It’s not unusual for a disconnect to arise between a board and management team, typically caused when they do not share the same ‘one-view’ of their business. These disconnections can readily feed discontent and a break in communications impacting both board and management team performance. Rebuilding these connections must often start at the strategic level.

 

Active Knowledge Question:

Have you ever been in a situation where board members are unhappy with the management team’s performance, and the management team have given up on the board?

 

A Partnership

The relationship between a board and management team should be one of a strong working partnership.

The chair of the board and the chief executive officer (CEO) are the leads for each team, but all team members must be able to work well together. For each degree of disconnection, by any team member, there is a related decline in business performance.

Both the board and the management team understanding, and respecting, their different roles is the starting point in building a strong working partnership. However, if they do not view the business and the world in the same way, they will be basically ‘speaking different languages’ and not hearing nor understanding what the other is saying.

And by ‘view’ I’m not referring to opinions but a disconnect that is seeded at the strategic level. A board and a management team have quite different roles in the development of a business’s strategy. And if that business’s strategy is not developed through a strong working partnership, then it will lead to the forming of different views as to what the business is all about and what is important.

By way of analogy, the board and management team may start at the same base camp, but each will choose a different route to reach the summit and will probably even disagree as to what that summit was.

The resolution is to pause and restate the business’s strategy in a form and language that everyone understands and agrees to – a succinct language.

And a warning, at the outset, many team members, board and management, will argue that this is a waste of time as everyone knows what the strategy is and what’s important. But as the conversation commences and advances, it will become obvious, from the outside, that they are not looking at the business through the same lens and the paths they are heading along are not aligned.

 

Business Strategy

Put to one side your strategic business plan and all the associated documents, charts and budgets. A business’s strategy and its foundations should be able to be succinctly expressed by stating seven points:

1. For what purpose does our business exist? Note profit is not a purpose, purpose lies in what you seek to deliver to that community which you have chosen to serve.
2. Who are our customers, what needs are we seeking to fulfil, and what value do we intend to deliver?
3. What can we see is or might change that would impact our customers, their needs and the value we deliver? And what is our response?
4. Why is the value we intend to deliver to our customers, better value than anyone else? A value that allows us to outcompete all others. Note: value is through our customers’ eyes in meeting their needs.
5. Whom do we need to be as a business, and how do we need to operate to deliver the customer value we will compete on?
6. What does success look like for us? Note: success is not more profit, success is greater value to our customers and through which a greater profit may be earned.
7. What do we need to do to make all the above a reality?

The number crunching, risk analysis, and everything else that is involved in validating and supporting the strategy sits to one side – they’re your workings, not your outcome.

Try asking your board and management team to, individually, answer these seven questions and then compare the responses, and you will quickly see where all the disconnects exist. You can then move forward to establish and reaffirm a single view of the business’s strategy.

 

Alignment

Often there is a strategy, but the execution does not support that strategy. And again, the disconnects arise as there is a roadmap, strategy, but all the supporting systems and processes in the business were not realigned to support that strategy.

Once your business strategy has taken form, the most important task is the development of the implementation plan. A strategy that cannot be delivered is not a strategy. Point 7 above reflects this implementation plan.

Here is a simple checklist of areas of realignment:

1. This is how we intend to compete – our strategy
2. These are the goals we need to deliver to bring our strategy to life.
3. This is how we will need to reorganise the way we operate as a business so we can deliver the customer value that will allow us to outcompete.
4. Our decision-making processes including budgets etc. will need to align with the delivery of the strategy and implementation plan. If it’s not aligned, it’s not approved.
5. This is the type of organisation we will need to be (the ‘who’ in (5) above) to be able to deliver this strategy, and this is how we will achieve that.
6. This is what we need to measure to focus clearly on what success looks like for us as a business with this strategy (points 2,3,4 above).
7. This is the way rewards need to be structured to ensure that everyone is focused on the outcomes consistent with our strategy.

Commonly after a business strategy is settled, everything continues as business as usual and all the processes and systems, and the way the business operates, just remained the same. Little consideration is given to how ‘everything’ needs to shift to align with the new strategy.

 

An effective working partnership requires ‘one-view’ of what that partnership is seeking to achieve. The succinctness of this view equates to performance – more succinct equals greater performance.

If you find tension arising between a board and management team, I would first look to the ‘one-view’ and determine how succinct and aligned that view really is across both teams.

 

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All the best in the success of your business,

Richard Shrapnel