Transcript Better Governance for Better Schools

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Consequential Governance
BRooklyn And Staten Island Heads
October 14, 2010
Cathy A. Trower, Ph.D.
Trower & Trower, Inc.
[email protected]
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Why do nonprofit boards too often
underperform?
Because they can.
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The Central Proposition
“Trustees who understand their responsibilities
are the best hope for the careful consideration
of the long run.”
-- Henry Rosovsky
The University: An Owner’s Manual (1990), p.269
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What is great governance?
A mission focused, effective and efficient process to
frame issues and develop policies that shape the
strategic direction of the organization.
Helps assure that resources (people, time, and money)
are assembled and deployed for the successful
implementation of the organization’s plans.
Great governance is not a natural act.
 Intentionality and spontaneity
 Diligence and playfulness
 Comfort with ambiguity
 Ability to adapt
 Capital investment in all its forms
 Financial, social, political, intellectual
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Core board responsibilities
With management…
1. Determine the future of the School.
2. Ensure the quality of education and student life.
3. Protect the financial health of the School.
4. Ensure effective leadership.
5. Develop, evaluate, improve, and perpetuate an
effective governance function.
6. Reflect the community served and strengthen
relationships with key stakeholders.
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Most boards are more efficient than effective
 They meet periodically, and when they meet may not be in
sync with critical events at the School.
 They are comprised of very busy volunteers, who represent a
variety of backgrounds with different motivations,
propensities, and patience for service on nonprofit boards.
 When it comes to the School, they are part-time amateurs
overseeing the work of full-time professionals; governance is
not their “day job.”
 They have limited information and time available (during
meetings and between meetings) to think about and work on
the complex issues the School faces.
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“Good is the enemy of great”
--Jim Collins
Many boards are mediocre.
Some are pretty good.
Few are great.
 Board self-assessments tend to overrate governance.
 There is less tolerance:
 for thought than for action
 for ambiguity than for clarity
 for sense-making than for decision-making
 Routines fully embedded and, therefore, difficult to change.
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Governance as Leadership
Adapted, with permission, from the book of the same name by:
Chait, R., Ryan, W. and Taylor, B. (2005). BoardSource and John Wiley,
Inc.
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Modes of governance
What?
▫ Fiduciary: Stewardship of tangible assets. Oversee operations;
deploy resources wisely; ensure legal and financial integrity;
monitor results.
 ROLE: STEWARD
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RESPONSIBILITY: OVERSIGHT
How?
▫ Strategic: Partner with senior staff to think strategically; scan
internal and external environments; design, reflect on, and adapt
strategic plans; strengthen competitive advantage.
 ROLE: STRATEGIST -
RESPONSIBILITY: FORESIGHT
Why?
▫ Generative: Source of leadership to discern, frame, and confront
challenges rooted in values, traditions, and beliefs; engage in
sense-making, meaning-making, and problem framing.
 ROLE: SENSE-MAKER - RESPONSIBILITY: INSIGHT
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The 3D Organization
Type 1 Fiduciary –
Productive
Type 2 Strategic -Logical
Goals:
• Protect assets.
• Ensure resources used efficiently
& effectively in pursuit of mission.
Goal:
• Guide organization from
present to preferred future.
Governance as
Leadership
Type 3 Generative -- Expressive
Goals:
• Shape the thinking in the other two modes.
• Define the future.
• Frame the questions.
• Look for cues and clues.
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Modes on the Generative Curve
Framing
Fiduciary
Strategic
Generative
Opportunity for
Generative
Work
Thinking
Planning
Inquiry
Oversight
Time
Sense Direction Execution
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Value-added fiduciary work
Oversight
Inquiry
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• Hold what in trust for whom?
• Safeguards in place?
• Voluntary measures to earn
trust?
• What the opportunity cost?
• Insights from audit?
• Budget matches priorities?
• Do we take sensible risks?
• New program serves mission?
• Is it ethical?
• Do donors expect too much
control?
• Are staff treated fairly?
Due diligence?
Scandal free?
In compliance?
Can we afford it?
Clean audit?
Budget balanced?
Do we manage risk?
New program meets market?
Is it legal?
Can we get the gifts?
Is staff turnover manageable?
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Value-added strategic work
Planning
Thinking
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Money, space, personnel?
Compensation plan?
Build on strengths?
Size of market?
What is? [extrapolation]
Valid assumptions?
Can we see the future?
Traditional competitors?
Internal preferences?
Management must do what?
Business model viable?
Great place to work?
Victim of our virtues?
New markets?
