Wednesday, December 10, 2014

Gen. McChrystal: “Go White-water Rafting With Your Board”

Effectiveness in the boardroom was addressed in The Wall Street Journal’s annual meeting of the CEO Council (100 CEOs of large companies). The insights were summarized in the paper’s December 9, 2014 special section, “CEO Council.”

In a sidebar Q&A with the WSJ and Retired General Stanley McChrystal, former commander of U.S. and international forces in Afghanistan, we learn this:

WSJ: “If you had the president and the chairman of the Joint Chiefs of Staff in a room, what would you advise them from a leadership standpoint on what to do now in Afghanistan?”

GEN. McCHRYSTAL: “I’d tell them to go get three cases of beer and go white-water rafting. It sounds like a joke, but when you get in the National Security Council room for the first time you think, ‘Boy, I made it. I’m in this room. This is kind of amazing.’

“And you look around and you’re not really a team. You’re polite to each other, and you talk. But think about it. We’re fighting a war. You spend months preparing a football or a baseball team for the season, but we take the most senior leaders, we put them in a room, we expect them to be a cohesive team to make tough decisions.

“And so, I would do things that started to build relationships so that you have something to fall back on when you disagree on the issues.

“I see the same thing in boardrooms for corporations. If they come in periodically, they don’t really know each other, they’re not cohesive; you’re not apt to get a very effective outcome. And I think that’s huge. 

“The strategic part is not that hard. Figuring out what to do, you can do that on a Saturday morning.”

Well said! Jeffrey A. Sonnenfeld had similar advice in his Harvard Business Review article, “What Makes Great Boards Great.” (Read my review here.)

Or…take a page from the New York Times bestseller, The Boys in the Boat: Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics. George Yeoman Pocock, the master craftsman and leading designer and builder of racing shells in the 20th Century, advised a young man from the University of Washington rowing team:

“If you don’t like some fellow in the boat, Joe, you have to learn to like him. It has to matter to you whether he wins the race, not just whether you do.”

Depending on your organization’s doctrine and lifestyle statements, you could skip the General’s beverage recommendations, but the white-water rafting idea has merit. And for Christ-centered boards, I would build in a spiritual discernment component and ways to leverage the spiritual gifts of your board members. That will dramatically enhance relationships and boardroom dynamics.

Do you want Kingdom outcomes? Build cohesiveness. 

QUESTIONS: Are the relationships between your board members strong enough so when you disagree on the issues…you can do it in a Christ-honoring way? If not, is it time to get in the boat (or raft) together?

Tuesday, December 2, 2014

The Only Bad Question Is the One You Had, But Didn’t Ask

Here’s savvy advice for new board members (actually all board members): “Do not rely on someone else to do your thinking.”

That’s from the very helpful book by John Pellowe, CEO of the Canadian Council of Christian Charities. Serving as a Board Member: Practical Guidance for Directors of Christian Ministries, based on a seminar and a DVD of the same title, the book is one of the best Christ-centered governance books available.

As you think about your next board retreat—and a book for every board member to read, consider this one.

In his foreword to Serving as a Board Member, Jim Brown, author of The Imperfect Board Member, notes “now it seems like ‘governance consultant’ is a pre-painted shingle that goes with every early-retirement, golden parachute check that gets handed out. The web is fraught with blogs and e-books on the topics of boards.”

So…pick your books carefully. Why this one? Right from the get-go in the first chapter, “Readiness to Serve,” Pellowe speaks to the hearts of future board members about passion and calling:
   • “If the ministry’s mission is not closely tied to your interests, your board service will be a draining experience…”
   • “The Holy Spirit can nudge us towards those good works that God has prepared for us to do (Eph. 2:10); this nudging is usually described as a call.”
   • “God’s individual call is normally in line with the gifts that you already have.”

And he’s just warming up on pages 4 and 5! He adds on page 7, “You really should be able to think theologically about the mission, governance, and leadership of the ministry you are serving. If you are new to the Christian faith, you may not yet be well enough equipped for board service in a Christian ministry.”

