your Board Involved in Strategic Planning
A qualified, solid facilitator is a critical for ensuring a smooth and engaging strategic planning process that includes the board and management together. Information and clear choices must be presented to a board to help them have the best opportunity for discussion. Such information might include:
- Current competitor information
- Current economic information
- The latest research & development status updates
- Cost estimates of decision paths
- Market or customer satisfaction research
- Bringing in experts for a discussion
And of course, any other pertinent data to allow the board to make the best possible recommendations to management. The key is to be very organized, and do not waste your board’s time. Try to use the board’s time and input to help define the overall long term direction and strategic priorities, and not waste it with day to day operational issues.
A good strategic planning facilitator can also ensure that information is presented clearly and discussion is moved through efficiently to maximize engagement.
Corporate Board: Resource vs. Obstacle?
While corporate boards sometimes get a reputation as a rubber-stamping or veto-power committee that is there to encumber management of a company, they are really expert resources.
Studies do show that companies that operate with boards consistently outperform those without them.
If you’ve got another dozen or so good brains at the top level of the company, why not use their seasoned expertise?
Our team can help you make the most of your corporate board’s input. Contact us to learn more.
