Board Governance: Planning, Communication and Performance

            Behind every successful Chamber Executive is an engaged and empowering Board of Directors. It is the paradoxical role of many Chamber Executives to help drive this empowerment and engagement while at the same time respecting the nature of the Board’s governance responsibilities and their volunteer status. It is the Board’s role as the “boss” to determine overall organizational strategy; it is also the role of individual Board members to support the professional staff in implementing that strategy. According to Shane A. Moody, CCE, IOM, President and CEO of the Destin Area Chamber of Commerce, “one of the most important elements of a successful Chamber of Commerce is an engaged and active Board of Directors who will let the Exec run the day to day operations to accomplish the Chamber’s goals”. 

            All Boards have their own personality and expectations. Chambers of Commerce can become mired in unnecessary bureaucracy if the communication between the Executive and the Board is not fluid and grounded in results. Helping to gently guide and direct the Board, while at the same time letting them lead the organization’s strategic direction is at the heart of what Chamber CEO’s must balance.   The keys to achieving the necessary balance are to clearly articulate and communicate the roles and responsibilities of both the Board and the Executive, jointly establish a well-researched strategic plan for moving forward, identify results-oriented performance goals for all staff members, and define and document decision-making authority for key, critical issues. Each area will be examined in more detail. It is important to note, that these recommendations are not absolute. As always, the organizational context and environment may dictate a slightly different application.

1.  Clearly articulate and communicate the roles and responsibilities of both the Board and the Executive. This goes well beyond a standard job description, as it should clarify where Board Governance stops and the Executive’s performance begins. For example, the Board, as a collective, is responsible for ensuring that the organization has adequate financial resources to accomplish its purpose. This does not mean that every decision to spend any amount of money should have to be pre-approved by the Board. The professional Executive’s spending authority can be encompassed in a budget that outlines how much money may be spent on specific line items. Spending outside of the established budget, could require Board approval. Clarifying these expectations in advance is the responsibility of both the Board and the Executive. 

2. Jointly establish a well-researched strategic plan for moving forward. The strategic plan, which includes the organizational vision, mission and operating principles, is one of the most important documents that Chambers of Commerce can create. The plan itself should form the foundation for action planning, decision-making and performance measurement. Once the plan has been established by the Board and the Executive, it should be a constant reference source when decisions are being made and action is being taken. It is the responsibility of the Chamber Executive to implement the strategy by using both Board and Staff resources. Two ways to keep the plan alive is to use it as the basis for results discussions in Board meetings and as a sounding board for new ideas. Constantly ask the question: “How does that fit with our strategic goals?” or “What strategic goal will this action help us accomplish?” If there is not a good answer, either the idea or the plan should be re-evaluated.

3. Identify results-oriented performance goals for all staff members. Performance measurement is the “needle and thread” that connects organizational strategy to execution. Everybody is much more likely to hit a target if they actually aim for it. The foundation for staff performance goals should stem directly from the strategic plan. The Board’s role in establishing or reviewing the goals may be different based on the organization, but goals and measurements should always be established so that staff members have a target to aim for and a yard-stick with which to measure success.

4. Define and document decision-making authority for key, critical issues. This is a sensitive area because it assumes that the need for decisions will always follow an established guideline and timeframe. While we all know that is not so, confusion and mistakes can be avoided if there are ground rules established in advance with respect to who can make what decisions and under what circumstances for issues that are generally time sensitive or especially visible to the membership, stakeholders or the community at large. An example of this decision-making rubric could be to establishing a written set of parameters for who may speak to a member of the press and on which issues.  For example, a general guideline followed by many Chambers of Commerce is that any request for information coming from a media source to the staff should always be referred to the Chamber Executive. The Exec may be authorized by the Board to share the Chamber’s position, pre-determined by the Board, with requesting media outlets. Any request or question beyond what was previously authorized may need to be referred to the Chairman of the Board. Many times, requests from the media are time and issue sensitive. By having clarity regarding who can say what to whom, the organization can avoid issues on either front. Again, the actual decision-making authority parameters may differ by organization, but the important element is to establish those parameters in writing before a crisis erupts.

       Running a well-oiled Chamber machine is a challenge even on the best of days. Taking the time to make sure that authority and expectations are explicit, rather than assumed, will make everyone’s job a little easier and should result in greater empowerment for the Chamber Executive and more engagement by the Chamber’s volunteer leadership. 