The book’s format is unique with the voices of other experts blended into sidebars. Pellowe, CEO of CCCC since 2003, sprinkles in his personal insights and stories (like his home church board meetings!) every few pages—fascinating stuff! Example: His story on page 126 on the “Bad” 3 Rs: boards that waste enormous amounts of time on “Reviewing, Rehashing and Redoing.”

This paragraph grabbed me—and is illustrative of Pellowe’s insights in every chapter:

“You must be diligent as a director. Make sure that you ask any questions that are on your mind. As the saying goes, the only bad question is the one you had, but didn’t ask. You may think that since you have a banker on your board, you do not need to ask any financial questions because someone else is looking after that. It is your duty to ask these questions anyway. Do not rely on someone else to do your thinking.”

QUESTIONS: When is the last time every board member read a helpful governance book? What’s the next book your board should read?

Tuesday, November 18, 2014

“We Don’t Eliminate—We Help Our Competition”

“We do not try to eliminate our competition. In contrast we try to help other Christ-centered organizations.”

That’s just one of exactly 1,300 comments received in the recent ECFA governance survey in response to this question: “If you agree that there are important distinctives of Christ-centered governance, please list one or two.”

CEOs, board chairs and board members shared their insights:

• “We interpret current information with the question, ‘What is God doing?’"
• “Decisions and discussions need to be within the context of seeking God's agenda as opposed to merely bottom line or goal-oriented thinking, decisions.”
• “Prayer—constant and continuing, both in and outside board meetings. Our board prays together for a half-hour via telephone each Tuesday morning.”

The perspectives were diverse—and prayer and spiritual discernment was a common theme:

• “Christ-centered boards are required to take certain steps of faith, whereas secular boards tend to be driving solely by numbers.”
• "Prayer: our board bathes the meetings, the staff, our plans, and decisions in prayer.  I've never served on a secular board that used prayer in this manner.”
• "We exist for primarily spiritual values.”
• “Living out those values is critical to being a board member."
• “Biblical conflict resolution (commitment to Matthew 18)”
• “The board members spend time in prayer on difficult issues.”
• “The board references scripture to address many issues.”
•  “Devoting significant time—maybe 25%—to hearing a [devotional challenge], personal checking in and prayer, before diving into agenda."
"Scheduled interruptions for prayer.”

Several board members pushed back a bit:

• “I think if the individual members are Christ-centered there isn't much difference.” 
• “While I disagree with that statement, my experience tells me that a Christ-centered board obviously has Christ at the center of the mission and the standard for conduct is based on scripture truths, but a secular board also has the adherence to fiduciaries of honesty, efficiency and performance that mandate effectiveness.”

To get the flavor of all 35 comments (out of 1,300) featured in the 62-page executive summary of the survey (pages 6 to 8), download the ECFA 3rd Annual Nonprofit Governance Survey (click here).  More insights:  

• “There is a missiological context for a Christian organization. How the Trinity achieves its goals and mission directly relates to how we do the same. How God does His mission matters in how we do ours.”
• "Always mindful of what Christ wants through prayer and fasting.”
• “We measure success by biblical standards."
• "We don't have to be sensitive to political correctness. We are obligated to be Biblically-sensitive and honoring."

And my favorite:
“We use the Bible
as a plumb line, 
and value gracious ‘other-centered’ 
relationships at meetings”

QUESTION: At your next board meeting, ask your board members to first write down their response to this question: “Are there important distinctives between how a ‘secular’ board governs and how a ‘Christ-centered’ board governs? Then, ask board members to share what they wrote with the full board.

Tuesday, November 11, 2014

Board Chairs Sound Off on CEO Issues

“What is the most challenging issue you face when working with your CEO?” 

According to board chairs—they don’t meet often enough with their organization’s CEO. That and other responses from board chairs are noted in the ECFA 3rd Annual Nonprofit Governance Survey. It’s available as a download to ECFA-accredited organizations and subscribers. (Click here.)  

