February 1, 2012
Credit Union Management magazine’s Web-only “Good Governance” column runs the first Wednesday of the month.
The early 21st century taught us that while we can’t always predict the future, having a future-tense-focused board of directors reduces surprise, enables nimbleness in response to sudden change, and helps seize opportunities ahead of the average organization.
Perhaps a business environment shift, competitor’s move, or a drop in member demand surprised your board recently. Or, perhaps your board oversees a highly successful enterprise and you’ve come to expect success. Either situation can be perilous. The first because you were surprised and possibly could have anticipated shifts earlier by investing in more future-focused discussion. The second because success is the biggest cause of complacency, and complacency frequently leaves us reacting rather than moving proactively.
The biggest competitor for most of our businesses is our own provincial view of the enterprise—that is, believing ourselves insulated from most big trends and customer shifts because we’ve historically done OK. High performance boards fight complacency with a rigorous dose of strategic thinking—non-stop and year round, not simply at the annual planning retreat. A key way to embed strategic thinking and facilitate a future-tense view for your board throughout the year is to tap into excellent, often outside, sources of strategic thinking.
Bring in an outside trend expert to speak at your annual strategic planning meeting and stretch your thinking about the future. Bring in two or three experts during the year to speak to your board for a few minutes—you’ve got the time. The outside view can more easily challenge traditional assumptions or complacency than can the chair or CEO. Directors don’t have to be convinced of the truth or statistical probability of the view brought in, but they will most certainly have their minds stretched.
Remember, your members see their future. Make sure you explore your value proposition to members by doing a deep dive into their answers to a twice-a-year “value” survey. Satisfaction is how happy they are with service and access; “value” is what needs members want met, and how their needs are changing.
Twice-a-year, small-sample surveys are cost effective and provide a more real-time credibility to the data. Once a year, ask a series of questions about what your members would like to see from you that you don’t currently provide. In the other half-year survey, ask members to rate the importance of various elements of your products, services and policies from most valuable to least valuable.
Year-to-year comparisons to these answers (to only a few questions) help boards see member value shifts early, rather than after members have moved to a different financial institution in frustration. While a board may wish to deny other developing trends in the environment, it’s virtually impossible to ignore member feedback. Viewing value-shift data gives boards permission to think more strategically about tinkering with the enterprise.
Expect executive and key administrative staff to push new developments your way—possibly using a board-only website. Especially have the executive team report on trends they notice while attending professional meetings.
Be sure to give your CEO and executive team permission to scare you with big ideas. With permission to put these ideas on the table, the executive team can help the board think in the future tense. If your board finds your executive team uncomfortable or unwilling to bring this to the board (maybe because of their own fear or complacency), then that’s performance data for the board to consider at the next CEO evaluation.
Regularly target a specific topic/issue for investigation when members of your board attend an industry meeting or conference. Expect board members to network with those who are making innovative moves, pick their brain, and bring back perspective for their peers. For example, every credit union board I know is challenged to attract talented younger board members and invest the proper amount in keeping up with technology. Seek out others who have navigated these challenges and use their experience to inform your board’s thinking—good or bad.
Every board member should be expected to report back after attending a conference about what their specific inquiries into a topic/trend may have uncovered, as well as what new trends, best practices, and scary predictions they may have run into. If they find a “live” future model your board considers worthy, maybe invite your new contact to visit, share their experiences, and allow you to dig into more specifics.
Encourage board members to attend professional meetings outside your industry on topics pertaining to your interest in future trends (e.g. leadership succession, technology, mergers, organizational culture, innovations, social media). Much provincial thought occurs with boards because we stay focused on our industry and practices and frequently fail to see other relevant trends around us in other areas of enterprise. This is anthropological, not evil. Good ideas are portable and most everything innovative in human resources, technology or governance is portable to the credit union business.
Consider putting together a local “think tank” of professionals with whom you can meet twice a year to discuss the future. No, those casual chats with peers at the regional meetings don’t cut it—get a diverse group of thought leaders from your area and have them think out loud about the big trends and developing future they see. If we’re fighting our own provincial view, having the best thinking of valued outsiders injected into our board conversations is helpful.
Provide journal/magazine subscriptions and books for your board as a means of stretching their thinking about the future. You might even assign a strategically relevant article, book, or dataset to discuss at each board meeting. It takes only a 15-minute discussion to raise the level of board alertness. It may also spark discussion of difference of opinion about future trends that will pay dividends at your next planning retreat.
Some worthy subscriptions: FastCompany magazine; The Futurist (World Future Society); The Economist magazine. Books worthy of a board read include: Out of the Blue: Wild Cards and Other Big Future Surprises (John Petersen); Blue Ocean Strategy (W. Chan Kim); Peripheral Vision: Detecting the Weak Signals That Will Make or Break Your Company (George Day); The Extreme Future, James Canton; The Meaning of the 21st Century (James Martin); Flash Foresight (Daniel Burrus).
Les Wallace, Ph.D., is president of Signature Resources Inc., and a frequent speaker, writer and consultant on high performance governance. His workbook, 21st Century Governance, is used by several hundred boards for governance development.