Leading at Light Speed by Eric Douglas

Categories » Governance Development

September 18th, 2009

Good Governance Development – A Consultant’s Story

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good governance

I worked recently with the Board of Directors of a large public power company. They needed stronger governance systems. I talked about how effective boards work. I detailed our approach.

“With our framework,” I told them, “the board expresses exactly what it wants the organization to achieve in the form of policies. By defining what it expects in writing, and by regularly monitoring those policies, the Board can do its job, staff can do its job, and the organization can achieve high levels of performance.”

“But we already have policies,” one board member said.

“You do have policies,” I said. “But those policies are not the board’s policies. They are a mixture of state and federal policy, with a lot of your staff’s policy thrown in for good measure. I’m talking about a separate set of policies that express only what the Board wants the organization to achieve.”

“Why would we need that?” said another board member. “Our policies seem fine to me.”

“Because it would enable the board to communicate as a board,” I said. “Right now, you communicate as individual board members. But the board of directors is a single entity, and the board needs to say what it wants. Otherwise, your staff has to guess. And that leads to all sorts of mischief and mayhem.”

“Maybe we like it that way,” said one board member. “We can then tell them to do what we want.”

“Is that really how you want to communicate?” I asked. “What if you had 20 bosses, all telling you different things? How long would you last in that organization?”

I let that sink in. “Look, the best boards in the country use this framework. I’ve seen the results. It enables the organization to be clear about its priorities, clear about its measures of success, and clear on how it’s going to evaluate the general manager or CEO. That’s good governance. All boards should aspire to it.”

“Well,” said one board member. “Maybe we just like doing it our way.”

At least that’s honest, I thought to myself. Out loud, I asked, “How many of you would like to move toward this framework? How many of you would like to try this?”

A few hands went up, and then a few more. I looked at the one board member who was most vocally resistant. Slowly his hand went up, too. I looked around. All the board members were raising their hands.

“All right,” I said. “It looks like you have made a decision. Let’s figure out what you want to do next.”

Related Article: “Good Governance and Performance Goals“

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March 2nd, 2009

Good Governance and Performance Goals


good governance

I was talking about good governance with an elected official, a member of a city council. “What do you do to encourage good governance?” I asked him.

“I ask people what’s going on. I ask employees at all different levels how they’re doing. That’s how I find out which departments are well managed, and which are not.”

“Really?” I asked.  “Is that how you spend your time?”

“I think that’s why the people elected me – to find out what’s going on.” He said the city charter permitted him to “get whatever information he wanted from whomever he wanted.” He could call a parks employee, ask why the grass hadn’t been watered, and expect the employee to tell him.

“Who would let the city manager know?” I asked.

“It’s not my job to tell the city manager,” said he said. “I assume the employee will tell him.”

“But couldn’t that lead to chaos?” I asked.

“I don’t know.”

“What about determining the overall direction of the city, and setting long-term policy, and setting performance goals for the city. Isn’t that the city council’s role?”

“We don’t have performance measures,” he replied.

“Well, that explains a lot.” I smiled. “Listen, you have no formal feedback mechanisms. So you’ve had to go out and invent your own. I can understand that.”

He nodded. “Do you know how I measure whether the streets are being cleaned? I put a newspaper in the gutter and then check a day later to see if it is still there.”

Imagine what would happen, I said, if the city council did define performance measures. “Then you could focus on measuring performance, not as individuals inventing your own measures, but using agreed-upon measures. That would create alignment at the top – and lead to a clear understanding of everyone’s role.”

The city councilman grinned. “That would be a good trick.” He said his goodbyes and left.

Yes, I thought to myself. It is a good trick.

Read Related Blog: “Good Governance Development“

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February 28th, 2009

Good People, Bad Partners: Conflict Resolution through Good Governance Policy


good-people-bad-partners

What makes good people be bad partners? Over the past month I’ve witnessed the dissolution of a law firm’s 15-year partnership. It began when one of the senior partners filed for divorce. The timing was unfortunate. It came just weeks before two high-powered associates were scheduled to buy shares. A buy-in signals the value of the stock. Fearing the repercussions, the senior partner (the one with the looming divorce) announced he wanted to put the deal on hold. “We have to wait,” he told his colleagues. Secretly, he was holding out for more money.

Fast forward two months. Five partners split away, forming a new firm, taking several associates with them, including the two who were scheduled for the buy-in. The senior partner became one of four shareholders in the firm. Three months later, the firm filed for bankruptcy, citing an excess of debt and an inability to draw in new investors.

Could this have been prevented? Of course. With the appropriate governance mechanisms, the firm could have put in place systems to deal with conflicts such as these. It requires trust to build those types of systems – and a desire to make those decisions long before trouble occurs. Most important, everyone needs to assume responsibility. In this case, they hadn’t. And that made all the difference.

Next blog post: Our Change Management Model

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January 13th, 2009

A Balanced Scorecard for Public Agencies


public agency scorecard

I work with a lot of public agencies and their Boards of Directors. Typically, my focus is on helping these Board develop a high-level scorecard that the Board can rely on for measuring the organization’s performance. This, in turn, will accelerate the organization to attain higher levels of performance.

The important thing about the scorecard is that it has to be balanced. It has to balance all the aspects of what is essential to the organization’s success – from financial sustainability to customer satisfaction, from product reliability to ethical integrity.

