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A New Approach to Strategic Board Reviews

A New Approach to Strategic Board Reviews

Introduction

I developed a “New Age Board Review” process last year which I have discussed with around 40 chairs and directors over the past six months.

The feedback I received is that most board review processes are more focused on risk and compliance issues.

From these discussions I have learnt that the strategy firms do not focus on the strategic board review market for fear of damaging relationships with their major clients – CEO’s and C-suite executives.

Our firm aims to plug that gap.

We can service this market and deliver a high quality strategic service to assist boards with setting up the best possible governance and leadership processes relevant to their markets.

This requires blending talented and experienced consultants who are leaders in their fields into consulting teams qualified to undertake assignments at this level.

I have developed strong collaboration with a range of market leading consultants to work with in undertaking these consulting assignments.

These consultants include:

  • Stephen Langton for leadership
  • Denis Kilroy for strategic financial analysis
  • Gerard Neiditsch for technology platform assessments
  • Dr Bruce McCabe for emerging and disruptive business technologies
  • Dr Ken Dovey for innovation leadership, culture and capability.

We also received feedback that we should chunk this service into modules, since it is unlikely that any board would need advice on all the topics incorporated in the original board review process.

Board focus and composition

The six modules we have developed based on your feedback are designed to help boards’ answer the following kinds of questions:

  • Short or long-term focus?
  • Do we have the right stakeholder focus?
  • Is our brand under attack?
  • Do we spend our time in the most effective way – e.g. strategy?
  • Are we serving our broader communities effectively?
  • Is our board composition appropriate?

Technology and environmental scan

  • Are we sure we have up-to-date information on all key technology and other relevant trends?
  • Have we identified all key opportunities and threats?
  • Is a disruptor likely to seriously damage our business?
  • Are there opportunities we have not focussed on sufficiently?
  • Does our technology platform allow agility in responding to changing customer needs?
  • Is our technology spend cost effective?

Leadership & Culture

  • Are we confident that our executive leadership team is on top of all key strategic issues and opportunities?
  • Is our leadership executing the strategy effectively?
  • How do we know?
  • Are our succession planning processes strong enough?
  • Is our culture strong enough?
  • Are our remuneration and measurement systems aligned with our cultural aspirations?
  • Are our leaders effective role models?

Innovation

  • Is our innovation process strong enough?
  • Is our innovation fast enough?
  • What does our future shareholder value tell us about the relative strength of our innovation process?
  • What does our relative cost performance say about the strength of our innovation processes?
  • How do we compare on new product and service launches? o What is the market feed-back about our brand?

Strategic Performance & Strategic Risk

  • Are our shareholders satisfied with the financial performance of the business? o Is our right to operate under attack in any way?
  • Are customers satisfied with our products and services?
  • Do we see major changes in customer buying preferences in the market? o Do we have mitigation strategies in place to deal with key identified risks?
  • How do we know our strategy is appropriate for the current market conditions? o Is our business model strong enough?
  • Is our technology platform strong enough?
  • Is our brand capable of being expanded into other product/market segments?
  • Are our costs under control?

Strategic Reporting

  • A very important ingredient for corporate success is the ability of boards to compose and ask the right questions, and elicit answers, to enable them to discharge their responsibilities effectively
  • This requires a strategic reporting system that allows the board to ask questions like:
  • Are there significant changes in our customer buying patterns?
  • Are new channels emerging that could threaten our business?
  • Are new market entrants emerging?
  • Is there a new model being developed that radically changes the cost base of our business?
  • Are we taking the necessary steps to ensure that our sustainability becomes stronger over time – and most importantly - does not erode?
  • An example of strategic reporting is that McKinsey have shown that when industry revenues from digital exceed 40%, the risks of inaction become very high – see link for story - http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/when-to-shift-your-digital-strategy-into-a-higher-gear?

Summary

The work plan for the strategic board review would be developed for each client according to their specific needs with fees negotiated and agreed accordingly.

I would co-ordinate the consulting team built from the range of experts I work with as outlined above.

We look forward to being of service.

Author(s)

John Colvin

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