Building a Strategic Agenda
We’ve seen several effective ways to keep the board involved and informed with the strategic process.
One business divides a portion of its quarterly meetings as follows with one subject per meeting per year:
Evaluation of Market Potential
Discussion of Growth and Market Share Strategy
Consideration of Profit Margins
Attention to Cash Flow
Another business divides its four meetings this way:
Customer Satisfaction * Innovation and New Products
A third business has each functional head report on their three greatest strategic challenges at the meeting and follows up on what happened to the three challenges at the next meeting. In addition, the CEO updates the board on his “hot spots” --- greatest frustrations and most important unfinished business.
Finally, another business reports each meeting on “changes in shareholder value.” Shareholder value is calculated each quarter based on market knowledge assumptions, competitive achievement assumptions, cost assumptions, fixed and working capital assumptions, cost of capital assumptions, etc. Each quarter, the calculation changes as new information and experience are realized. The assumptionsare the focus of board discussion...and the organization’s learning that takes place quarter to quarter.
A central purpose of a good board is to review and examine strategy and to monitor the strategic learning of the organization. These examples offer some proven ways to do so.
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