The organization’s core values are the things that, if the organization could speak for itself, it would say are most important to it. Each of them can be measured. A balanced scorecard will look at 8-10 different categories of core values and assign metrics and targets to each of them. A tool on our website called Developing Core Values explains this in detail.

An unbalanced scorecard, in contrast, will have too many metrics. They won’t be focused on outcomes, but rather on outputs. Too many of them will fall into one category, like financial. Other core values, like integrity or environmental stewardship, may be neglected.

Read Next Blog Article: “Corporate Leadership Development Program“

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September 24th, 2008

Executive Corporate Board and the Disruptive Member


executive corporate board

I facilitated the work of a Board of a major medical center on Monday. It was their second day-long offsite. The purpose of the first offsite was to clarify that the Board no longer governed the institution, but rather was an advisory, fund-raising board. This was a hard conversation, because three of the six founders of the institution still served on the Board – and they still saw themselves as “owners” and thus governors, even though the center was now governed by a much larger university. It took some powerful facilitation – and at times heated conversation – to iron that issue out.

This time, we focused on the need to expand the medical center campus. The Board needed to take the lead in raising $50 million. My goal was to get them to commit to raising the money as their top priority. Everything hinged on the preparation. I worked with the CEO, helping him polish his argument. I also worked with the fund development director, helping her hone her case for change. Their presentations came together nicely. By noon, I called the question. “Are you ready to commit to this as the Board’s top priority?” I went around the room, asking each person to declare his or her position.

It worked beautifully. Every single Board member agreed the top priority was raising the $50 million. We then spent the afternoon defining who would be responsible for what. Who  was responsible for introducing new prospects (Board members), who was responsible for qualifying prospects (staff), and who was responsible for making the ask (senior staff).

Lewis, one of the founding fathers, joined the meeting in the late afternoon. He raised his hand, and when I called on him, he said he didn’t see the need for the expansion. I explained that we were now discussing how to implement the Board’s goal. He asked the CEO to explain the need. I cut him off. “We’ve already covered that,” I said. “We’re moving on.” I felt badly. But it was my job to keep the Board on track.

After the meeting adjourned, many people came up and told me I’d done a superb job. I took the Board chair aside. “What did you think of how I handled it?”

“You did exactly the right thing,” he said. “Even though he is capable of making a gift of $5 million, we can’t let him disrupt our meetings. You handled it just right.”

Related blog: “CEO Coaching Lesson: Board Development“

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September 7th, 2008

California in Crisis: My Modest Budget Proposal


california_0

The great California budget deadlock of 2008 has now reached record territory. The business of the state has ground to a halt, programs aren’t able to move forward, schools are in disarray, people aren’t being paid – all because the governor and legislative leaders have boxed themselves into a corner. It is easy to say it represents a new low in California politics. It’s harder to say what the long-term solution might be.

Over dinner tonight, a friend of mine, a former state senator, suggested a constitutional convention. “We need to rethink everything,” he said. “We need to rethink how we elect people, the initiative process, the two-thirds vote. Everything.”

I suggested the solution was in my book “Straight Talk.” The key, I said, is that the players need to agree on the process up front. They need clear ground rules, and there needs to be a neutral facilitator. One of the ground rules should be that legislators and staff don’t get paid once the deadline expires. Another should be that no one can take a hard position in advance. For example, no signed statements against a tax increase or against a particular funding category. Another rule should be that lawmakers agree to support whatever budget comes out of the process.

“Do you really think it would work?” he asked.

“Yes, it would, if everyone agreed that the status quo is unacceptable.”

“Ah,” he said, ” I knew there was a catch!”

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June 27th, 2008

Managing the Board of Directors


team-work-for-success

Today, I met with the head of a large public agency (10,000 employees) and we talked about managing his Board of Directors so that they are supportive of his vision.

“You need to engage them early in the process,” I said. “Ask them questions. Enable them to own the direction.”

He gave me a quizzical look. “They don’t see eye-to-eye,” he said. “How can I do that?”

“It’s all about leverage,” I replied. “You have two Board members who want to be seen as driving the direction. Leverage their desire to be perceived as leaders.”

We talked about a strategy for doing that, for giving them a platform to articulate their visions for the organization.

Bill said: “Can you help facilitate this discussion?”

“I can, but I would prefer that you do it.” I looked at him. “You’ve led a fighter squadron into battle. Surely you can manage this Board.”

He hemmed and hawed.

“Can you envision how much more quickly you could implement your changes if the Board was fully behind them?”

Yes, he nodded.

“Can you envision these two Board members buying into your vision, once you buy into theirs?”

Yes.

“Do you think your visions are incompatible, or is it only in the details of execution you disagree?”

We’re aligned overall, it’s just in the details that we have some differences.

“That’s pretty common,” I said. “So what’s the worse that could happen?”

Bill pushed back his chair from the table. “Certain Board members are loyal to certain groups,” he said. “If I’m not careful, those groups could become too powerful.”

“In my experience, power changes hands when there’s a vacuum of leadership.”

Bill nodded his head. “I see what you’re driving at. I need to do this in order to get the organization aligned.”

“Taking responsibility invariably means making a choice,” I said. “If you’ve made the choice, then we can talk about the details of how to engage them.”

Next blog article: “Board Development Training“

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