The responses were categorized into five major areas:
• 25.4%: Insufficient Time for Board Chair/CEO Mtgs. (and Distance)
• 20.8%: CEO Leadership Issues, Management Styles, & Organizational Health
• 17.7%: Vision/Strategy, Priorities & Measurement
• 16.2%: Board Functions & Board Roles
• 10.0%: Communication & Timely Information/Reports

Another 10% of the board chairs reported that they had no challenging CEO issues at this time. Here’s a sample from pages 24-29 in the survey report:

ISSUE: Insufficient Time for Board Chair/CEO Meetings (and Distance)

  • “Distance, time and differing personality types. Only our love in Christ makes it possible.”
  • "Taking the time to meet with the CEO one-on-one on a regular basis.”
  • “Keeping current on status of ministry when we meet only a few times per year.”
  • “Finding time to support him.”
  • “We really work well together.  Maybe the biggest issue is me making more time to spend with the CEO.”

ISSUE: CEO Leadership Issues, Management Styles, & Organizational Health

  • “The CEO likes to micro-manage issues and finds it difficult to accept that other board members are competent to handle issues without her constant input.”
  • “The CEO is a visionary so sometimes it is difficult to make concrete plans.”
  • “Encouraging more aggressiveness.”
  • “Because of personality differences, we sometimes view things differently. However, it is never a show stopper.”
  • “Personality style: I am direct; he prefers indirect, especially with criticism.”
  • “CEO, to lead well, must be positive. The challenge is that ‘being positive’ can mask reality when reality must be faced (or truly known). We tend toward ‘overly positive’ and need to push hard to get to understanding reality sometimes.”

Note this insight from Boards That Lead:
“Most chief executives are constitutionally optimistic, and since by definition their role is to surmount challenges, the tenor they bring into the boardroom is likely to be relentlessly upbeat. Taking executive overassurance into account will aid directors in detecting nascent troubles ahead, but it is only one piece of a very complicated puzzle.”
(See Chapter 8, “Spotting, Catching, or Exiting a Falling CEO” in Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, by Ram Charan, Dennis Carey and Michael Useem.)

ISSUE: Vision/Strategy, Priorities and Measurements

  • “Keeping the CEO focused on priority issues.”
  • “Trying to determine pitfalls.  Focus is usually on what is more important at the time.”
  • “Getting her to focus on CEO tasks to keep her from dipping into the daily operations.”
  • “I believe all goals should be measurable and I have some trouble with getting that accomplished. However we have just started the idea of every program should have measurable goals, or the program will not be approved until those goals have been clearly defined with strategies for evaluating their success.”
  • “Focus on what's important vs. what's urgent; delegating, communication and follow through.”
  • “Keeping him from taking on too many new ministries/projects before completing the current ones.”

ISSUE: Board Functions and Board Roles

  • “I am very blessed to have a great personal relationship with the CEO.  It is never ‘enjoyable’ to deliver tough feedback, but know it must be done.  Fortunately, he is very receptive and allows me the freedom to speak what we, as a board, see as important feedback.”
  • “Performance evaluation.”
  • “Constructive criticism and correction.”
  • “Encouraging underperforming board members to improve.”

ISSUE: Communication and Timely Information/Reports

  • “Getting written reports in a timely manner.”
  • “Communication: to understand the issues at the same level as the CEO so I can make informed and intelligent recommendations.”
  • “The CEO does not want to communicate with board members because so many disagree with him leaving me in between in major disagreements.”

QUESTION: What is the most challenging issue you face when working with your CEO--and have you talked with him or her about this issue?

Friday, October 31, 2014

Top 10 Governance Survey Highlights

There are a few surprises among the Top 10 Highlights from the hot-off-the-press executive summary of the ECFA 3rd Annual Nonprofit Governance Survey. It’s available as a download to ECFA-accredited organizations and subscribers. (Click here.)  

