Passion and Focus, A Board Requirement for Excellence

For a governing board to accomplish anything of significance regarding the quality of it governance, much less excellence, it, too, must have passion, i.e., care deeply, for its work. I say “too” because CEOs and employees are told all the time that they must have passion for the mission, and boards are told the same occasionally. But not passion for what should be their work - governing the organization well. No attitude of passion for governing with excellence and the board ends up reverting to old habits, i.e., passive laziness and reactive governance. I have seen it over and over. The board starts excited to improve (or, for example, implement Policy Governance) but stalls out (much to the growing cynicism of the CEO). However, couple passion with a clear vision for governing with excellence, and the board begins to focus. Focus results in persistence (follow-through on its original intent), and focus, coupled with follow-through, results in a developing character of tenacity and endurance to reach the goal - the board’s goal of excellent governance. Excellent governance transforms the organization and attracts excellent CEOs.

Resourcing Board Governance: Be Careful What You Call Yourself

Nonprofit board members may be unpaid but they are NOT volunteers. As I work with nonprofit boards across the country, especially faith-based ministry boards, and reflect on my own experience on NP and ministry boards, I have learned that the typical board thinks poor. Because they think of themselves as "volunteers," everything (except perhaps the audit, which is often required)regarding their governance is done on the cheap. Little do they know how much they are costing the organization for which they are accountable. They are unwilling to invest in themselves to improve their own governance, even become excellent if they tried. They seem not to realize they are as much a legal component of the organization as the CEO's office, or the financial section. Not only that, they, collectively, are accountable for the organization. They are NOT volunteers as one normally thinks of volunteers. In fact, if they get it wrong, they can suffer consequences, meltdown, front page notoriety, fines, bankruptcy, etc. Their job is to lead the organization, but most boards do not know how to do that, and they do not know they do not know. So they lapse into reacting and asking questions as they review whatever has been put before them, typically financial reports. Governance is providing both direction and protection. To do that well does mean some investment. However, considering the vital role the board (should) play, the relatively small percentage of the organization's budget good governance costs pales compared to the importance a good board can bring in value to its organization.

Values and Zero Sum Thinking

I have just read my umpteenth book (and article) on ethics, values, values and leadership, values and planning, etc. Virtually all the writers confuse or fail to differentiate between "be" values and "do" values, which leads to planning confusion. "Be" values, generally virtues as I use the term, such as integrity, compassion, teachability, courage, etc. are those you and your organization want to increasingly become. They "saturate" the decision and behavioral environment, so to speak, like dye a fabric. Furthermore, they do not lie on some sort of common continuum between each other - as one increases another diminishes. Each has its own dimension. Ideally, we want to be fully mature in each value. The concept of "core" really is not a good way to attempt to think of these values. Developing those is a continuous process.
"Do" values are values that require activity such as family time, recreation, personal development, spiritual development, etc. Since they require activity, they take time and are subject to allocation limits. This means that such principles as balance, prioritization, defining a core set, time management, etc. do pertain to these values.

Differentiating the nature of the values will help avoid confusion and, therefore, our strategy for dealing and moving toward our values. - Both types are important but require totally different approaches.

What is the Connection Between Values and Performance?

Everything starts with values, and by values we include ethics and virtues. We are convinced that consciously articulated values are profoundly required for at least two (for starters here) vital components of high performance organizations.

As we and our colleagues have worked with organizations, including ministries, their attitude and approach to risk and risk management (or not) are fundamentally values-based. Are they willing to confront the truth? How do they avoid denial, the deadly disease of organizational failure? Do they let the truth in? How rigorous are they willing to be in protecting against serious risks? What is their sense of accountability? What is their attitude toward excellence? Is it part of the culture? Or is the culture one of “adequacy?” (Which is a true experience of mine!) Are they willing to act - to execute as needed?

The second is an issue raised by Jon Katzenbach and Zia Khan in their article in the summer issue of Booz&Co.’s magazine, Strategy+Business. Katzenbach argues for the wise integration of good results measures and the soft side of organizational leadership - culture. The article points out that good measures energize and align. “In business the informal organization is most successfully mobilized when there is a sharp focus on performance ..people want to know how their informal collaboration will lead to improvement in results.” I might add that people also want to know how they and their team and their organization are doing toward larger ends. This is, in fact, an important personal motivator.

Katzenbach observes that one of the keys to driving change (in the organization he using as an example) “was the focus on metrics that matter and motivate. To that end, (the leader) needed to make the organization more values driven…” the company then set about intentionally creating and articulating its values. I have to admit this is the first time I’ve seen an academic link values to good results metrics. But I agree. We fail to recognize the fundamental beginning point that values constitute - even for such a “hard science” as performance metrics.

More on Board Spine, an Interesting Experience

It Often is the Little Things That Make a Difference and are Just Enough

I had an experience a few days ago that is very relevant to the blog I posted in October on the need for a board to have spine as a necessary component of governance. This was a favorable experience for once and fit the turnaround pattern that was emerging in this organization.

Here is the story. I was standing in an informal group prior to a meeting, a group which included the prior chair of the organization on whose board (mentioned earlier) I had reluctantly joined to help turn the organization around and rescue it before it went over the edge. Also, in the group was the CEO we had appointed to replace the previous one. This board was, (or became soon enough), a Policy Governance® board and so was looking forward to the first Ends (intended results, for whom, & the resources to be used) monitoring report under this new CEO. The new CEO had been unable to submit an ends report last year after just after arriving because the prior CEO had terminated the data system that enabled the quantification of ends.