What could be? [invention]
Make new rules?
Do we understand the past?
Nontraditional competitors?
Customer value propositions?
Board must do what?
THE GENERATIVE CURVE
Sense-making
Problem-framing
Opportunity
for Generative
Work
Strategies,
Policies
Plans, Tactics,
Execution
Time
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Opportunity to
influence
generative
work declines
as issues are
framed and
converted into
strategies,
plans, and
tactics.
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How do we reduce teacher turnover?
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Create great place to work
Fiduciary
Strategic
Generative
Opportunity
for Generative
Work
Align rewards with priorities
Modify pay plan & hours
Time
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Should we build a new fitness center?
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Fiduciary
Strategic
Generative
Opportunity
for Generative
Work
Make sense of amenities arms race
Discuss health/fitness in context of the
“whole” child
Strengthen market position
Build new fitness center
Time
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Fiduciary Questions
What are the fiduciary, but non-financial, roles of our boards and
committees?
What safeguards do we have in place to avoid fiduciary failures?
If we held an annual stakeholders meeting, what would we say about
the fiduciary performance and the board’s effectiveness as a
steward? What would they say?
What are our major financial vulnerabilities? What are we doing as an
organization and a board to address them?
Even though we are not bound by Sarbanes-Oxley, are there some
provisions we should adopt?
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Strategic Questions
Is our business model of viable over the next 10-15 years? If not,
what has to change?
How fast should we adopt new techniques to enhance our quality,
versus invest in process improvements and optimizing use of our
current technologies?
How can we assure we don’t just satisfy, but actually delight, our
students, teachers, parents, donors, employees, and community?
What external factors will most affect the School in the next 24
months?
What should be atop the board’s agenda for next year?
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Generative Questions
What will be most strikingly different about this School in five years?
What do you hope will be most strikingly different about this School in
five years?
What do you hope will never change about this School?
On what list, which you can create, would you like this School to rank at
the top?
Five years from today, what will this School’s key constituencies
consider the most important legacy of the current board?
What headline would we most like to see about this School?
What is the biggest gap between what the School claims it is and what it
actually is?
What is the most valuable action we could take to be a better board?
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Generative
Strategic
Fiduciary
Source of leadership
for organization
Strategic
partnership w/
management
Stewardship of
tangible assets
Chief role
Sense maker
Strategist
Steward
Core work
Find and frame
challenges, reconcile
values and choices
Scan environment,
shape strategy,
create comparative
advantage
Set mission,
oversee operations,
deploy resources,
ensure compliance
Conducive
process
Inclusive
conversations
Task forces, ad hoc
work groups
Standing
committees
Power base
Ideas, insights
Technical expertise
Legal authority
Board’s purpose
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Contested Territory: In Theory
CEO Danger Zone
• Bounded technical issues
• Relatively low stakes
• Scripted and staged by staff
• Preferred course of action clear
CEO Safety Zone
• Board handled, not engaged
• What could go wrong?
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Contested Territory: In Reality
• Board engages issue.
• Staff bristle or stiffen.
• Tug-of-war ensues.
• Board demurs or disengages.
• CEO frustrated or undercut.
Danger Zone
• Bystanders remote or resentful.
• Time and energy wasted.
• Marginal value added.
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Common Ground: Hidden in Plain View
• Look upstream.
Safety Zone
• Substitute substance for minutiae.
• Board more engrossed, less intrusive.
• Senior staff open-minded.
• Values, culture drive deliberations.
• Engage collective mind.
• Mitigate personal agendas.
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Underpinnings for success
• Thoughtfulness:
▫ Metacognition and “self-overhearing”
 (Philip Tetlock)
▫ Getting on the balcony
 (Ron Heifetz)
• Caution:
▫ “If you boarded the wrong train, it’s no use running
along the corridor in the opposite direction.”
 (Dietrich Bonhoeffer)
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Part II
Getting Traction
Impediments to critical thinking
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At board meetings
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“Thinking is the hardest work there is,
which is probably the reason why so
few engage in it.”
-- Henry Ford
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The most effective boards
 Are a strategic asset and provide a comparative advantage.
o Contribute in distinct ways to advance the mission.
 Add value and derive value from meaningful participation in
consequential discussions that yield important results.
o Enrich purpose to improve performance.
 Are self-reflective and more self-critical than self-congratulatory.
o Understand their role vis-à-vis management.
 Think independently and govern collectively.
o Model behaviors trustees want the organization to exhibit.
o Balance short and long-term perspectives.