Highlights include board giving, CEO succession, the gap between knowing and doing, operating reserves and measurable goals. Here are the 10:

1. Boards affirm distinctiveness of Christ-centered governance. There has been a dramatic and encouraging change in board member thinking, over 3 years, about the distinctives between “secular” board governance and “Christ-centered” board governance.

2. Strengths and spiritual gifts: more knowing than doing. While more than 95% of CEOs, board chairs and board members say it is important to leverage the God-given strengths of every board member, only about 17-21% of boards have completed a strengths assessment.  Somewhat more encouraging, 33-44% of board members say they know the spiritual gifts of their board colleagues.

3. Healthy governance: not there yet.  On the governance continuum of “Micromanagement (1) to Healthy (10),” about 35-40% of CEOs and board members rated their boards at 7 or less—but about 90% would like to be at “Healthy Governance” (8, 9 or 10) within 12-18 months.

4. In rating the three aspects of governance, fiduciary governance rated high, but generative governance rated the lowest. Board members agree that they are very effective in their “Fiduciary Governance” roles, but much less effective in their “Generative Governance” roles—the re-imagining of the organization, in light of trends and opportunities.

5. CEOs and board members agree that all board members should be givers and encourage others to give, but… while a healthy 87% to 91% agree that board members should be annual givers—less than 42% of their organizations provide training to equip and inspire board members on the “how to” of inviting others to give.

6. About one-third have operating reserves of 6 months or more, while up to 84% want at least 3 months of reserves within the next 24 months.  Based on their last fiscal year, 57% or more of survey participants said they had three or more months in operating reserves—and 30% to 33% reported reserves of six months or more.

7. Over one-third of board members recognize they dip into tactical versus strategic issues always or frequently. Yet overall, CEOs and board members said several unhealthy boardroom habits are usually avoided in their board meetings and/or addressed by the board chair.

8. Majority of board members not prepared for CEO succession.  In response to key questions “every board member must ask,” only 30-35% of board chairs and board members (the lowest response of the 13 questions) said they were prepared to name their next CEO.

9. Fundraising continues to be top area needing improvement. For the third year, CEOs, board chairs and board members were asked to select the Top 5 areas needing the greatest improvement in their ministries. Four areas have remained the same for all three years of the survey.

10. Almost 60% of CEOs and senior staff have annual measurable goals. Over 85% of CEOs say that donors are interested in mission impact—yet more than one-third of CEOs do not have board-approved CEO annual measurable goals. But good news: 84% of CEOs say their boards understand their role and God’s role in goal-setting and kingdom outcomes.

QUESTION: Download the executive summary and photocopy the 20 “Board Member Self-Assessment” questions (page 60) for your next board meeting. Then ask, “What are the Top 3 areas that need improvement in our board work?”

Note: A brief article on the Top 10 highlights is featured on page one of ECFA’s Focus on Nonprofit Accountability (Third Quarter 2014). View it here.

Friday, October 24, 2014

ECFA Survey: “Healthy Governance: Not There Yet”

On the 10-point scale between “Micromanagement (1) to Healthy Governance (10),” almost 40% of CEOs, in the latest ECFA survey, rated their boards at 7 or less. The good news: 87% of CEOs hope to move their boards to an 8, 9, or 10 within the next 12-18 months. Board chairs and board members were slightly more optimistic.

The findings are from “Highlight #3” in the hot-off-the-press executive summary of the ECFA 3rd Annual Nonprofit Governance Survey. It’s available as a download to ECFA-accredited organizations and subscribers. (Click here.)  This 62-page treasure chest of insights and trends includes 10 highlights, 130 open-ended comments from CEOs, board chairs and board members, and 9 strategic observations.

The report also includes color commentary, suggested resources, and next steps for boards. For example, the report notes six insights on “How Do We Stop from Micromanaging?” from chapter 13 in Ram Charan’s book, Owning Up: The 14 Questions Every Board Member Needs to Ask.

“Directors must take responsibility for managing the board’s time. As much as management complains about the problem of micromanaging, they may be contributing to it by providing too many slides and unnecessary details.”

