What is your energy level at the end of a board meeting? What are the unspoken comments inside your head as the meeting adjourns? Are they “Glad this is done and what’s for dinner?” Or “Time flew in this meeting – the dialogue was rich?”

More boards are reshaping their agendas, board packets, and style of board conversation. They are doing this to move toward being a high-performing board with strategic readiness.

Board agendas need to cover three main governance functions:

1. Setting the organization’s direction
2. Ensuring necessary resources are allocated
3. Conducting oversight

Sounds pretty basic, right? Let’s take it a deeper level with examples.

1. Setting the organization’s direction: This means approving the strategic plan, which is more than an episodic event every fall. Every month, an agenda topic needs to be a dive into questions like how are we fulfilling on our strategic plan? Are we on target? Has the target shifted? What is up for our future that needs our attention now?

2. Understanding and ensuring how resources are allocated: This means receiving regular reports from the CEO on how resources are being allocated to fulfill on the direct set by the board and appropriately challenging and supporting.

3. Conducting oversight: Oversight requires expertise, deliberate dialogue, communication of expectations of financial strength, risk management, reputation and regulatory challenges, and evaluation of the board and the CEO. Do we have the financial strength to weather another economic setback? How is the CEO capable of leading the organization into the future, what support does he or she need, and what is the quality of our Board-CEO relationship? What do we, as a board, need to improve in our leadership?

Earlier I mentioned a culture of inquiry, which I believe is a best practice for all high-performing teams and boards. A culture of inquiry encourages curiosity, maximizes engagement in gathering relevant information, and increases knowledge across the room. Equal access is provided in real time to all participants in order to provide a level setting for a rich and deliberate boardroom dialogue.

Two other attributes of a culture of inquiry are active feedback mechanisms and an individual and collective commitment to success. A systematic process to help the board behave as a high performing board is necessary for a commitment to continuous improvement. The feedback mechanism is ideally at the end of every meeting (how did we perform as a board?) and through consistent feedback by the chair to each board member. An agreed-upon commitment for each board member and the board as a whole must be present in each conversation and meeting.

A litmus test to determine if your board has a culture of inquiry is for each board member to agree that:

1. Each board member shows up to the meetings ready to actively discuss the board packet.

2. Each board member demonstrates an active openness to question complex, controversial, or ambiguous matters.

3. Each board member actively evaluates issues, challenges, and opportunities from all sides before a decision is made.

4. Each board member proactively participates in decision-making.

5. Each board member has mastered the skill of listening, appropriately analyzing issues, and professionally responding as part of our board dynamic.

6. Each board member behaves in the best interest of the organization.

7. Each board member actively demonstrates continuous learning by reading, attending webinars/webcasts, and participating in ongoing board certification programs.

8. Each board member asks difficult questions.

9. Our board, as a whole, does not accept easy answers; we ask powerful questions.

10. Each board member has and works their own customized board member development plan for the sake of increasing knowledge in the room.

Use this simple litmus test at your next board meeting. Answers are simple: YES or NO. Answers that say Sometimes or I don’t knoware treated as NO

Call me or write with questions and comments, and look for next month’s blog on “Trust: A Boardroom Phenomenon.”

Dr. Deedee Myers
deedeemyers@ddjmyers.com
www.ddjmyers.com
(800) 574 8877 ext. 101

Strategic vs. Tactical: Let’s Align

Effective leadership requires a balanced attention to strategic and tactical requirements and outcomes. Strategy and tactics are two different and distinct business functions and practices. An easy way to remember the difference is that strategy is doing the right thing. Tactics enable us to do things the right way. Obviously, the tactics should be aligned with the strategy.

Strategic planning facilitators are accountable for increasing the strategic intelligence of the credit union and increasing forward thinking. Future-oriented visions support your credit union in these ways.

• Building a learning culture
• Increasing futuristic thinking
• Solving problems before the problem knocks on the door
• Expanding capacity for making the right decisions
• Recognizing emerging trends and patterns
• Understanding what possible future events may impact your business model
• Predicting potential problems
• Foreseeing the outcome of planned projects
• Developing and deploying sound backup strategies
• Planning future growth, typically within 3 – 5 years, that is aligned with the mission, vision, and values.

Organizations strive for an operating model that leverages the competence of its team members. Technically, superb strategic plans are built at spring and fall strategic planning sessions and, for many organizations, fall short of effective deployment. Many employees still do not have clarity on how their role aligns with strategy. Therefore, there is a good chance that the tactics may not proactively support the larger strategic vision in pursuit of excellence.