The debate that “for profit” and “nonprofit” organizations must, by their very nature, be run differently is a topic that has been discussed and debated by many. In a column he wrote for The Non-Profit Quarterly, Jim Collins, author of the business bestseller Good to Great, believes that whether in a business or nonprofit organization “… the ultimate measuring stick of a leader—must be results.”(Collins, 2008) While the way a leader gets results may vary with the type of organization, getting results is still the name of the game.

Maximize internal operating efficiency

Keep hosting and holding events and continue promoting the opportunity to do business in your community, however, everything must be scrutinized in light of its true value to your stakeholders so that no money or time is wasted; the margin for financial error is narrower now than it has been in decades. Fortunately, nonprofit leaders are well-seasoned at squeezing the most value out of lean budgets, and that skill will be honed to a razor sharp edge in today’s environment.

Many nonprofits have already begun paring down their budgets based on anticipated or actual decreases in available funds. By re-thinking “the way things are always done around here” and committing to evaluating everything with a fresh, new and open perspective, you’ll probably discover ways to save money without impacting service delivery. Albert Einstein once said that “the significant problems we face today cannot be solved by the same level of thinking that created them.” Innovative thinking has never been more relevant than it is today.

Eliminate “Waste”

Arising from the disciplines of Total Quality Management (TQM) and Lean Six Sigma (LSS), one tool has emerged that is easy to understand, easy to use and guaranteed to get results in every organization. The somewhat unfortunate name of the tool is “The Seven Areas of Waste”. By “waste”, we mean potentially unnecessary activities, actions, steps, equipment, storage and processes used to run your organization. In a perfect world every product or service you provide would specifically meet your members’ needs, would be produced flawlessly and delivered instantaneously. Yeah, right!! However, trying to move closer to the perfect world scenario is always better than moving in the opposite direction. In addition, by taking specific actions to move forward, your organization will become more efficient and effective in using its limited resources.

In order to eliminate “waste”, the entire staff needs to understand where it can be found. In addition, everyone needs to take a proverbial step-back from “the way things are always done around here” and commit to looking at everything with a fresh, new and open perspective. A tool that has been used by many organizations is called “The Seven Areas of Waste”.   Each of the seven areas has a particular definition to make it easy to remember  and to understand. You can remember each area by using the acronym W.O.R.M.P.I.T. It fits, doesn’t it?! Here is an explanation of each area.

W. is for Waiting. This refers to the time a person or process has to wait for someone or something else to finish what it is doing. An example could be the time spent standing over the printer waiting for a document to print because there are several other ones ahead of yours, but you don’t know that. Another example could be the time checks for membership dues or contributions are waiting to be processed by someone who is busy with other things or may be out on vacation. Waiting cannot always be eliminated, but if it is identified as something that wastes resources then everyone may look for creative ways to reduce it.

O. is for Overproduction. Producing too much or too many of anything is considered waste. There are a variety of types of overproduction, but some common ones are producing more newletters, magazines, tickets, announcements, etc… than you will need or use. Another type of overproduction is making too many copies of paperwork for the files or printing and re-printing a document because there are errors or omissions that should have been caught before printing. Printing electronic documents that can be stored and read on the computer can also be classified as overproduction. One classic type of overproduction for organizations is the need to re-type the same information multiple times in a database that won’t allow the information to automatically populate once it is entered in a main area. Again, everything that is overproduction may not be able to be eliminated, but trying to will help save money and time.

R. is for Re-do. This refers to defects, errors, inaccuracies in any type of product or service which leads to taking corrective measures or re-doing the work. This can also mean entering the incorrect information on a form which can cause loss of money, membership or donor dissatisfaction and wasted time.

M. is for Motion. Motion is defined as extra steps taken by employees because of inefficient physical or electronic lay-outs. One example may be how far everyone has to walk to retrieve ordinary office supplies or to go to the restroom. Different organizations have different policies about the security of office supplies or the security of the building. In many cases, the policies are well thought out. However, there are cases where security is in place because a problem happened 5 or 10 years ago, when everything about the set-up was different. Requiring employees to walk to a central location, retrieve keys, complete the business they needed the keys for, then return the keys to the remote location can be considered a waste of motion.

