My “mobile” car phone was the size and weight of a very large brick. And it was truly a car phone because the base was mounted to (and used power from) the car. I didn’t need to go to the gym to lift weights because the handset provided a good deal of dead weight training. Those of us testing the Vodaphone used to joke that if it quit working, it would make a great boat anchor. I’m surprised I never got whiplash from lifting the handset to my ear while driving. Okay, so yeah. If using your cellphone with your bluetooth is a driving hazard, just imagine how dangerous I was on Lakeshore Drive!

Now here’s what I carry around today: a phone that is not tethered to anything (except maybe my hand or earbuds). It’s about the weight of a pair of scissors and about the size of three packs of dental floss laid side-by-side. And it doesn’t merely connect me by voice-to-voice over cellular. It’s my personal data assistant, office manager, and personal entertainment center. It also responds to my whims. (Siri is my new love, but don’t tell my husband!)

So why do boards of all types and sizes still run with 30-year-old technology? Yes, the basics are still sound. Compare today’s smart phones with my car phone 30 years ago. Why would you choose to carry around a big, old brick that doesn’t do much versus a small, sleek device that caters to your every whim? Is your board functioning with a mindset from 30 years ago? Before you say no, consider this.  Nonprofit organizations proliferated in the 1980′s (Board Source, 2003). Much nonprofit regulation did too. Not surprising that governance structure, culture, and practices emanated from that period. Businessmen populated boards and they brought their management expertise to the boardroom. Unfortunately, management expertise does not necessarily translate to governing expertise. In the management mindset, governing is typically viewed as “management one level up” and tethers a board to the past instead of creating the future.

Why does it seem like transformational governance is still the privilege of the chosen few? Board members and executives, please throw the 30-year-old+ mindset out the window. C’mon now. Don’t say that you don’t know what I’m talking about. At association and nonprofit organization conferences, I still hear the same complaints that I was hearing 20 years ago. Here’s the chronic complaint: why does my board micromanage (i.e., get caught up in administrivia)? Because they don’t have anything more important to do. Because they haven’t found a way to delegate effectively and know their wishes for the organization will be fulfilled. Or, the board recently had a crisis that involved a major financial risk (e.g., embezzlement, lawsuit, the ED who was the “rainmaker” just left). The list goes on and on. People tend to revert to old, dysfunctional behaviors when they feel unsure or threatened or are just plain bored. Governing from this mindset is like picking up the Vodaphone and expecting to have Siri grant your next wish. Remember the implication when you expect different results from doing the same thing over and over again.

The magic of smart phone technology did not happen because Steve Jobs said, “Let’s redesign the Vodaphone!” The magic happened because Steve Jobs had a vision of something sleek, powerful, and ready to go to work for you out of the box. Why would you buy 30-year-old technology when you could have an iPhone?

Unleash the power of your board and explore how you can best use the collective wisdom of all those smart minds in the room. Don’t make them sit through one more staff report or approve one more budget until you think about why you’re asking them to do it. What is the value added? What magic could they envison if given the time?

Along the way, she tried to enlist others in the barnyard for help to plant the seeds, take the wheat to the mill, and bake the bread. All who were asked said, “Not I!”

When the bread was done, she asked who would help her eat it. Of course, everyone wanted a piece.

The course of Policy Governance can look much the same. In the beginning, planting the seeds and developing the framework for better governing practices is a lot of work. But in the end, the board has a practical and robust system for managing its work. In the end, everyone wants on board!

A client said, “We had trouble filling board seats and getting board members excited and engaged before we started governing by policy. Now that we’ve had a few years of success, everyone wants to be a part of it.”

One person had the vision of how governing by policy could improve the effectiveness and efficiency of board’s work and create a transformed, successful organization. Once the seeds were planted and the bread was baked, the sweet smell of success attracted everyone.

Does Policy Governance take a lot of work? Yes.

Will Policy Governance make a difference in your success? Yes.

Will everyone take part in the creation of a transformed organization? No. (Just ask The Little Red Hen).

Is having a board organization that everyone wants to be part of worth it?

Well, you need to answer that question for yourself.

For those who are new to the concept, Tom Friedman offered an excellent quote in his New York Times Op-Ed column of January 5, 2010. The quote is “from Dov Seidman, the C.E.O. of LRN, which helps companies build ethical cultures, and the author of the book ‘How.’ ‘You have to enlist and inspire people in a set of values. People need to be governed both from the outside, through compliance with rules, and from the inside, inspired by shared values.’”

