2010 – Page 60 – Management Library

April 28, 2010February 18, 2022

Here’s Why Advisory Boards Are Often Useless

An Advisory Board (or Advisory Council or Advisory Committee) is a collection of people formed to advise members of a governing Board of Directors. The Advisory Board does not have formal authority. It cannot issue directives that must be followed as is the case with a governing Board.

There seems to be an increasing number of Advisory Boards. Far too often, an Advisory Board starts out slow and then stalls out completely, or very rarely meets and ultimately is not taken seriously at all.

An Advisory Board can be a tremendous complement to the effectiveness of the governing Board of Directors as it works to address a complex consideration or to undertake very specialized project. Those are the best reasons to form an Advisory Board.

However, sometimes Advisory Boards are used to try maintain formal and visible relationships with people who have particular strong status, for example, people whose terms have expired on the governing Board, leaders in the community, or people having highly respected skills. Those are usually not good reasons to form an Advisory Board – or at least, they’re not good reasons to expect much from an Advisory Board.

The influence that Advisory Board members have in their recommendations to the governing Board depends on the charter, or formal description of the Advisory Board. The most useful Advisory Boards are organized almost as carefully as committees on governing Boards. For example, for Advisory Board “ABC”:

ABC meets on at least a quarterly basis. Meetings are scheduled by the ABC Chair who also develops agendas for the meetings.
ABC provides written recommendations to the governing Board regarding operations and coordination of product DEF.
ABC is comprised of 9 members, each representing a major geographic area of constituents of Product DEF.
Membership of the ABC is selected on an annual basis by the governing Board.
ABC members serve a one-year term, which can be renewed two times.
ABC is facilitated by a Chair who is appointed by the governing Board. The ABC Chair serves a one-year term and is a member of the governing Board.
ABC recommendations are formed by a vote of the majority of the members of ABC.
Highlights of, and recommendations from, all ABC meetings will be documented in meeting minutes and provided to the Board Chair of the governing Board within 2 calendar weeks of the ABC meeting.
Operations of ABC are evaluated annually by a Committee comprised of 3 members of ABC and 2 members of the governing Board.

(The terms of the charter might even be itemized in a set of bylaws for the Advisory Board.)

It’s often best to have a member of the governing Board on the Advisory Board to ensure that the governing Board is always aware of the activities of the Advisory Board. That practice also ensures that Advisory Board members feel some legitimacy in their roles – that they feel that they’re taken seriously by the governing Board.

An Advisory Board is as useful as you expect it to be. If you formally charter the Advisory Board, then its members are more likely to realize that you take the Advisory Board very seriously. If you “park” people on the Board just to somehow keep a relationship with them and then expect that Board to somehow be useful, you’ll likely end up instead with a collection of people who just feel “parked.”

What do you think?

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Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

April 28, 2010February 18, 2022

What’s the Real Purpose of Word-Smithing Mission Statements?

A businessman looking up at a corporate building

It’s common that a client will want to start strategic planning with “updating the mission statement.” After all, that’s what a lot of experts suggest. Mission statements get a lot of attention from writers and consultants. Many of them assert that the statements should be highly inspirational and easy-to-read. They give examples of mission statements that roll off the tongue.

However, far too often, what usually occurs is a word-smithing session. “Should our mission include ‘transformational’ or ‘transcendental’?” “Are we ‘serving our customers’ or ‘collaborating with our customers’?”

Those session starts out with great energy and exhilaration, and planners greatly appreciate the facilitator’s guidance and presence in the planning. However, all that soon dissipates as planners become increasingly frustrated with not knowing which words to include. Soon they begin to wonder if the word-smithing really is providing any value to the process. They suspect there are more important matters to decide.

And that’s how much of the planners’ precious time is spent.

I assert that it’s often best first to answer – even to validate answers to – certain questions. The answers to those questions make it much easier to know what should be in the mission statement, and it makes the mission statement a true compass for the organization’s strategies, plans and practices.

Planners should first address:

What needs and wants exist among our customers? How do we know?
What needs and wants do we want to address? How do we know?
What group(s) of customers do we want to serve? How do we know?
What makes us different than our competitors? How do we know?

Sure, answering those questions is not as energizing or as exhilarating as fantasizing words on a mission statement, but the questions are a lot more useful.

Planners might do the word-smithing in a couple of strategic planning cycles, but they’ll usually start to feel that it’s not really planning, rather it’s just a way to avoid the hard work of answering the hard questions.

Word-smithing the mission statement might lend the illusion that it is indeed the heart of planning — but it’s not.

What do you think?

Here’s many more resources about strategic planning.

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Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 763-971-8890
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

April 28, 2010July 15, 2022

Onboarding – How Do You Welcome Your New Customers?

Usually I end my posts with a quote to provoke further exploration of these Customer-Centric concepts. Today I am starting with one because I believe your Customer Experience map should be considered your key strategy to elevate you above your competition. Onboarding is a critical element of this strategy.

“A strategy is, at its core, a guide to behavior. A good strategy drives actions that differentiate the company and produce financial success.” Chip Heath and Dan Heath, Authors of Make it Stick.

Getting customers is hard enough. Keeping them is the greatest challenge of all. A special Onboarding experience should be a key element of your overall Customer Experience strategy. Let’s talk specifically about how you welcome your new customers.

A special Onboarding experience takes advantage of Buyer’s euphoria. Making purchase decisions can be tough. There is a sense of relief when the decision is made. This is the time to seize the moment, as soon as the contract is signed or a new customer is registered. Shower your new relationships with love and attention. Reinforce to your new customer that they made the right decision to do business with your company.

