Sunday, February 23, 2014

The Train Wreck Waiting to Happen

“To tilt, perhaps by default, toward one of the three unhealthy board scenarios—and miss the extraordinary opportunity to leverage the ‘Governance as Leadership’ model.”

Richard P. Chait, William P. Ryan, and Barbara E. Taylor, co-authors of Governance as Leadership: Reframing the Work of Nonprofit Boards, write that there are three unhealthy governance models:

UNHEALTHY MODEL #1: GOVERNANCE BY FIAT.  In this scenario, trustees displace executives. Here the board does staff work.  Sometimes the staff is incompetent so the board jumps in. Often the board enjoys staff work.  Either way, it’s dysfunctional.

UNHEALTHY MODEL #2: GOVERNANCE BY DEFAULT. Here both the trustees and the nonprofit executives disengage.  No one has their eye on the governance ball—and the important work of governance is minimized.  Left undone, it’s a train wreck waiting to happen.

UNHEALTHY MODEL #3: LEADERSHIP AS GOVERNANCE. This might sound appropriate, but it’s cockeyed.  Here the nonprofit staff displace the trustees.  The CEO and/or senior team make decisions that should be in the governance arena.  This happens frequently with founder-led organizations and “good old boy” boards.  Often, the organization appears to be operating smoothly.  Internally, this dysfunction never ends well. Sooner or later, someone will pay.

So it is possible that your board is seeking to be God-honoring in your stewarding roles, but operating from an unhealthy model—quite likely a model that is not in sync with a Christ-centered foundation? 
While this book is not faith-based,
the big idea aligns beautifully with biblical principles.

TYPE III GOVERNANCE. This fourth scenario, the healthy one, the authors label “Type III Governance.”  Here the trustees and executives collaborate.  They both understand their appropriate roles, but unlike most boards, the staff affirms the board members when they upgrade to “generative thinking.” (My take: governance as leadership maximizes the spiritual gifts of board members per Romans 12, Ephesians 4 and 1 Corinthians 12.)

So what’s “generative thinking?”  The authors use a variety of definitions to explain this cognitive process of excelling boards: sense-making, reflective practice, framing organizations, personal knowledge, etc.  I liked “sensible foolishness” the best.

Generative thinking goes beyond “fiduciary governance” (Type I) and beyond “strategic governance” (Type II).  This “Type III” approach typically involves three steps:
   1) Noticing cues and clues: different people can take the same data and arrive at different meanings;
   2) Choosing and using frames: understanding the “fuzzy front end” of a product development process, for example; and
   3) Thinking retrospectively: the counter-intuitive high value of “dwelling on the past” to understand patterns that might impact the future.

“Generative thinking is essential to governing,” the authors point out. “As long as governing means what most people think it means—setting the goals and direction of an organization and holding management accountable for progress toward these goals—then generative thinking has to be essential to governing. 

"Generative thinking is where goal-setting and direction-setting originate. The contributions boards make to mission-setting, strategy-development, and problem solving certainly shape organizations.  But it is cues and frames, along with retrospective thinking, that enable the sense-making on which these other processes depend.”

Yikes!  Think about this final zinger from the authors: “And a closer examination of nonprofits suggests something else: Although generative work is essential to governing, boards do very little of it.”

Inspire one or more board members to read this book—and report on it at your next board meeting or retreat.

QUESTION: The authors comment, “in their ‘day jobs’ as managers, professionals, or leaders of organizations, trustees routinely rely on generative thinking, so much so they have no need to name it or analyze it. They just do it. But in the boardroom, trustees are at a double disadvantage.  Most boards do not routinely practice generative thinking.”  They add, “When it comes to generative governing, most trustees add too little, too late.” Do you agree?


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