 Learn and perpetuate a culture of learning and inquiry.
o Avoid diagnosis momentum.
o Practice dialogue and dissent.
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At a typical board meeting…
• What percentage of intellectual capital is untapped?
• What percentage of time is put to good use?
• How often are ideas put into play v. explanations and reports?
• What are you optimizing? (quicker OR better decisions)
• What are the goals of board meetings?
▫ If we wanted better thinking, what would we do differently?
• In addition to periodically asking, “How are we doing?”
boards should stop and ask, “What are we doing?”
• Practice arrests thinking; becomes routine/habitual
▫ What about board meetings stifles thinking?
▫ What might we do differently to enhance thinking?
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Steps to Better Governance
• Find. Frame. Focus.
▫ Figure out what matters most, how to frame it, and how to add value.
• Structure for strategic intent.
▫ Strategy should drive structure, not simply mirror the organizational
chart.
• Build a boardroom culture of inquiry, learning, and high team
performance.
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Ensure dialogue and debate on critical issues.
Fit format to content and purpose.
Have goals and outcomes.
Summarize implications, expectations, next steps.
• Engender accountability.
▫ Evaluate the board’s performance, individual’s performance, and board
meetings.
▫ Make decisions as if you had to explain them to stakeholders.
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Find. Frame. Focus.
• Describe reality, highlight critical clues and signals.
• Avoid deep dives into shallow pools.
• With management, decide what to decide.
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What are most important questions to address in next year?
How might we frame the issues?
Establish decision agenda.
Wear “tri-focals” to examine “triple helix” issues – fiduciary,
strategic, and generative (mission, values) perspectives.
• Co-determine annual work plan, timing, and agendas.
• Schedule KHAAN dialogues. (Keeps Head Awake At
Night)
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Structure for strategic intent
• Strategy should drive structure, not simply mirror the
organizational chart.
• Ensure that the board drives committees, not vice versa.
▫ Develop derivative agendas for committees.
▫ Encourage board to assess, merge, differentiate, eliminate committees.
▫ Streamline structure to increase impact, broaden participation.
• Propose and empower strategy-driven, outcomes-oriented task
forces.
• Coordinate and integrate committee work.
• Wean staff from tightly coupled committees.
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Build a culture of inquiry.
Fit format to content and purpose; emphasize themes.
At the outset: State meeting goals outcomes and how the board can add value.
Furnish less data with more meaning (e.g., dashboard).
Maximize discussion; minimize presentation by creating efficiencies.
Consent agendas
On-line work
Flash reports
Pre-clarification protocol and responsive reports
Broaden participation.
Advance surveys
Advocacy panels
Silent starts
Anonymous input
Role plays
Breakout sessions
Ensure robust discourse, dialogue, and debate on critical issues.
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Tap trustees’ intellectual capital.
Develop and disseminate advance discussion questions.
Insist on confidentiality.
Encourage collegiality, elicit dissent.
Pose catalytic questions.
Entertain various “what if” scenarios.
At the end: Summarize implications, expectations, next steps.
• Be clear about what we did and will do.
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Build the board team.
• Teamwork
Have clear, compelling, consequential, challenging goals
Avoid group think through appropriate deliberation
Maintain an appropriate sense of urgency
Articulate team goals; do not allow individual goals to take precedence
over team goals
 Get to know each other personally/attend to social capital/build trust
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• Courtship before marriage
 Personal style as well as technical expertise
 Be mindful of group dynamics, culture, values
• New trustee orientation
 To the organization and board norms/culture
 Provide mentors, glossaries, directories, connections, frequently asked
questions
• Succession planning
 Enforce term limits, not just terms
 Attend to succession for trustees, chairs, board officers
 Be transparent
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Engender accountability.
▫ Position board as a model of performance
accountability.
▫ Disperse responsibility for the quality of governance.
▫ Make decisions as if you had to explain them to
stakeholders.
▫ Enforce group norms; do not tolerate violators.
▫ Evaluate the board, individual trustees, committees,
meetings and demonstrably respond to results.
▫ Hold executive sessions for reflective practice.
▫ Convey examples of board’s pivotal contributions
and shortfalls.
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Handle the Board
Engage the Board
Executive
Choices
Bring mid-curve proposals
to
Bring top of curve challenges to
approve
frame
Emphasize decision making
Emphasize sense & meaning
making
Downplay tough
questions/surprises
Highlight tough
questions/surprises
Engage allies bi-laterally
Engage board collectively
Work outside the boardroom
Work inside the boardroom
Get buy-in
Decide what to buy
Persuade and prevail
Discuss and deliberate