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High performance Conscious Strategic Boards utilise a range of strategic tools, practices and accountability mechanisms that enable them to provide conscious governance and leadership at a strategic level.

This article explores these tools, which include:

Tool 1: Creating a Vision Filter

Tool 2: Creating a Conscious Strategic Board (a mixture of skills based and representational Board members, strategically focused agenda, and transparent and publicly acknowledged accountability measures)

Tool 3: Involvement of a range of stakeholders (Board, constituents, staff, suppliers etc) in identifying strategy

Tool 4: Embedding ethics into the strategic planning process

Tool One: Creating a Vision Filter
Both corporate, government and Not for Profit organisations often develop vision/mission statements that embody the core values and purposes of the organisation. More often, however, these vision/mission statements are not actually used, nor are they used as a guiding filter for the activities of the organisation. Not for profit organisations are best at using their vision, as they frequently have a powerful sense of purpose. They are typically created to fulfil a vision or a need of a group of people, and most often have the ethos of adding value to society and "doing good" generally. They have very strong views on what is appropriate, what are core values for the organisation, and what is their core purpose. Most Not for Profit organisations have either a formal Vision/Mission statement, or such a strong sense of purpose that this has not needed to be defined in words. The key benefit of this sense of purpose, or Vision, in corporate, government or Not for profit organisations is that it attracts people and resources to that organisation, hence the strong history of volunteer time or resource donation to the Not for Profit sector. This sense of purpose provides guidance to the organisation in good times and bad.

Truly successful organisations create Vision statements that act as filters for all activities and programs that they are involved in.

Vision statements provide the context where the Board, the staff, constituents and the public all share a common expectation of the organisation. This common expectation can be one of the organisations most powerful management tools, as well as a powerful marketing message.

If your organisation has a current Vision or Mission statement, conduct the following exercise.

Take each of the substantive words in the statement, and ask the questions:

a. What is your organisation actually doing to ensure that the intent behind this word/concept is embedded into all programs and services of the organisation. After all, the Board has agreed that the Vision/Mission statement embodies the guiding principles behind all the organisation stands for.

b. How are all new or proposed programs filtered through the statement to ensure that the intent of the Vision/Mission statement is structured in to the program.

c. Are the Board and staff able to express the key concepts and intent behind the Vision/Mission statement? The exact words are not important, but the intent is crucial.

Tool Two: Creating a Conscious Strategic Board

The nature of corporate, government or Not for Profit organisations has meant that they are typically expected to be highly accountable to their members, constituents, funding bodies and to society generally. Board members of high performance organisations, by and large, are most interested in being efficient, effective and accountable. This in turn has led high performing organisations to develop Strategic Boards. These Strategic Boards have a number of characteristics in common.

Characteristic One: Conscious Strategic Boards are increasingly being made up of Non-executive Directors, chosen either for their representation of a certain sector, or their skills necessary to move the organisation forward. A mixture of representation and skills based Board members is most common. The practice of Board succession planning is taken seriously, with Board skills analysis providing key planning guidelines for the Board, and allowing the board to focus on extracting the most value from Board members.

Characteristic Two: Conscious Strategic Boards are focused on public and constituent accountability, and typically reflect this by providing annual reports that provide appropriate details of strategic plans, achievement against strategic plan success measures, forward projections for future years and how these tie in to the strategic plan. One of the best examples of this is the Epilepsy Association Australia's annual report, which covers areas under headings such as" What we are, What we do, Key influences in year, Key strategies, Planned for this year, Achieved this year, Planned for next year, Outlook and issues, Performance targets for next two years, Why selected, Progress in achieving, and Benchmark comparisons. (1)

Other accountability measures include Board appraisal systems that allow the Board to reflect upon its own performance in light of the strategic plan and other agreed measures.

Characteristic Three: Conscious Strategic Boards are skilled at ensuring that the CEO is accountable to the Board. The CEO's performance is typically reviewed at least annually, if not every 6 months. Directors of a Conscious Strategic Board are most often in that position because they share the same values as the organisation, and will protect those values even against a strong-willed CEO. Whilst this can be a continual source of annoyance for the CEO, it does protect the organisation from staff who might wish to take the organisation in a direction at odds with the Boards wishes.

Characteristic Four: High performance Conscious Strategic Boards are typically focused on core purpose, and the agenda for the Board meetings often reflects the strategic plan, which in turn reflects the core purpose of the organisation. This ensures the Board is focused on those key activities they have already agreed are the most important things to the organisation. Most Boards have very operational agendas that reflect how well particular projects or Divisions are going, rather than their contribution to the achievement of the strategic plan. Boards should review the agenda of their Board meetings to ensure that the following are included: inclusion of a consent agenda item, declaration of conflict of interest, financial reports, Board Operation reports from Board committees (eg Finance/audit, Succession Planning and Compliance committees), reports on outcomes from relevant action plans from the strategic plan, professional Board development, other business, and a section on changes to the strategic environment.

Tool Three: Stakeholder involvement in strategy setting

Most organisations typically have a number of stakeholders that are interested in being part of the organisation. These stakeholders are often invited to participate in strategic planning, as it cements the relationship as well as adds value to the planning process through the additional perspectives and skills of the participants. For example, the Australasian Institute of Banking and Finance (AIBF) invited 76 stakeholders to participate in its strategic planning session. These stakeholders included strategists from the major financial institutions, CEOs of similar Not for Profits (eg the Insurance Institute, the Financial Planners Association, the Australian Society of Corporate Treasurers), senior HR staff of financial institutions, students, older members, non-members, and academics.