P. is for (Extra) Processing. Extra processing can occur when other processes are not being handled correctly. If it is the responsibility of one employee to obtain new member or donor  information on a form, but it is not being completed, then a second employee may be required to compensate by gathering the information that should have been captured the first time. Anytime something has to be done more than once, it can be considered extra processing. Inspections are also considered a waste of time because work should be completed correctly the first time. If that is not happening, there may be a process (i.e. form, computer, database, etc…) problem or a person (i.e. accountability) problem.

I. is for Inventory. Excess inventory occurs everywhere. It often results from overproduction of materials or from ordering in bulk. While bulk rates may be better, it would make sense to consider how much of certain items never get used and how much the wasted items cost. Looking at bulk purchases from that angle may mean that you save more money by only buying what you need.

T. is for Transport. This refers to moving documents, equipment, and other things around rather than people. For example, if signs and banners are transported to and from the same place every month there is more chance that they will get damaged. If something consistently moves back and forth from the same place, it may make sense to investigate ways to leave it in place. In addition, if documents, checks, applications, forms are being moved from person to person in the office so that each person can do what they need to do to it, there is more chance of those items being lost or damaged in the shuffle. Consider re-distributing work in a way that reduces or eliminates transport to decrease errors and damage.

W.O.R.M.P.I.T. in action

One easy way to use this tool is for eveyone on your team to use a clipboard, write the word W.O.R.M.P.I.T. down the side of a page and have everyone take 15 minutes to walk around the office looking for waste. Have a contest to see how many areas of waste can be identified then take steps to reduce or eliminate all the ones you can. Don’t get hung up on wether a “wasteful” practice fits into one category or another, just take a fresh look at your whole operation using the tool. Have everyone come back into a central location and create a common list of all the opportunities you’ve found to eliminate waste and promote efficiency.

Everyone is being asked to do more with less these days, so why not take advantage of a useful and easy to understand tool to make some decisions about how your organization can accomplish that. You might also have a little fun in the process! 

Bibliography
Collins, J. (2008). What Makes Powerful Nonprofit Leaders. The Nonprofit Quarterly, http://www.nonprofitquarterly.org/content/view/256/28/.

 

Every brilliant solution to a problem or opportunity has been or could be made even more brilliant by adding more brainpower!  Granted, there are individual geniuses in this world, but many of them use others as a sounding board, at the very least, for refining their genius.  Much has been researched and written about the power of teams and teamwork, but (again paradoxically), many leaders don't fully capitalize on that power.

One reason for under-utilization of teams may be their human complexity. People just don’t behave predictably or consistently. It takes work to pull a group of individuals into a team. Great teamwork requires great team leadership. It is harder than it looks. Most students of business know about how teams “form, storm, norm, then perform”.  It is that “performance” expectation that often gets in the way of developing enduring teamwork. Because leaders are accountable for results, they tend to focus their energy and attention on reaching the goal quickly and, consequently, can inadvertently undermine the long-term success of a team-based endeavor.

The best leaders balance their focus across three dimensions that all dramatically impact team performance and development. The three areas are results (what gets accomplished), process (how the work gets accomplished) and relationship (the interactions of those who accomplish the what and the how). For the moment, we’ll focus on the relationship aspect. In the future, more on results and process.

Most successful professionals are rewarded for solving problems quickly and are rarely “punished” for accomplishing a goal at the expense of another person on the team. Effective teams are formed through deliberate actions, starting with clarification of roles, responsibilities and expectations. Expectations should extend beyond the basics of performance; they should include principles (operating principles) that define how the team members will interact with one another. These principles specify the critical “relationship” dimension of great teamwork. An example of establishing an operating principle would be clearly identifying an expectation of mutual respect within the team. Further dialogue should include what “mutual respect” looks like and how it is demonstrated amongst team members. By fostering and encouraging this discussion, great leaders are setting up teams for long-term success.

In addition, team members must be cognizant of the need to be open and honest and assume positive intent. The assumption of positive intent means that when a teammate gives constructive feedback, it is assumed by the receiver to be positively motivated. The clarification of these principles as an expectation helps to ensure that “group-think” is avoided. Constructive dialogue is essential to team performance and must never be discouraged.

Mutual respect and assuming positive intent are just two of a myriad of operating principles that will help guide teams to successful goal achievement. The key, however, is to balance relationship principles with a clear performance mandate so that one does not over-take the other. Taking a thoughtful, goal and relationship oriented approach to team-building is a core skill of great leaders and one which cannot be over-valued in any organization!