Previously published in Balitmore City Biz List.
Perhaps the greatest challenge facing corporate boards and management teams is how to align around and execute on a shared vision. Jason Pappas, Managing Partner of Antson Capital Partners, has been, as he describes it, “on both sides of the fence,” reporting to boards as management, and overseeing management as a board member. “It’s given me an appreciation for the roles of both sides,” he explains. Having both perspectives, I asked Jason how do you drive boards forward, how do you establish a shared vision for the company and then ensure all work toward executing that vision?
Bipolarism. “As an operator, you're typically bristling at boards input on strategy and operation.” Then Jason adds, “on board side you feel a responsibility and an obligation particularly if [the vision] is not getting executed as the board wants.” Highly functioning boards expect the CEO to set the company’s vision. “The CEO,” from Jason’s perspective, “needs to craft the vision and bring the board along with it.” The goal is to attain “common alignment between what the board and CEO want.” But alignment takes work and requires an open discussion of how the board and the CEO see the company’s future. It’s interesting how many boards don’t see the primacy of the CEO’s role in driving vision and how many CEOs resist the critical input of boards in shaping vision.
Avoid the Hazmat Trap. “Ideally the CEO puts together the strategic vision and strategic plan.” Jason continues, “this is the CEO’s first responsibility.” But often what happens at board meetings is quite different. With the realities facing companies every day, “the problem is that executives jump into what's most urgent.” They pull their boards into the same trap, “and patterns set in at board meetings.” Agendas feel more like hazmat operations tackling the crisis of the month than driving strategy. Boards begin to realize that while it’s important to be attuned to the challenges facing the company, their meetings rarely engage on vision.
Shadowboxing. Assuming you can stay out of the hazmat trap, if you're a CEO and have challenges getting the board to see your vision what do you do? Jason responded, “start with figuring out the end game for your board.” This can include understanding their perspective on such areas as exit timing, risk tolerance, market role, growth expectations… “Your vision has to be aligned with the board’s end game.” Continuing, “if not, then you're not the right executive. It's a hard reality but it's true.” Jason ended his thought with a sobering note. “So few boards force the CEO to go through that exercise and so few CEOs put their boards through such a task.”
Holding Vision Hostage. If a board has challenges getting clarity of vision from the CEO what do you do? “The board then creates the strategic objectives for execution by the CEO.” They essentially take over what was to be the CEO’s role. “It’s essentially a referendum on whether that CEO can or will execute.” Jason didn’t want to skirt by this point too quickly. “Can and will are very different challenges.” “Can” has to do with competency and ability; “will” with dysfunction in the Board / CEO relationship.
Highly Functioning Boards. Boards and CEOs that get this pattern right work hard at it. Critical issues of the day don’t derail the discipline to continuously ensure alignment on vision and measure execution. Highly functioning boards “re-craft or fine tune [vision] during the budgeting process each year,” explains Jason. “It's the natural time for a check in, driven by financial metrics.” Boards that reach this level of function “trust the CEO as their eyes on street and expect that he should be acutely aware of why a miss occurs.” Jason calls this dynamic “sensory acuity,” the ability for the CEO to see how the plan is unfolding and for the Board to have enough confidence in their CEO to remain focused on the big picture.