• “Asking questions of an operating nature is not in itself micromanaging, as long as the questions lead to insights about issues like strategy, performance, major investment decisions, key personnel, the choice of goals, or risk assessment.”

• “The board is there to make sure management has a plan and that it is executing that plan.”

• “CEOs don’t realize that they bring some of the micromanaging on themselves with their presentations to the board.”

• “Addressing strategic topics first puts directors at the right altitude for the entire meeting.”

• “Another best practice is for the CEO and other presenters to give the bad news on the first page in unmistakable terms then describe the whys and the context.”

In my experience, micromanagers on ministry boards rarely think about the spiritual implications of operating in the weeds. Here’s an eye-opener from Bruce Bugbee, author of What You Do Best in the Body of Christ: Discover Your Spiritual Gifts, Personal Style and God-Given Passion. A friend asked him this spiritually probing question:
“Why are you doing what others can do,
when you are leaving undone what only you can do?”

QUESTIONS: What are the agenda items and tasks that only the board can do? What are board members doing that others (staff and volunteers) can do? (Note: Nail this one—and you’ll likely see calling enhanced and micromanagement decline.) 

Monday, October 20, 2014

The Twin Tensions of Honesty and Inspiration

Following Team USA’s loss to the European team in golf’s biennial Ryder Cup competition last month, U.S. Captain Tom Watson took the blame. According to a statement issued through the PGA of America and carried in the Los Angeles Times, Watson confessed:

“I regret that my words may have made the players feel that I didn’t appreciate their commitment and dedication to winning the Ryder Cup." 
"My intentions throughout my term as captain
were both to inspire and to be honest.”

Even board members who are not golfers will understand that twin tension: inspire and be honest! Just look at the short list of board agendas: the CEO’s annual performance review, quarterly financial reports, strategic plans, leading indicators—all opportunities for accountability, affirmation…or awkward silence.

Watson’s statement reminded me of the hot-off-the-press executive summary of the ECFA 3rd Annual Nonprofit Governance Survey. It’s available as a download to ECFA-accredited organizations and subscribers. (Click here.)  This 62-page treasure chest of insights, trends, and strategic observations includes 70 open-ended responses to this question:
“As the board chair, what is the most challenging issue
you face when working with your CEO?” 

Note these two board chair responses:

   • “Personality style: I am direct; he prefers indirect, especially with criticism.”
   • “I am very blessed to have a great personal relationship with the CEO. It is never ‘enjoyable’ to deliver tough feedback, but I know it must be done. Fortunately, he is very receptive and allows me the freedom to speak what we, as a board, see as important feedback.”

Balancing the twin tensions of Inspiration and Honesty prompted this homemade quadrant for your next board meeting:

   • The best board chairs are Symphony Conductors. Inspirational—absolutely, but highly demanding to bring out the best in the orchestra (boards and CEOs); always honest (“speaking the truth in love”), but with the right pitch—if you’ll excuse the pun. 
   • TV Hucksters make lousy board chairs. Their “inspirational” flim flam is inauthentic and dishonest. CEOs can spot huckster rhetoric a mile away.
   • No better—an Incompetent Counselor. Honesty is expected of therapists, but so is empathy. No inspiration nor motivation—no change. Board chairs take note! It’s a delicate dance to confront the brutal facts, yet still be inspirational.
   • Finally, there is nothing worse than a board chair who leads as an Inept Steward. That’s “steward” in name only because the ineptness cancels out any semblance of stewardship. Board members who are led by inept board chairs must address the elephant in the room—today.

For the Christ-follower, being inspirational and honest should come with the territory. It’s often difficult, but 1 Thessalonians 5:24 (NIV) reminds us that “the one who calls you is faithful and he will do it.”

QUESTION: As the board chair, or a board member, what is the most difficult issue you face when working with your CEO? (See what 70 others said in the ECFA 3rd Annual Nonprofit Governance Survey.)