Tip #28 Three Steps to Being a Results-Driven Board
The three steps for becoming a Results-Driven Board are:
- Define your organizational purpose.
- Translate your organizational purpose into measureable indicators and achievement targets.
- Monitor organizational performance related to selected indicators and targets.
Organizational Purpose. Define what your organization is for, its reason for existence. I’m not talking about what your organization does, what activities it engages in or what services it provides. I’m talking about what positive differences your organization wants to make in people’s lives, what results or benefits your organization is to produce for selected beneficiaries. For example, investors will receive a satisfactory return on their investment (ROI). Homeless people will acquire stable housing. People who are unemployed will acquire stable employment. Communities will provide a safe and healthy place for residents to live. Students will demonstrate achievement in school and be prepared for success in life after school. The Policy Governance® system calls these result-oriented definitions of organizational purpose Ends policies.
Measureable Indicators and Targets. Measureable indicators and targets are identified for each result to be produced. In the Policy Governance® system, the CEO is responsible to identify measureable indicators and targets (operational definitions of desired results to be achieved for selected beneficiaries) and to provide a justification for indicators and targets selected. Examples of indicators and targets might include: a return on investment similar to or greater than that achieved by similar companies, number of homeless people who will acquire housing and remain there for at least six months, number of unemployed people who will acquire employment and remain there for at least six months, a declining rate of violent crimes and air and water meeting standards established by appropriate governmental agencies, number of students meeting grade standards, graduating, and entering post-secondary education or employment within six months of graduation compared to other schools, etc. You can probably come up with better indicators and targets but the idea is that each organization identifies reasonable measureable indicators and targets relevant to their organizational purpose, relevant to the results they wish to produce in people’s lives.
Monitoring of Organizational Performance. Organizational performance is then monitored in an ongoing fashion to ensure that desired results are being achieved. In the Policy Governance® system, the CEO (or other person or persons designated by the board) provides the board data related to achievement of desired results. The board reviews these reports of organizational performance and makes two decisions: 1) have the measureable indicators and targets (operational definitions) developed by the CEO been justified by the CEO as reasonable measureable interpretations of the board’s stated results to be achieved, and 2) have the data presented been sufficient to demonstrate achievement of the desired results.
Through a brief board training session, I can help your board explore this three-step system for becoming a Results-Driven Board.
As mentioned previously, this three-step system for becoming a Results-Driven Board is part of the Policy Governance® system but it may be implemented by any board interested in being results-driven whether it embraces the total Policy Governance® system or not. For more information about the Policy Governance® system, please go to www.BoardsOnCourse.com/policy-governance.
To read other Tips for Effective Boards, click www.BoardsOnCourse.com/blog.