Introduction

Directors when reflecting on their own experiences are most likely to recognise times when they themselves and/or other directors shared different visions for the organisation’s future.

The range of visions may vary from a director who seeks to push for rapid expansion into new markets, or to generate new products and/or services, or to others who may advocate for a more  careful and conservative approach, pushing for consolidating existing operations.

Recognition of Tension

This type of tension – Strategic Direction, is common among boards.

Whether the organisation operates in a mature market or sector, or one that is dynamic, most operating environments will reveal market or sector conditions and technologies that are rapidly evolving. Constant change is a consistent companion to nearly every organisation and the only challenge is identifying and understanding its nature and dimensions specific to that organisation.

In many of today’s boards, the directors bring a very diverse mix of backgrounds, experiences and perspectives. It is exactly the richness of this mixture that can lead to directors expressing differing opinions on the best path forward for the organisation.

Since most boards have at least one director with expertise in finance, let’s consider the example of a director with a financial background. Their approach might be to prioritise cost control and risk management, while a director with, for example, a marketing background might be more comfortable to push for aggressive growth and market penetration.

Possible Outcomes

1. Endless Discussions
   The board may spend excessive time debating strategic options, which can delay decision-making and implementation. Or worse, there may be the need to defer discussions or send it off to a committee or working group.
2. Fragmented Strategy
   Seeking a consensus can be an exhausting and time-consuming activity. And where no agreement is reached with directors then the organisation might end up with a cobbled together strategy or one needing to be put together by the CEO. This isolation of sound input from directors is likely going to lead to a fragmented strategy that lacks sufficiently higher-level coherence and focus.
3. Inconsistency
   The organisation might oscillate between periods of expansion and periods of conservative consolidation, leading to poor use of resources, staff engagement and lower productivity through inconsistent performance.
4. Board Divisions
   Sometimes, differences in views and expectations around what the organisation needs to action can lead to the creation of informal factions within the board. This then may lead to the undermining of a board’s level of collaboration and trust.
5. Missed Opportunities
   Finally, delays in decision-making will, in today’s operating environment, lead to the organisation missing market opportunities which in turn can lead to a loss of competitive advantage. When this occurs, it can lead to an organisation losing its competitive position and in turn, miss out on its ‘window of opportunity’ to establish a sustainable and successful future. This may have permanently passed it by.

Factors that may Exist

• Unceasing Gaps
  A seemingly endless round of iterations to iron out the kinks in any strategic proposal can sap the energy of any board. Whenever this occurs during board meetings or sessions, it can dampen the enthusiasm and engagement of the best-intentioned director.
• Lengthy Discussions
  There are only so many times that a director needs to hear the views, opinions or arguments on a specific topic from each of their fellow directors without reaching a clear outcome and/or decision. To keep returning a particular subject and/or topic to the board for further discussion is often fruitless and counterproductive.
• Repeated Revisions
  If a board becomes too engaged in the revisions of a strategic plan, then it is most likely demonstrating an unhealthy level of comfort in being involved in the weeds. What springs to mind in these circumstances is a board that is operating with a lack of alignment.
• Board Dynamics
  A lack of a sufficient level of understanding of each director’s strategic preferences can easily lead to an unhealthy reliance on forming factions or alliances among directors. Too often these strategic preferences are beneath the surface and would therefore benefit from an external party looking ‘under the bonnet’ to identify the issues.

Possible Solutions

1. Establish Strategic Framework
   Seek to establish a clear strategic framework that outlines the organisation’s mission, vision, and core values within an agreed period. Also, ensure enough resources are allocated to achieve this outcome.
2. Facilitated Strategy Sessions
   Don’t be tempted to undertake a strategy session inhouse. Look to conduct facilitated strategy sessions with an external expert who can guide discussions, ensuring all viewpoints are considered and helping to mediate conflicts.
3. Higher Order KPIs
   Before adopting the strategy ensure it has appropriate measures for the monitoring of the organisation’s performance across multiple dimensions including financial, stakeholder, employee, culture, processes, staff well-being and welfare, and learning and growth, to name a few. This can help align directors by providing a comprehensive view of the organisation’s performance.
4. Board Development
   Finally, be prepared to conduct regular board sessions that go beyond the more superficial aspects of risk, compliance, regulatory and finance development programs. All of those matters are to be taken as read. More helpful is to open up discussions around the boards collective strategic thinking and decision-making skills. The outcome of such an approach can see a material shift in the organisation’s health. This above all can readily lead to the organisation achieving above average success and delivering a sustainable future.

Conclusion

By proactively managing strategic direction tensions, boards can harness the diverse perspectives of their directors to develop robust, innovative, and cohesive strategies that drive the organisation’s health, its success and long-term sustainability.

DISCLAIMER: This article is general only in nature and is not advice.