Strategy and boards

I've published a number of posts on the importance and challenges of strategic planning, including a series of posts by guest blogger Marta Siberio. (Marta's post about the toughest moments in the strategic planning process, with links to her other posts, is here.) An article in the February McKinsey Quarterly, "Tapping the strategic potential of boards"  by Chinta Bhagat, Martin Hirt, and Conor Kehoe suggests an approach to engaging boards in the strategic planning process. (As usual with McKinsey materials, even though the article is written about a for-profit company, the lessons are equally applicable to not-for-profits. McKinsey Quarterly material is free once you have registered.)

What are the steps? First, the authors identify the issue: board member often have limited time to consider an agency, and other issues may take priority over strategy. Moreover, board members often have little expertise in an agency's areas of operations, so they tend to review and approve strategies without becoming fully engaged in them. The authors suggest that management and boards consider three questions together.

1. Does the board understand the industry's dynamics well enough? The authors suggest that giving board members time to understand the agency's operations and programs, "the structure and economics of the business." This is time that can be used to identify emerging issues, see how different programs fit together, and, perhaps, note where mission creep has begun to play a role.

2. Has there been enough board-management debate before a specific strategy is discussed? In the for-profit context, the authors say that board members should approach a company as an owner would, opening up a discussion to "should we be in this business?" Members of non-profits boards can profitably ask similar questions. In this discussion, the authors say:

[M]anagement’s role is to introduce key pieces of content: a detailed review of competitors, key external trends likely to affect the business, and a view of the specific capabilities the company can use to differentiate itself. The goal of the dialogue is to develop a stronger, shared understanding of the skills and resources the company can use to produce strong returns, as opposed to merely moving with the tide.

 3. Have the board and management discussed all strategic options and wrestled them to the ground?

This is where management steps up, considers the options, and thinks each through to its logical end, including the resources needed and the costs - and opportunity costs - of putting it into effect. (This, the authors caution, is not an easy discussion to have: it needs to be collaborative and productive, not blaming.) In the example the authors provide, the board and management made their decisions and then went farther, putting into place a system for examining implementation.

These are not simple questions, and in considering them you will face complex issues. One way of working through them is devoting some time to strategy questions at every board meeting, rather than relegating the strategy discussion to a separate process. Have you tried that particular approach? If you have, use the comments to let us know how it worked.

Social Media and Management

From the McKinsey Quarterly (free once you register), here's an interesting piece on six social media skills every leader needs, along with some suggestions for implementation. Social media can be off-putting, but a working knowledge, or better, is necessary, say authors Roland Deiser and Sylvain Newton.

By nature unbridled, these new communications media can let internal and privileged information suddenly go public virally. What’s more, there’s a mismatch between the logic of participatory media and the still-reigning 20th-century model of management and organizations, with its emphasis on linear processes and control. Social media encourages horizontal collaboration and unscripted conversations that travel in random paths across management hierarchies. It thereby short-circuits established power dynamics and traditional lines of communication.

 Translated from consultant-ese, here's what the article recommends:

1. Create content that is compelling, not (necessarily) perfect. The authors use the 'auteur' theory of filmmaking as an example: the skills required are "an authentic voice, imagination, and the ability to craft compelling stories and to turn them into media products that make people take note." Turning out videos doesn't hurt.

2.  Using new distribution pathways mean that leaders can spark a discussion, then learn from it. In order to be effective, the leader needs to work on developing a group interested enough to make the message go viral, and then remember to synthesize what the group is saying about an issue.

3. Filter out what's unimportant. Just make sure that you look at social media streams as well as more traditional ones, like email.

4. Take the lead in using social media. All your direct reports need to become media literate. Encourage experiments and allow for mistakes.

5. Create the necessary infrastructure.  Create some kind of social media space: a wiki, an internal blog, a video channel. If possible, include consumers in the discussion.

6. Stay on top of emerging trends.