paso del norte health foundation gov. nov 4 2015

21st Century Governanceas Legacy Leadership

© Signature Resources 2015

Les Wallace, Ph.D.President, Signature Resources Inc.

November 4, 20151

Leadership Advice from a Wise Man

“These things happen naturally…

friction, confusion, underperformance.

Everything else requires leadership.”

Peter Drucker 1909 - 2005© Signature Resources 2015 2

Friction, Confusion as seen from the Board member Perspective

© Signature Resources 2015 3

Governance Process

© Signature Resources Inc. 2015 4

21st Century Governance Boards as Committees

(‘50s-’60s)

CEO Driven

Boards as Managers (’60s-’70s)

Operational / Fiduciary

Boards as Trustees (‘80s-90’s)

Policy and Strategy (John Carver)

21st Century Boards

Transformational Leaders Governance

as Leadership (Richard Chait)© Signature Resources 2015 5

“Nothing ages faster than the future.” David Carr

All centuries are dif ferent as the velocity and complexity of change accelerates. Every generation f inds their tradit ional models of doing business tested by new ideas & demands on leadership.


“The problem is never how to get new innovative thoughts into your mind, but how to get the old ones out.” Dee Hoc, Retired CEO Visa Card Executive

Legacy Leadership


Leaders don’t create followers…they create other leaders.Transformational leaders…

change the organization to assure relevance.

Leading in the 21st Century

From “Heroic” to “Transformational”

“Whereas the heroic leader of the past knew all, could do all, and could solve every problem, the post-heroic leader asks how every problem can be solved in a way that develops other people’s capacity to handle it.”

Charles Handy

A Legacy of 21st Century Leadership

A Legacy of 21st Century Leadership

Legacy Leadership Legacy: How capable an organization is to lead

itself versus depend on you!

Legacy: How well the organization transforms to stay vibrant, valuable and relevant.Transforms: not simply manages changes.

Thinking about legacy requires us to move beyond short term definitions of success.

To consider a journey from success to significance.

A High Performance Governance DisciplineAs Strategic Advantage


Who is this guy?

Ideal 21C job: Grandparent!

University professor / Hospital administrator

International consult ing company…

Touch 20,000 people yr. / Coach 18 Execs / 17 Boards a year

50% for-profit / 50% government & not-for-profit cl ients

Security First Bank Board, Counterpart International, World Future Society Board of Directors

Joining the board of the Mental Health Center of Denver


Who is this guy?


300+ Boards1,000+ Board Meetings

Over 100 Board Assessments


The BAD, the frustrated, the disengaged.


Synthesis of Elements of Governance


A Board’s Community Promise

Quality services at or above industry standards.

Services appropriate for the population and community needs—we listen, research, identify.

Access convenient and proactive.

A financially stable organization able to withstand downturns.

Conduct meets organizational standards for integrity and ethics.


Balancing Governance & Management

Many new board members see governance as committee work on steroids.

Community based boards are especially challenged here because a smaller organization needs “volunteer leadership” to get things done.

“Board” and “Executive Team” Partnership.

The board has legal and fiduciary responsibil ity for the financial health, ethical behavior and quality of services and products of the organization.

The board also has a responsibil ity to be a “strategic asset” to the organization—to assure it’s ongoing relevance.

These responsibi l it ies require a leadership partnership of trustees (board) and CEO and executive team.

The executive team executes on organizational management.

The board sets direction, tracks organizational performance, realigns focus as necessary, and works as a partner to help the CEO be as successful as possible.



As a “strategic asset” the board mix should have the competencies and experience to oversee and point direction for a complex organization.

“Think of governance as overseeing a forest rather than growing a single tree.”

Many boards make the mistake of looking for narrow specialties for their board such as HR, finance, marketing, technology, etc.

The 21 st Century Board looks for members who can see the “forest” of how it is all integrated and helps the CEO find the “specialists” to execute.



Boards need to “stay in their lane” and resist the temptation to manage the organization.

If an organization needs help with technology, marketing, human resources then a board needs to help the CEO find capable consultants or volunteers to help out.

Boards who get in the weeds or manage organizational projects can rob the organization of the capabil ity to build it’s own capacity to be successful.

But how do boards know the organization is real ly performing at reasonable standards?


Governance vs. Managerial rolesFUNCTIONS GOVERNING RESPONSIBILITY MANAGEMENT

RESPONSIBILITY

Strategic Planning

• Set mission & Vision.• Determine organizational values.• Identify Service philosophy. • Set strategic objectives (3-5 yrs).• Ensure operational objectives are aligned

with and support strategic objectives.• Approve major org. realignment• Approve new services / expansion,

cutbacks, partnering.