Sound like good governance to you?

So, what’s stopping you from practicing it? The problem I’ve encountered is that too often, bright and capable peoples’ skills and talents are wasted in board meetings discussing whether or not to purchase new office furniture or how many pieces of collateral were distributed at the last fundraiser. Discussions like these are about looking backward rather than creating a vision for the future. Discussions like these enervate, rather than inspire.

Are you tired of operating in a model of scarcity (not enough time, not enough money, not enough people…) and ready to move toward a model of abundance (stop focusing on the past, getting rid of the time-wasters and envisioning what you can achieve)?

Policy Governance® offers a system for governing boards to ensure that they are complying with outside rules and allows them to spend more time discussing what inspires the organization. Policy Governance gets the board beyond what is to what can be.

Democracy is messy. Governing boards represent democracy in action and the complexity of the process of representing diverse owners. That’s why governing boards need every available tool in their toolbox. Policy Governance® represents the most comprehensive body of thought on board leadership and governing.

Caroline Oliver cites Couto and Guthrie:

“Mediating structures are a prerequisite to democracy. They preserve the liberty of citizens to act on public matters apart from government. They permit their members representation and participation in the sociopolitical arrangements of the neighbourhood, community, nation, or state.”

Oliver goes on to say this: “If owners don’t know what boards are talking about or why, if they don’t understand who does what and why, how can they possibly participate? Boards are key agencies in society, bringing democracy to the highest level of every organisation. It is their job to define and demand organisational success and standards of ethics, the law and prudence on our behalf. This is true board leadership and we need it more than ever.”

On a deeper, personal level, I’m convinced that if boards set a better example for governing then there is hope for democracy worldwide. That’s my mission. My theory is that getting the message to governing boards has the potential to create an accelerated learning track in the United States to better governance and improved democratic process.

Boards empower the owners to govern without actually needing everyone to sit at the board table. To do the job right, Boards need the right tools. Policy Governance can boost organizational success and the quality and level of board decisions. Policy Governance will not be the right choice for every board, but it should be a choice.

Policy Governance (PG) is a registered trademark of Dr. John Carver to preserve the integrity of the governance system, not for financial gain. Policy Governance is free to anyone.

Typically, agencies that serve individuals who are poor and marginalized because these folks are incapable of maintaining a permanent situation due to psychological difficulties; or it may be because they can’t qualify for other public or private agency services. Now, a service those folks came to depend on is closed. Disruption of services for marginalized citizens can be worse than not doing anything at all. All that leadership could say was that it happened before and will likely happen again. A sorry state of affairs, I would say.

The shameful part of this entire situation is that it could have been avoided. Apparently, a disagreement between the staff and board caused the disruption in funding and services. The board accused the staff of not providing information needed. The staff wanted to be on the board. Volunteer or not, as a governance professional, I would recommend that the board and staff become crystal clear about their roles and responsibilities. Marginalized people lost vital services that allowed them some degree of self-sufficiency because of governance policy, not public policy issues. An opportunity to re-start this organization exists in the form of an interim board.

Re-starting this service, the board clearly needs to have a commitment to the specific mission to serve the poor and marginalized. The board’s responsibility is to ensure organizational performance. When the former board didn’t deal with problems and differences regarding decision-making, the clients suffered. The new board needs to get its values straight. Decisions of all sorts, as clearly argued by Drucker (The Effective Executive, 1967, pp. 113-141), rest on principles and generic understandings. Without setting down in writing these principles of how decisions will be made, this board will continue to have difficulties. The former board got so caught up in an event-driven incident that they forgot to focus directly on perspectives and values. Therefore, organizational behavior was dysfunctional and the fundamental services provided by the organization were lost to those who need them.

For nonprofits, relating the process and practice of governing to a familiar or commonly shared experience helps. In my post “On board service“, I use ships. In April, I wrote an article for the Charity Channel Nonprofit Boards and Governance Review. In this one, I use the train analogy. It seems I’m attracted to transportation analogies when describing governance!

