Adventure is just bad planning: (Roald Amundsen)
We call the best Boards ‘Future-shaping’, able to prepare their companies for a range of alternative futures and scenarios. They look forward and outward, exploring future horizons, risks and opportunities outside the bubble in which all companies operate. They probe their firm’s capacity to adapt to the unexpected. They foster both foresight and resiliency.
Yet how can even the best Boards ensure that they, too, are ready for what comes next and do not fall behind? How can they renew and refresh their capabilities in the face of relentless changes to the business, to technology and society?
Just like Managements, Boards often wisely doubt their ability to predict an uncertain future. Yet this can lead to a reactive stance: ‘Until we know what strategies Management will propose, how can we get ready to add value to them?’
Consider, too, that Boards work within tight constraints. For the year ahead, most agendas are heavily booked, their scarce time already committed to a program of in-depth oversight and counsel to Management. How can they carve out time to focus on their own preparedness?
Or do they have an option? A Board has two priorities: the firm’s business and its own business. Excelling at the former is unsustainable without recurring re-investment in the latter.
At Guided Futures, we are building a comprehensive response to these challenges, to equip a Board with a hard-edged, forward-looking plan to strengthen its future contributions and readiness. We call it a Board Advancement Roadmap: a guide to a Board’s own, ongoing renewal, mobilizing them for what lies ahead.
Fine, but Boards come in all shapes, sizes, and stages – how can we incorporate those differences? How do we prevent Roadmaps from becoming mechanical, or losing their currency? Can they stay fresh as conditions change? These criteria drive our design at every step.
What events could cause a Board to re-think its future? When will a Board need to reassess its own business? An obvious trigger is a major leadership transition. Any new Board Chair or CEO (or an influx of new Directors) can raise the urgency for a Board to set a new course. In the same way, any sharp disruption in a firm’s performance or prospects may require its Board to update its own priorities, focus, or capabilities, e.g.:
- Company results falling far short of (or accelerating well past) existing Board or investor expectations
- Turmoil in market conditions challenging the very foundations of the firm’s existing business strategy
- Looming external threats from a potential acquirer, aggressive investor, or new global competitor
At times like these, the purpose will often be to help a Board raise its game, to step up. Just as often, the goal may be to help an outstanding Board find new ways to perform as new circumstances or events unfold. It is not only unsuccessful Boards that want to reconsider. The best-performing Boards are acutely aware that today’s formula for success may not prevail tomorrow.
For Roadmaps to be credible and valuable, both Management and Board must take risks
From the outset, we could see that high-contribution Boards depend, for their success, on a close partnership with Management. Otherwise, they are like ‘the sound of one hand clapping’. Nowhere is this more apparent than in designing and building a blueprint for a Board’s next stage.
Managements mostly know best which strategic issues must soon reach the Board, which debates it must resolve, and on which subjects it lacks up-to-date knowledge. They also see which Directors most influence Management thinking and which do not. Boards planning their future mix of skills and talents utterly depend on such insight.
Most important, building a Roadmap can help draw out and reconcile the expectations of Management and Board for each other. This is not as easy as it sounds – each party may see danger in being too candid.
Still, pursuing a forthright conversation makes perfect sense. A Board needs to know where Management most intends to call on its advice. Management needs to know how best to support their Board in its planned development. For a Roadmap to be both credible and valuable, both parties will need to take that extra risk.
What is a Board Advancement Roadmap, precisely, and what value can it deliver?
Simply put, a Roadmap is a Board’s strategic plan that provides integrated answers to seven related questions:
- What strategic issues and alternatives will the Board need to focus and decide on over the next 3-5 years?
- What sequence and timing must the Board follow to address these issues and alternatives?
- How will projected leadership succession on both sides influence this evolving Board mandate?
- What capabilities will the Board need to marshal in preparation, and in the face of current gaps?
- How must Board composition, processes, practices, learning, and above all, culture evolve in parallel?
- How must Management respond in how it supports the Board, given the emerging Board mandate?
- How must each Committee and Director respond to that mandate in what they do and how?
Each answer offers high value by itself, but the benefits go deeper. The very process of surfacing and debating such issues can be a catalyst that spurs a Board to act. While some Boards find it easier to scrutinize Management than to face up to their own limits, this process encourages any Board to become increasingly…
- Deliberate in shaping its own future capacities
- Direct and clear about its priorities and intentions, both with outside stakeholders and within the firm
- Effective in its partnership with Management
- Equipped to understand and contribute to the next waves of change that its company will face
Few of these benefits will materialize, however, unless Board leaders tailor their work to what is distinctive about the firm, the Board and its current stage of development. While the questions are universal, the answers will vary widely from one Board to the next.
The combined implications flowing from those answers must lead to a customized strategy to govern this Board’s business over several years. And when the answers change over time, the Roadmap must, as well.
This seems like extra work – how can a Board Advancement Roadmap be made practical?
Even when Boards fully accept the need to build next-generation mandates, priorities and capabilities, the added effort may appear too great. Fortunately:
- In developing a Roadmap, most work will take place offline; the Chair and Governance Committee will provide most of the internal leadership. In that first year, the process replaces the annual Board evaluation, lightening the (net new) burden
- It then offers a forward-looking context for evaluations during the next 2+ years, after which the cycle of Roadmap creation would begin again
- Although a Roadmap may result in new initiatives, these would be spread out over several years
Of course, even the best Roadmap is just a plan. It will fail without the dedicated pursuit by Board and Management of the gains that high performance brings. Peter Drucker famously said: “Plans are only good intentions unless they immediately degenerate into hard work”. Still, with a Roadmap in hand and a drive to perform, any Board has the tools and the insight it needs to shape its own future.