• ID long range operational & strategic issues for board.

• Translate strategy into operation.• Implement change & monitor

progress.• Provide timely market data.• Execute.

Finance /Budget

Audit/Sup. Committee

• Establish annual budget. • Approve working capital and capital

investment. • Approve variations from budget.• Ensure accounting system to track and

monitor use of funds.

• Ensure regular financial and operational audits by external sources.

• ID Enterprise Risk Management priorities.

•Conduct feasibility studies.•Investment analysis.•Financial forecasts.•Develop / manage annual budget.•Prepare Pro-forma budget statements.•Justify budget exceptions.•Complete ERM plans.



RESPONSIBILITY

Operational Excellence

• Ensure robust constituent feedback and evaluation of products / services.

• Ensure adequate quality processes: planning, evaluation, improvement.

• Approve significant corrective actions & changes in service profiles.

• Determine preferred organizational culture.

• Regular review and update of policies.

• Collect constituent input.• Routinely monitor quality

indicators.• Special studies and corrective

action as needed.• Review/update procedures.• Translate all Board guidance

into procedures and operations.

Government / Regulatory Relations

Community Relations

• Develop strategic alliances and partnerships.

• Maintain appropriate government, professional and organizational relations.

• Ambassador for the organization.

• Support professional activities.• Establish & maintain

governmental., professional & organizational relations.

• Serve as communication link.• Represent the organization to

community



RESPONSIBILITY

Human Resources

• Evaluate performance/set CEO objectives.

• Approve org. salary & benefits plans.• Ensure legal & competitive human

resources policies.• Ensure a leadership succession plan:

emergency & longer term.

• Hire Executive Team• Recommend salary ranges.• Develop/manage HR system &

records.• Performance management

system.• Highly engaged corporate

culture.• Recruitment & retention.• Management/leadership

development systems.

Board Development

• New member orientation.• Commit to in-service & conference

attendance.• Succession planning for board positions.• Evaluate Board performance.• Assess committee functions.

• Assist new member orientation.• Encourage / arrange training.• Support in governance

leadership development for potential and new board members.

• Assist board evaluation process.


Partnership: What CEOs Ask Me to Remind Boards!

A professional relationship : not bowling, golfing, or skiing buddies.

Feedback / direction / inquiry should be conducted in an executive manner not @ church or on the golf course.

Rules of engagement should exist :

Commit to face-to-face meetings outside of Board meetings.

Have an advanced agenda for the conversation.

Effective communication is specific not general.

Good feedback is timely!

“What CEOs Really Think of Their Boards.” HBR (4/2013)


CEO Leadership and Board Partnership

If the CEO’s not scaring the Board regularly, It’s not a robust partnership!


“But Les Wallace said to scare them!”24

Questions


A Board Governance Puzzle: The Big Pieces

Board Talent Strategy

Performance& Risk

GovernanceProcess


Talent


• Board composition one of the top five issues in today’s governance conversations.

• The board as strategic asset.

• Competency mix.

• Board as part of organizational brand.

• Moving beyond “volunteer” mentality to “trustee” mentality.

Applying Competency Theory


So, What do we do?

a. Profile the ideal board member for where you’re going, not where you are. Create a desired board make-up profile.

b. Identify a pool of folks who might fit your vision/profile.

c. Engage / screen / develop the pool.

d. Narrow the pool by giving the most capable and committed folks greater immersion & development.

e. Encourage the best to stand for board election.

Create a “board” dashboard to reflect “existing profile” and to track pipeline potentials and their levels of engagement and development.

Maintain an engagement with those remaining in the pool who retain interest.


Governance CompetencyFiscal l iteracy about large enterprise business.

Service mindset and experience.

Strategic mindset and experience.

Change & organizational transformation leadership.

Executive oversight—leading organizational leaders.

Experienced in the integration of technology into service and operations.

Ethics / integrity: personal behavior, confidentiality, respect for diversity—ideas and people.


Governance Youth Movement(As seen by some)


Pre-self Certification for Board Candidates

Ten Basic Responsibi l it ies of Nonprofit Boards , 3rd Edit ion (Richard T. Ingram, 2015, BoardSource)

Board Fundamentals: Understanding Roles in Nonprofit Governance, 2 nd Ed. (Lakey Berit, 2010, BoardSource)

Principles of 21st Century Governance, (Les Wallace, 2013)

Owning UP: The 14 Questions Every Board Member Needs to Ask (Ram Charan, 2009)

Governance as Leadership: Reframing the Work of Nonprofit Boards (Richard Chait, et. al., 2005)

Culture of Inquiry: Healthy Debate in the Boardroom (PDF) (BoardSource, 2007)


Strategy


Board as strategic asset capable with:

• Business environment sensing / tracking.