From the review in Charity Channel:

Executive Directors who dump a pile of financials in front of board members, expecting them to have the background and expertise necessary to make heads of tails of them, are not meeting their obligations to the board, according to the latest NBGR article by Sherry Jennings. Taking the point of view of a new board member, she writes, “Most of the financial information was incomprehensible to Martin. What was nagging at Martin was that he didn’t feel like he had a complete ‘picture’ of what was going on. The information he had plodded through last night seemed like a box of spare parts.”‘
In If I’m Not Running the Train, How Do I Know We’re On Track? the author uses a down-to-earth story-telling method to drive the point home and offer up the solution.

Caroline Oliver (brilliant author and consultant on governance) likens practicing good governance to riding a bicycle. You need to take the appropriate steps and practice to do it right. She said that the traditional approach to governance is okay but it’s a bit like pushing the bicycle along rather than riding it. Riding a bicycle is difficult at first. One needs to learn a new way of balancing and may fall a few times. But once one is confident and dancing on the pedals, it feels effortless and like flying (another transportation analogy!)

From Caroline’s reflections:
“Most of us want practical solutions and would prefer to skip the theory bit. However, the boards that tend to excel in the way that they practice governance are the boards that have an idea of what they are doing and why – in other words – the ones that have a good theory!”

I would add a good process and good balance.

See Caroline’s article on Creating a Board Dashboard, also at the Charity Channel and her new book Getting Started with Policy Governance

One of the best practices of high performance organizations is for leadership to nurture a culture that allows for people to question openly and have honest dialogue. A leader’s beliefs and values create the direction and the boundaries that people need to perform well. In “Good to Great” (2001) Jim Collins asserts, “good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility within the framework of that system.” This is Policy Governance in a nutshell.

When organizational leaders have an authoritarian culture where people are afraid to question decisions, diverse viewpoints cannot be heard. When people can raise objections when they think they need to, it paves the way to better decision-making. If an organization follows Policy Governance principles, it will find that Policy Governance creates a “safe” way to have meaningful dialogue around an issue (instead of a personality), and largely, reduces organizational barriers to having the dialogue in the first place.

Warren Bennis is a professor at USC’s Marshall School of Business. Bennis cited by Koestenbaum, Keys, and Weirich says, “Exemplary leaders create a climate of candor throughout their organizations. They remove the organizational barriers — and the fear — that cause people to keep bad news from the boss. They understand that those closest to customers usually have the solutions but can do little unless a climate of candor allows problems to be discussed.”

Recently on the American Society of Association Executive’s (ASAE) Executive Section listserv, there have been many questions about how to get the board out of the minutiae in order to find time to work on strategic direction or Ends policy. The board’s focus on the day-to-day is not their fault (entirely.) Board members want to to a good job. But most have learned the traditional approach of board service — showing up at meetings, approving staff work and debating whether or not the office can afford a new copier.

When your board is busy with staff reports, committee reports and working on day-to-day operations, they don’t have the time to focus on strategy or governing. Board members come to your meetings with dozens of other competing priorities and thinking about their own business or family decisions. Once they get to your meeting, the agenda is full of operational (staff) reports or decisions. Is it any wonder board members default into operational mode?

Hildy Gottlieb at Help4Nonprofits.com says it’s like running a ship. You, dear Association Executive, are the captain. You manage the crew, read the charts, navigate and ensure the safety of crew, ship and cargo. You make sure the cargo is delivered. The board’s role is representing the owners of the ship. The board decides what kind of ship, what cargo it will haul, where that cargo will go, to what customers and at what cost. They monitor performance based on how well you deliver. Too often, the board thinks they’re supposed to be captains. When you have nothing but captains on a ship, you have anarchy! (Plus, you sacrifice some much needed crew.)

The board’s job isn’t to run the organization. That’s what they hired you (the captain) to do. The board actually has its own job and it’s not an “extension” of yours. Their job (and their added value) is to represent the owners of the organization (people who expect certain outcomes or results.) This can be the community at large or a specific, defined group of stakeholders such as a neighborhood or micro business owners. In other words, they represent a subset of the community and sit at the board table on behalf of those who are not there. They are representatives.

My point is that, most board members don’t know that their job is representing and governing on behalf of those they represent.

if board members don’t know what their constituents think, how can they represent them? How do stakeholders have a voice in where your organization is headed? How does the board know unless they ask? Their job is to provide that vital link to the owners or stakeholders or their constituency.

Most board members don’t have a clue that that’s what they’re supposed to do. And, that’s what makes your job more difficult.