As the group visited informally the new CEO seemed excited about his work on the ends monitoring, which would be submitted to the board very shortly. Suddenly into the casual conversation of this group, the CEO commented that one of the reasons he had been so diligent regarding reinstating the data system and driving him toward excellence concerning the ends monitoring was that the chairman last year had made a single comment. When he, the new CEO, had told the board last year, just after taking his position, that he would be unable to submit ends monitoring because the data system had been terminated by his predecessor (but he would be reinstating it), the chair had simply commented, “That (failure to monitor ends) is not acceptable.” The CEO told the group that that comment had “rung in his head” all year and he had not forgotten it!

One comment by a chair was all, in this case, that it took to reinforce to this willing and able CEO the fact that the board was serious about receiving decent ends monitoring reports. He assumed (rightly) that the chairman was speaking for the Board, and he needed no further indication of Board resolve.

That is a wonderful example of the use of just the right amount of Board firmness required in this case, and for this CEO, who got the message and willingly set about complying. The chair knew his board and where it stood in this matter and applied just the right amount of firmness to his message. Nothing in writing, just a simple, almost casual comment was all it took.

The Ends monitoring report? It was great! It focused the Board on the ends accomplishments of the organization, and suddenly all the effort and pain of the past couple of years were worth it. The Board and CEO, together, contemplated the future in terms of ends, discussed new challenges and dreamed about the future. That board went home feeling it had done its job.

Board Governance, Diligence, and Entropy

In an article posted this month on the electronic version of Quality Digest Donald Wheeler, one of my favorite trainers and authors in the use of improvement statistics, discusses the power of entropy (as in the Second Law of Thermodynamics) to drag an organizational process toward deterioration and chaos. Sometimes the process appears to be giving us the results we want but occasionally and unpredictably fails. Underlying that particular pattern may be a process that is not really fundamentally reliable at all, (i.e., it is unstable and is unpredictably so, at that), but it appears to be giving results, which lulls us into complacency and hence, benign neglect. Because we don’t recognize nor probe the real root cause of this behavior, the process swings from looking good (but underneath is “On the Brink of Chaos”) to “Chaos” and failure and then back as we reactively patch it. Wheeler calls this the “Cycle of Despair.” We constantly patch to fix it, getting it back to giving us results and then, wham, it goes out on us again.

As I reflected on this phenomenon, I realized that I commonly see governing boards behaving this way. They start into improving themselves, for example, saying they will learn and apply Policy Governance®, improving the rigor and intentionality of their governance. They promise their CEO to improve so he can be free to manage and they can govern. But as they begin to change and improve, they become complacent and don’t realize they are fighting a very persistent and pervasive hidden enemy, entropy. When they relax in their complacency, they slide backwards toward old habits and ineffectiveness.

Of course, there can be other causes for a board experiencing this pattern. A common one is laziness - a close cousin of complacency. It is always easier the old way (even if less effective). The chairman just doesn’t get around to doing what must be done to stay the course. (He is use to showing up, and finding the agenda and all the reports there in front of him ... done by the CEO.) Often staying the course simply means for the chair doing the agenda the way it should be done and holding the board to its stated intent. But it is easier to let the CEO do it, it’s new to me; he’s done it in the past, or use an old agenda - one simply calling for reports.

Occasionally ignorance may be cause, but that has no excuse either, since a phone call or e-mail for counsel or assistance is just a phone dial away.

Usually there is irony (or hypocrisy) here. The board would never condone its organization not striving for excellence and the diligence it takes but is, itself, unable to persevere against entropy and continue the climb to excellence.

Now that I'm off the board...

“Now that I’m off the board I am more valuable.”

I had a friend just recently mention to me that he had stepped down from a board he had been on for some time, and discovered that he felt that he could be more helpful off the board than on. He is not the first to make that observation to me. Indeed, I recently stepped down from a board myself and told both the president and the board chair that I would be available gratis as an advisor, feeling as though I had exhausted my value to the board and could be more valuable off than on.

The chair and president have indeed sought my counsel from time to time. My contributions are pure observation and advice. I can be candid because of it. This provides a refreshing freedom to what I can say to either the chair or the president.

So I began to think about the pros and cons:

1. When you are on a board you have to be careful that you don’t use your board position to “instruct” or “help” the CEO (or other employees). It’s so easy to be misunderstood. The board as a whole is the boss of the president, not individual board members. Nevertheless, a member’s position of presumed authority can be confusing, and board members often behave as though they had individual power. The CEO can get all the help he needs from anywhere. He doesn’t need a board to do that. The board is not for advice or help (much to many people’s disillusionment); it is to govern. Roles and power can be very easily muddled or misperceived when on the board. Off the board you can give all the advice you want and it can be accepted or rejected free of misunderstandings.

2. Now I can be friends with both chair and president, free of mixed loyalties. When I was a board member my first and legal duty was to the organization and its moral owners as we saw our accountability. Yet I developed friendship with the President (and his staff) and with that friendship goes a certain natural loyalty. This is a problem in governance because that friendship can blind or weaken my loyalty to the organization - my ability to be firm if necessary. There is real tension and there are innumerable studies discussing this issue. I believe that it is the most common reason behind CEO induced meltdowns - huge compensations, poor org. leadership, poor strategy, etc.

3. Your timing is your own. You can phone up for a visit at any time or e-mail a thought. It does not run the risk of being seen as tied to an issue coming up on the board, since you don’t know what is coming up. Your motives are seen as purer - less likely mixed.

4. The president or chair is free to be more open since your motives are not, of necessity, mixed anymore. This actually enables you to give better advice. You learn more and you see more clearly.

Anyway, those are some of the dynamics behind this feeling we have sometimes when stepping off a board but desirous of continuing to contribute. We can be valuable in a profoundly different way. Both roles are vital. But we can’t do both at the same time. There is a time…