The most effective strategic planning process involves those people who can add value to that process. It is a mistake to use only the senior staff or the Board of the organisation in the planning process. Senior staff, constituent representatives, supporters of the organisation, perhaps even some 'competitors' should be considered for the planning team. Planning teams made up of only staff leaders or the Board may not be functional, as there is a tendency for CEOs to attempt to create something distinctive during their term, and often 'pet' projects get emphasised.

The first step in the strategic planning process is to identify those individuals necessary to the development of a Strategic Plan for the organisation, and to get support from these individuals for the planning process. These individuals should be chosen for their knowledge and skills, not just for their position in the hierarchy. Included should be a mix of constituents, Board members, senior staff and some outside people who are not as familiar with the operations of the organisation. There is no ideal number of participants for the planning team, but it should encompass individuals who represent different skill levels in knowledge, expertise and thinking styles, and more importantly, in group dynamics. The group is typically around 10-18 people.

The roles of the various groups in the strategic planning process can be summarised as:

• The Board - monitoring role: The Board ultimately approves the Strategic Plan, but does not necessarily formulate the Strategic Plan. Board members may participate in the planning process, but they do so as individuals, not as a formally constituted meeting of the Board. The Board then monitors the achievement of the Strategic Plan, and undertakes corrective action where required.
  
  
• The CEO - implementing and controlling role: The CEO sets the climate and tone of the strategic planning process, establishes the planning group, and ensures the Action Plans are completed on time and have appropriate control and measurement systems in place.
  

• Senior staff - implementing role: Senior staff duplicate the CEO's role within their respective departments, maintain communications between the Board/CEO and other staff, provide functional guidance to other staff, and report on progress of the Action Plans.
  
  
• Stakeholders - expert advice or representative role. Stakeholders could represent a current or potential consumer base, key suppliers, and indirect competitors.

Tool Four: Embedding Ethics into Strategic Planning
Society generally and organisations in particular are becoming more preoccupied with ethics. The creation of Codes of Conduct and Codes of Ethics predate any formal legal attempt to codify ethical behaviour. Charitable, trade and professional Not for Profit organisations date back to the 17th century, and there is evidence of Codes of Ethics from this era. It is not surprising, then, that high performing organisations are using ethics as a major strategic tool.

Far from minimising the negative effects of change, strategic planning often exacerbates the problem by ignoring the ethical implications of any proposed strategies. In the current environment, where governance and ethics are under increasingly closer scrutiny, any major organisational decision should consider the ethical dimension. The most effective way to ensure this ethical dimension is considered, is to embed a consideration of ethics into the strategic planning process from the outset.

The strategic planning process typically leads the planning group through the visioning, SWOR (Strengths Weaknesses Opportunities Risks) analysis, strategy setting and action planning stages. The more sophisticated strategic plans will then shape the Board's agenda, and lead to the development of staff performance measures.

Ethical implications of proposed actions need to be considered at the action planning stage. Identifying and analysing ethical implications of proposed action plans can add a robustness to your strategic planning that will add value to the actions and protect the organisation.

The Ethics element poses the question: are there any issues of rights, responsibilities, obligations or fairness inherent in what we plan to do in this action plan. If any issues are raised, then these are considered and rewritten into the Scope of the action plan.

Examples of the embedding of ethics into Action Plans of the Strategic Plan include:

Name of Strategy: Strategy 5-Extract maximimum value from all member services
Action Plan 5.1 - Reassessment of all current member services.
Scope: Identify current services and identify any gaps between current services and what we should be providing, recommend any reduction in services or new services.
Resources: Staff time
Start Date: February 2005
Completion: March 2005
Project Manager: GS
Success Measures: Board approves all proposed reduction of services
Ethics: Are we disadvantaging any members by reducing some service?

This simple but powerful technique ensures that the organisation considers ethical questions before embarking on specific actions.

Summary
This article explores four processes for strategy setting developed by high performance organisations, and their implications for governance within that organisation.

Creating a Vision filter ensures that the core values and core purpose of the organisation guide it through its life, and provide a built in innovation process whereby all activities are filtered through the Vision statement, and ideas and products that enable the organisation to achieve its Vision are created.

Corporates have been urged by regulators such as ASIC and by professional bodies such as the Australian Institute of Company Directors, to create Strategic Boards that are focused on the future, not short term gains. The use of a mix of representational and skills based Board members, succession planning for the Board, strategic annual reports, Board appraisal systems, CEO reviews and strategic Board agendas are all symptomatic of the Conscious Strategic Board.

Extended stakeholder involvement in the strategic planning group adds value to the process, and ensures that management (or the Board) do not get carried away with "pet" projects.

Embedding ethics into the strategic planning process ensures that ethical issues are addressed before they become problems. It also makes sense that the organisation promote the use of ethical strategic planning, both within the organisation and to stakeholders and the public.

Endnotes
1 www.epilepsy.org.au/epilepsy/epilepsyadult.nsf/Content/2002+AnnualReport