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Newsletter - Oct. 2006
The Transformational Potential of Policy
Governance®
Lately I have been emphasizing the theme
that Policy Governance is transformational. At least it
has the potential, as boards are discovering, to be so
when done with consistent rigor and complemented with a
responsive and competent CEO. It creates the structure &
board governance process to enable the outstanding level
V leader (cf Jim Collins, Good to Great) to
create an outstanding organization focused on results.
But even a reasonably competent CEO can, with the
initiative and a degree of creativity expected of CEOs,
usually grow to the occasion. Why? It releases the CEO
and organization to achieve results-focused ends (while
setting clear behavioral value-based constraints on the
organization). It inverts the usual organizational focus
on means (what Jim Collins terms “inputs”) to ends.
Focusing tenaciously & passionately on
ends that reach deeply and strategically into
beneficiary or community need and getting the proof of
that through good monitoring reports turns out to have
a transformational effect. The Policy Governance board
also insists on the evidence that those ends are being
accomplished. The ends are not just a vision statement
that is on the wall. This cycle of
ends->measurement->eventual proof-of-effect creates an
organizational culture that is increasingly savvy about
ends accomplishment & their measurement. (This sounds
like a learning organization, doesn't it?) Furthermore,
it creates a ever learning and future-focused board that
is perpetually attempting to peer further and
further into the future, thinking always more
strategically. (Sounds like a learning board, doesn't
it?) This compels management to do the same; the two,
board and management, grow into a powerful synergy.
As the board becomes increasing
comfortable with, and knowledgeable about, its strategic
viewpoint and becomes ever more sophisticated concerning
how it understands its ends and their realization in the
target population, the board begins to think about new
ends that reach beyond the initial ends.
For example, suppose a college board’s
original ends are focused on the educational, character,
and citizenship outcomes of its students. As it begins
to see (and measure) an impact in the lives of its
students and graduates, it looks for and perceives an
even larger effect it might have; it begins to think in
broader community terms. Perhaps the college can have an
impact on the educational level of the community,
especially if it partnered with fellow educational
institutions in the community. This, in turn, would have
a beneficial impact on the quality of life and economics
of the community. It edits its ends policies to address
this expanded vision.
Another example would be the board of an
organization initially providing compassionate services
to families in deep poverty in third world countries,
perhaps a sponsor-sponsored model. As the board comes to
understand the world it is impacting (the lives of the
sponsored families) it sees the more strategic end of
enabling them to grow in their economic earning
potential and their independence, perhaps micro-loans or
gifts that enable enterprise and sustaining income. As
it sees the larger effect of that through good ends
monitoring reports, it lifts its eyes to the whole
community’s wellbeing and steps up its ends that address
the communities in which it finds itself; later an
entire tribal or people group. Get the picture? Well
informed ends that transform and whose effects are
demonstrably measured lead inexorably to an ever larger
vision.
These kinds of potential scenarios can be
applied across the board to charitable and faith-based
organizations, churches, missions, schools, youth work,
etc. Wherever nonprofits go, your imagination goes. Ah
but, in my practice, the principle can also be seen very
early now with the privately held for-profit
corporations with which I work!
That is why Policy Governance is
transformational. Some people call this Policy
Governance effect, not just transformational but, a
revolutionary potential. Policy Governance boards become
imaginative! And they learn that, given wise ends and
the traction of measuring progress, the organization
under good leadership can make real what was once
imagination. Most traditional boards, however, are
governing based on reviewing last month’s reports. Their
agenda is a list of receiving reports and “issues,” and
their mental model of governance is “asking good
questions.” The questions asked, of course, are about
the things in front of the board - the reports and
issues. Asking good questions, in that model, will never
take a board imaginatively into the future as I’ve
described. It will not experience the excitement and
gratification of being transformational, much less
revolutionary. |
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