10 prerequisites for a great board strategy day
A board strategy day can be one of the most important times that a board spends together during a year. It is a time where the board comes together in a less formal and structured environment to focus on longer term direction, purpose and strategy. The board will go deeper on important issues, talk about the organisation’s biggest opportunities and challenges and align the board and executive leadership team (ELT) around the organisations’ biggest strategic priorities.
Unfortunately, many directors and executives tell us that their board strategy days were not well planned, were poorly facilitated, had too many presentations, packed in too many things and didn’t achieve the outcomes desired. What a terrible waste of such an important time.
Board strategy days should be defining moments for boards and organisations. Directors and executives should be able to look back on their strategy day and say that was the day where they and their ELT became totally aligned and committed to an ambitious and compelling future direction and strategy for their organisation.
But good board strategy days don’t just happen. Very deliberate thinking, engagement and planning is required – and that can make all the difference.
Here are the 10 prerequisites (and the 10 don’t dos) of a great board strategy day.
1. Start planning well in advance
The biggest reason board strategy days don’t turn out the way directors expect is that they were not well planned and/or the planning was left until the last minute. As the old saying goes, “if you fail to plan you plan to fail”.
Often a CEO and/or ELT might, mistakenly, think they can just use the prior year’s process and agenda as a basis for the preparation of this year’s board strategy day – and then prepare accordingly.
The chair, CEO and the board should start the discussion at least four months prior to a planned strategy day about what they would like covered and the main focus for their next strategy day. This discussion can pick up from the post-mortem held following the last strategy day where overall plans for the next strategy day were outlined and any proposed changes and improvements were agreed.
DON’T leave the planning until the last minute.
2. Understand your organisation’s strengths and weaknesses in relation to strategy in advance
It will obviously be a big advantage if your board has a good understanding of your organisation’s strengths and weaknesses in relation to strategy in advance of planning its board strategy day. In that way appropriate improvements can be made in advance.
There are three main areas that boards need to excel in relation to strategy.
- Boards need to ensure that there is a good foundation for their organisation’s strategy in the form of a compelling purpose and vision that are being lived throughout the organisation. The organisation’s values also need to be lived and drive a productive culture that enables strategy execution. If these things are missing it will be difficult to develop a robust strategy that is capable of execution.
- Robust processes in several areas need to be followed during the preparation for, development of and prior to the approval of strategy.
- Clear prioritisation, communication and monitoring of the strategy will be required if the strategy is to come to life and be executed well.
Boards and executives can complete Board Benchmarking’s Strategy Effectiveness Survey to help them get aligned about their collective strengths and weaknesses in relation to strategy. The survey comprises 30 best practice strategy survey items and can be completed in around 10 minutes. The resulting report will make clear the board and executive team’s collective strengths in relation to strategy and where improvements need to be made.
DON’T start the strategy process without understanding your organisation’s strengths and weaknesses in relation to strategy.
3. Continually engage the board in the planning process
Often a board will delegate an ad hoc committee or group to oversee the planning for the forthcoming strategy day and to ensure that the board is regularly updated with plans. The ad hoc group often includes the chair, CEO and another director.
The planning process is likely to involve several meetings over a three or four month period and it is important for the whole board, or the ad hoc committee to be engaged in the process on behalf of the board. If the ad hoc committee helps to shape the agenda for the strategy day then it should ensure the board is regularly updated on the planning around the day.
DON’T leave the board out of the planning process.
4. Agree the broad scope/agenda for the strategy day
The scope for your board strategy day is likely to be different from year to year.
Most organisations prepare 3 or 5 year strategic plans and some plans have a longer timeframe. A strategy day to help review and sign-off on the strategic plan for the next, say, 5 years will be quite different to the strategy day that is two years into the 5 year strategic plan. Similarly, a strategic planning day for a company that has just been through an IPO, for example, is likely to be almost solely focused on ensuring the prospectus forecasts are over-achieved and is not likely to have much of a longer term perspective.
At certain points of an organisation’s lifecycle it may be important to consider whether the organisation’s purpose, vision and/or values should be updated and whether the organisation’s aspirations are ambitious enough.
The board should consider the organisation’s context and some of the above matters before agreeing to the broad scope that is appropriate for the forthcoming strategy day.
DON’T just use the same agenda as the prior year for your next strategy day.
5. Board to set the broad strategic parameters desired
Too many boards wait for the organisation’s strategic plan to be prepared by the ELT without any prior clear direction being given to the executive team. The board is then presented with the plan prepared by management and is asked to approve it, which it does, with or without some amendments.