• Strategic thinking and Vis ioning.

• Transformational leadership.

• Innovative thinking.

• Risk management .

33

70% StrategyBoard As Strategic Asset

Board Surveys Tell Us…

“Not enough time on strategy.”

“Board as strategic asset.”

“Too much time looking into the rear view mirror.”

“Lack a strategic orientation.”

“Building a Forward Looking Board,” McKinsey Quarterly (Feb. 2014).


Strategy progress updates.

Business environment discussions.

New models / benchmarking.

Tracking patient & family value shifts in healthcare.

Developing partnerships / af fi l iations.

Governance succession and development.


21st Century Leadership:Strategic Thinking

Strategic Planning: “What is our desired business position and how must we change to get there?”

Strategic Thinking: “How might we re-design our business to leverage leading edge marketplace and business models?”

Identifying an alternative future position

Anticipating opportunity and threats

Setting change priorities

Designing change pathways

Evolving / adapting systems

Outlining formal plans

Three-five year cycle

Course corrections regularly

Challenging core business assumptions

Re-inventing the business

Exploration of new paradigms

Sponsoring paradigm shifts/pilot tests

Bold innovative movement

Confirming stakeholder value shifts

Projecting / anticipating lifecycles of

products, services, organizational model


Performance and Risk


• Consistent corporate performance:

$, quality, outcome impact.

• Tracking a comprehensive mix of

metrics.

• Active “enterprise risk

management” tracking at board

level.

37

Competent Performance Oversight:Uses a Balanced Scorecard/Measures Dashboard

Monitoring a set of “indicators” across the “balance” of the organization’s work.

Distil l ing the “cattle cal l” of numbers and progress reports from management into a visual report card.

“Balanced Scorecard: Measures that Drive Performance,” Kaplan/Norton HBR 2/1/2000.Research on Malcolm Baldridge Award Winners


Competent Performance Oversight:The Balanced Scorecard/Measures DashboardBusiness Performance Client / Patient Performance Employee Engagement /

Organizational Culture

Budget performance Capital investments Operating reserve Income mix

Robert Kaplan, Balanced Scorecard

Constituent value tracking Client satisfaction Quality measures Outcome measuresCommunity brand survey

Harry Beckwith, Selling the Invisible

Employee climate survey Employee retention Employee development Leadership development Talent succession Employee ideas adopted

Marcus Buckingham, First, Break all the Rules


Other categories are common: “Learning and Growth,” “Internal Processes,” “Environmental Citizenship.”

39

Keeping the right “KPIs” in Sight


What else does your board track?

Governance Process


• Informed, efficient.

• Prominent investment in board development.

• Annual self assessments and learning plans: annual assessments a 21st Century Benchmark!

• Officer development.

• Board talent refresh discussion and plans.


Self Assessment Annually

Once every four years or so conduct a full scope, deep dive assessment.

In between years conduct “micro” assessments of single governance elements.

5 Common assessment methods:• At end of every meeting.• Annual single focus assessment.• Full spectrum assessment.• Customized telephone survey.• Board member to member feedback.

Reflection on Governance Process

Board Competency &Recruitment

Governance Practices:MeetingsCommittees

StrategicFocus / Innovation

PerformanceTracking

Exec Team /BoardPartnership

Assessment& Development


Questions?


What Points will you Take Back to Your Team?Your Board?


Les Wallace, Ph.D.President, Signature Resources Inc.

[email protected] Signature Resources is a 40 person consulting consortium providing governance and

leadership strategy to public and private sector enterprise globally through two domestic and three international offices.

Dr. Wallace is recognized for tracking business environment and workplace trends and their impact upon business and government. His publications have appeared in Leadership Excellence, Personnel Journal, Credit Union Management, Public Management, and Nation's Business as well as numerous research and conference proceedings. His latest book, co-authored with Dr. Jim Trinka, A Legacy of 21st Century Leadership, outlines the leadership organizations need in a global, fast moving business environment. His governance workbook, 21st Century Governance is used by 2000 CEOs and Board members.

Les is a frequent consultant and speaker on issues of organizational transformation and leadership, employee engagement, strategic thinking and board of directors development and governance. His clients include Fortune 100 businesses, Government agencies, and not-for-profit organizations world-wide. Dr. Wallace is also the 9Minute Mentor, a series of short video tutorials on governance.


paso del norte health foundation gov. nov 4 2015

Leadership & Management