John Carver (author of Boards that Make a Difference) describes a traditional nonprofit board of directors as a group of competent individuals who get together to do incompetent things. Nonprofit board members tend to think that a nonprofit is a different animal than a for-profit. This perception is to the detriment of the organization. A nonprofit is an artificial entity created for the purpose of some pursuit — a corporation. The law gives corporations a great deal of power. For-profit corporations recognize this.

For some reason, nonprofits seem to think they have little or no power. Nonprofits have as much power as the board believes they have.

You can unleash that power by helping your board see a vision of what they can become when they’re not busy swabbing the decks and running the crew. Good board members are hard to find and harder to keep. Let’s not drive them away with mind-numbing operational matters.

Very sincerely,

Sherry

In his book “Good to Great”, Jim Collins offers this wisdom for CEO’s:

“Leading from good to great does not mean coming up with the answers and then motivating everyone to follow your messianic vision. It means having the humility to grasp the fact that you do not yet understand enough to have the answers and then to ask the questions that will lead to the best possible insights.”

This wisdom applies equally to a Board of Directors.

Boards need to be a disciplined as they expect their staff to be in gathering information. Good information gathering starts by crafting the right questions prior to conducting an environmental scan to assess whether your organization is meeting the needs of the community.

An environmental scan should insure that a board’s Ends consider the needs, concerns and demands within the community it serves. An organization should exist to create change. It should be the change itself that drive the Ends.

External Environmental Scans

The “value add” of a board as trustees of the owners is to be the link with the external environment and bring that information to the organization. This linkage needs to be regular and periodic. The information gathered will help a board assess whether or not its Ends are relevant and current.

Just as a for-profit corporation conducts an environmental scan to assist with the strategic planning process, a governing board should periodically conduct an environmental scan and ask questions for which it doesn’t already have the answers.

Open meetings, focus groups, surveys, and presentations from third party experts are all dynamic ways to gather information. In addition, a board could consider:

• Board-to-board meetings

• Researching community needs assessments and demographic data

• Breakfast or lunch meetings with groups in the community (one of my clients found this to be so successful that it launched a new entity of like-minded organizations who have similar funding needs)

• Open forums

• Town hall meetings

• One-on-one meetings with community leaders

• Board committees to gather intelligence

We Need “New” Solutions

People seem to believe that the status quo still isn’t working because they are still looking for “new” solutions. I’ve been in the nonprofit world for over 17 years and the same problems keep coming up. The spectrum runs from “my board is micromanaging” to “my board members are disengaged.” CEOs continually tell me about the need for their boards to become future-focused as opposed to functionally operational boards. Why, after all these years, are CEO’s still seeking solutions these problems when a perfectly good one has been there all along? It’s called Policy Governance®.

Muddle is an Acceptable Way of Life

Most boards and CEO’s don’t have a good grasp of governance. Governance is not management although nonprofit boards have a tendency to think of themselves as “uber managers.” Among those who are aware of Policy Governance®, there is still a great deal of misunderstanding about what Policy Governance is and is not.

(Download a concise description of Policy Governance — go to http://www.policygovernanceassociation.org/index.html and click on the #3 Quick Link.)

The term governance is used very broadly in the nonprofit world. CEO’s tend to become focused on tactics to manage board behavior – instead of seeking a system or process of governing. That’s why CEO’s are as frustrated with board politics, meddling, micromanagement* rubber stamping, etc. as ever. One CEO summed up this frustration by saying: “We’re kidding ourselves if we think we can set up a process [that is sustainable.] Living in chaos is normal.”

Reflections from a PG Perspective

As Policy Governance professionals it’s clear we have a lot of “undoing” to do. We need to overcome the perception that Policy Governance is a “cookie cutter” approach which causes it to be dismissed out of hand without any dialog on how it can lead to eliminating the chaos and creating an effective board of directors. In part, my fellow consultants and I think this is due to the perception that a model is a die-stamped, rigid structure.It’s unfortunate that the term governance is being used as a generic term to describe everything from organizational development to operations and web content management.

The term governance is used so generically, this is going to be a tough one for Policy Governance. It may be like trying to preserve a brand name like Kleenex and differentiate it from other tissues, but is worth some discussion. Give me your thoughts.

*(for a great article on micromanagement go to:http://www.help4nonprofits.com/NP_Bd_MicroManage_Art.htm