A better process involves a robust discussion between to board and the ELT about what the board expect to see in the plan. This is not only good process, but it will be of significant help to the executives who are responsible for developing the plan.
The board should be specific about their expectations in relation to important metrics such as new investments, other capital expenditure, gearing, risk, profit trajectory and cashflow. They may even want to set clear expectations in relation to non-financial measures such as employee engagement, NPS and the like.
The extra benefit of the board’s early engagement in this way is that it increases the likelihood that the whole board will ‘own’ the plan once it is signed off.
DON’T wait for the plan to be provided before advising your expectations.
6. Appoint a good facilitator and engage them in the planning process
Most boards like to have an external expert act as facilitator for their strategy day. This means that the chair or CEO can actively participate in the workshop discussions rather than focusing on facilitating the day.
If your board decides to ask an external party to facilitate your strategy day you should make sure you appoint an experienced facilitator. The facilitator will also need to be the right cultural fit for your board and have the appropriate gravitas.
Make sure you engage your appointed facilitator in the planning process. This will ensure that there will be no last minute surprises for either the board or the facilitator.
DON’T appoint the wrong facilitator and DON’T leave the facilitator out of the planning process.
7. Discuss and agree the strategy day objectives and outcomes desired
Having agreed the scope for the strategy day in step 4 above will make it easier to agree to a clear statement of objectives for the strategy day and a definitive list of the outcomes the board expects to achieve. This will help pave the way for the setting of a productive agenda for the day.
One of the biggest pitfalls to great strategy day is trying to pack too much in. Another big pitfall is to clog up the day with presentations leaving little time for robust discussions and allowing time for ideas to percolate up and be properly explored.
Agreeing to a shortlist of objectives and desired outcomes should help ensure that you design a streamline agenda, don’t pack too much into the day and that you don’t clog up the day with presentations.
DON’T try and pack too much in or clog up the strategy day with presentations.
8. Request specific board input prior to the strategy day – and share it
Most boards are provided with pre-reading prior to a strategy day which can reduce the need for lengthy presentations having to be made on the day. That is a good thing.
Directors are rarely asked to provide their input prior to the day. But stretching their mind and thinking before the strategy day helps prepare directors well and adds focus to the day.
Board Benchmarking recommends that all proposed attendees be asked to respond with a paragraph or two to a pre-strategy day questionnaire comprising a few high level questions in the lead up to the strategy day. The questions will differ depending upon the scope of the day (pre-requisite 4) and the objectives of the pay (pre-requisite 8). An example of the high level questions might be:
- Which of the organisation’s current priorities, with the right focus and resourcing, will add the most value to the organisation over the next 5 years? Please explain why.
- What are the biggest new opportunities that our organisation should exploit over the next 5 years?
- What are the biggest challenges (internal and external) that our organisation is likely to face over the next 5 years?
Attendee responses to the pre–strategy day questionnaire can be provided back to attendees verbatim and in an unattributed manner. Alternatively, they can be themed and summarised and provided to attendees in advance of the day.
Sometimes a few survey items are also included in the questionnaire to test some assumptions. This pre-work often saves significant time and helps discussions be much more focused at the strategy day. It also increases the likelihood that the desired outcomes for the strategy day will be achieved.
DON’T plan the day without considering the input you could get from directors prior.
9. Set up well with the right venue, facilities and environment
The location and how the room is set up will have a big bearing on the success of the day. It is often helpful to go away from the normally meeting venue and into a more informal and even unfamiliar environment. This helps set the scene for different and more creative thinking and discussions.
Having a bright and well ventilated space, appropriate facilities and with well planned morning, lunch and afternoon breaks can help keep everyone engaged, sharp and attentive. Planning ahead with the right room layout, the right number and sized white boards and the like will also help make the day go seamlessly.
DON’T forget to do a detailed plan in relation to the venue, facilities and other logistics.
10. Conduct a robust post-mortem
Plan to conduct a robust post-mortem from the outset. Think about all the factors that contribute to a successful strategy day, including the prerequisites set out above, and get feedback from attendees as to whether the day hit the mark or fell short in any areas.
Used well, the post-mortem will help you build a template for the planning of future strategy days. The post-mortem is often best done before attendees leave for the day – trying to get everyone’s input later is usually problematic.
DON’T forget to do a robust post-mortem after your strategy day.
- Discuss how we can help plan and/or facilitate your next strategy day.
- Arrange for us to carry out a strategy effectiveness survey and provide a resulting report to your board and executive team.
- Discuss the most appropriate questions, and any survey items, to be included in the pre-strategy day questionnaire and if you’d like us to launch the questionnaire and provide you with a report in relation thereto.
- Discuss these 10 steps with us or provide other assistance.