Relevant strategic planning and tactical actions align with organization excellence. Tactical intelligence is in the here and now—today—by providing:

• Analysis of competitive conditions
• Steps to remain competitive and relevant
• Actions to fulfill strategic objectives
• Accountability assignments to fulfill strategic objectives
• Most efficient use of current resources to achieve strategy
• Most efficient use of resources to manage risks and challenges related to strategic plans
• Short-term orientation, typically within a year

Board members often declare that they will be more strategic and look for ways to shift their perspective on what “strategic” means in the form of board leadership. Distinguishing between a tactical versus a strategic conversation and decision type is a learned skill that strategic planning facilitators and CEOs can utilize to support the board members. When a board member starts to go tactical, a gentle nudge back to the strategic path is necessary.

Tactical leadership requires analysis and action. Tactical plans are typically smaller in scale, short range, and serve a larger purpose. Strategic leadership requires the art and science of communicating a compelling vision and the enlistment of broad support for developing longer-range plans in service of the greater vision.

Historically, too many organizational cultures have focused on results-oriented management in service of the customer or member—and such an approach often persists today. Buzz terms, such as “efficiency,” “measurable,” “rational,” “service oriented,” and “bottom-line-oriented,” are explicit in planning processes. Forward thinking in strategic planning is gradually being elevated. This higher-level strategic thinking at the board and executive level is conducive to a strong strategic partnership.

Organizational excellence is sustainable with a strategic partnership between the “thinkers” and the “tacticians.” The “thinkers” are entrusted with, and accountable for, the use of credit union data to make strategic decisions to direct the company into the future. Tactical intelligence requires company-wide attention across multiple functional areas.

Move into your spring strategic planning session with the right people in the right roles with effective coordination, collaboration, and communication. Strive for organizational excellence by seeking to increase strategic and tactical intelligence.

Succession planning is a current and critical initiative for many credit unions. Over 1200 CEOs will transition in the next four years. Over the past few years, I have seen various succession planning outcomes for many credit unions as well as other outcomes somewhat disastrous because of a lack of a deliberate and focused planning process. I write this short article to, hopefully, challenge some readers to check their assumptions and blind spots (we all have them) before embarking on a process that could result in unintended collateral damage rather than a more positive outcome of a structured and systematic process.

Here are 8 common assumptions that tend to be blind spots for boards and CEOs in CEO succession planning:

1) Assumption: Internal candidates are ready for the CEO role.

Solution: Prepare a detailed baseline of required skills, expertise, and leadership attributes. Conduct a gap analysis to better understand if internal candidates are ready.

2) Assumption: They applied for the CEO job, so they’re ready, and no onboarding is needed.

Solution: Many candidates come from larger credit unions and leave because they want to be a CEO. Skills, expertise, and leadership are at a point to be applied in a CEO role. Boards that dismiss the notion of an onboarding process lose sight of the fact that they are responsible for supporting the success of the new CEO. Hence, give the new CEO an on-ramp to success with onboard executive coaching.

3) Assumption: An external candidate will be the best CEO, and, therefore, we don’t even need to bother to include potential internal candidates.

Solution: An external candidate might be a better fit, yet if the internals are not included or invited in the conversation, the board is creating unnecessary chaos that ends in low morale and a more challenging onboarding for the new CEO.

4) Assumption: Wait until the CEO actually leaves before starting the process.

Solution: Start years in advance so the transition is with ease and the change is transparent. Advanced planning by the board can start as soon as ten years and, ideally, no less than three years.

5) Assumption: The CEO does not need to be involved with developing internals.

Solution: The CEO creates development plans for the internals so there is focused learning and development.

6) Assumption: Signing a recruitment contract is succession planning. This is one of the worst assumptions a board can make. A recruitment contract is NOT succession planning; it is a singular episodic event.

Solution: Succession planning is a systematic planning process with feedback loops. It is ongoing and becomes part of the DNA of the organization when designed and implemented with intention. If you are 6 – 9 months within needing a new CEO, then sign a recruitment contract, as it is too late for strategic succession planning.

7) Assumption: A recruiter is an expert in succession planning. This is a misguided assumption because a succession planning consultant has expertise in organization development, career development, and strategic planning and understands how to design and implement a system involving humans. A recruiter knows how and where to find the best candidates.

Solution: Work with a subject matter expert in succession planning as a strategic partner. The subject is complex and has opportunity for far-reaching positive impact far beyond a singular recruitment event.

8) Assumption: Compensate the new CEO less than the current CEO.

Solution: Such an approach to compensation is misguided. First of all, is your current CEO compensated at today’s market rates? How do you know? In the compensation studies we do, less than 50% are compensated at the same level for which you would need to recruit from the outside. So, update compensation now by looking at base salary, short- and long-term incentives, and benefits. If you use a subject matter expert to assess compensation levels, ask if he or she also invests and manages these long-term rewards. I prefer a separation of assessment and recommendation from the management of such funds.

Many credit unions are managing succession planning with a positive and strategic approach. I hope this article answers questions for those who are just beginning. The sooner you start the conversation, the more options you have to consider.