Critical components of Onboarding:

Outreach: In general, your customers should feel appreciated. How do you currently say “Welcome, Thank-You-for-your-Business”? Email, cards in the mail or a phone message demonstrates how much you appreciate them.

Set Expectations: I also list this as a Customer Service Basic in a previous post. If your business entails some kind of implementation or project rollout, your welcome letter should include a general guideline of the process and timeline.

Introductions: Depending on your business, you should provide some key points of contact for your new customers. Ensure they have the 800# and the email address. Ensure the end users of your products/services know how to get in touch in the event of problems.

Getting Started: A quick start guide, product/service documentation and online training sessions are all modes of helping your new customers get started, while they are still excited about the new purchase.

Checking In: Do you have a process for ensuring you check-in with your new customers? Do you have a way to ensure your customers are using your new product or service? One of the top metrics I listed in an earlier post is Utilization. If there isn’t rampant use within the first 3 months your new relationship may be at risk.

Ask so they will tell: How are we doing? Finally, if you don’t ask you are not likely to know why this new relationship may be failing. A key element to your overall experience is that you keep asking.

Bringing on new customers and keeping them are your biggest challenges. Give your customers a reason to say “this is the start of a beautiful relationship.” Ultimately you are striving to build long term customer loyalty.

Share what is unique about your Onboarding process.

April 28, 2010August 14, 2022

Be Careful About Proclaiming “Failed Management Movements”!

Last week, I got a call from a consultant who lamented the “failure of all those management movements.” As usual in these conversations, the caller went on to explain how his particular idea was what leaders and managers really needed.

That type of lament seems increasingly common in literature about the need for “transforming organizations” and “transforming society.” I think the lament is simplistic and even reckless.

There have been many major movements and models in management, e.g., scientific management, management by objectives, quality circles, Total Quality Management, Business Process Re-Engineering, One-Minute Managing, Self-Managed Teams … the list goes on.

I assert that many of these movements and models became integrated with the others and that many of them built on each other — they didn’t “fail” any more than a recent addition to a house was a “failure” because more additions were needed, or any more than therapy sessions were a “failure” because the person needed more therapy later on.

I sometimes wonder if the hyperbole from consultants and writers is as dangerous as the situations those people are trying to improve.

What do you think?

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For more resources, see the Library topics Consulting and Organizational Development.

April 28, 2010February 9, 2023

Should Nonprofit CEO Pay Be Based on Outcomes?

Last week, I did a workshop among nonprofit CEO Executive Directors. Some of them expressed great frustration at the exorbitant compensation of CEOs of very large, for-profit companies. They mentioned that many of the companies’ products were very poor quality anyway.

One participant offered a rather novel assertion that the pay of those CEOs should be based on how much customers actually benefited from the companies’ products and services. (She refined her assertion a bit by adding that compensation should also be based on performance of the stock and on some performance goals set by the Board.)

Another participant in the workshop ventured the question, “Then should a nonprofit Executive Director’s pay be based on how many of the outcomes were achieved by participants in the nonprofit’s programs?” (Remember that outcomes are the types of changes achieved by participants in programs, e.g., new knowledge, skills and abilities.)

That question produced a firestorm of indignation and assertions about how nonprofit organizations are very different than for-profits. I asked for a vote to get a sense for how many people believed that the E.D.’s salary should be based, at least in part, on outcomes. Only 2 out of 15 agreed. Then I asked for a vote of how many believed that a for-profit CEO’s salary should be based on some measure of customer benefits — 9 out of 15 agreed that should be the case for for-profit CEOs.

What do you think? Should a nonprofit E.D.’s salary be based somehow on outcomes from programs?

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For more resources, see our Library topic Nonprofit Capacity Building.

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April 28, 2010August 14, 2022

Leadership Development

Introduction to Leadership Development

What is meant by leadership development? In this blog entry leadership development will be discussed as processes for development of leadership capabilities within organizations. This particular submission will focus its overview of leadership development on current trends in the for-profit sector. The primary reason for limiting my entry to the business realm is due to the fact that it’s what I know best. Also, there will be plenty of opportunities to converse on how leadership development practices are employed in other domains, such as academia, government, and non-governmental organizations. And I invite others to share of their experience of this discipline in other contexts. I imagine my co-host Julia will likely have some thoughts on leadership development in the non-profit sector.

Leadership Development Design

The following suggestions are high level and extremely simplified for the sake of some blog brevity. The design of a leadership development processes is slightly more involved than what the following summary might suggest. To start, the design requires an in-depth analysis of the leadership qualities and capabilities an organization requires, now and in the future. These requirements include an understanding of the culture and the type of leaders that tend to thrive in that particular environment. It also involves developing clarity on desired business outcomes and the qualities that an organization anticipates will be required of its leaders to drive these outcomes. Once the desired qualities and capabilities (often classified into competencies) are confirmed, the appropriate leadership development systems and tools can be selected. The majority of leadership development programs include some, if not all, of the following components: mentoring, coaching, assessment, action learning, instruction, and the use of internal leaders as instructors. There also is notable effort being placed on the design of leadership development processes that are more interactive, integrated, globally oriented, and leverage social media technology. These components will be presented in detail in future installments. In the meantime, it would be fitting if anyone wanted to comment on or add to this list.

Keys to Success

In many ways, the key to the design of an effective leadership development process is to assure alignment with the organization’s culture, strategic direction, and the business initiatives considered most critical to future success. Some people might be put off by my not placing more emphasis on individual self-actualization, leadership ethics, and having a positive influence on the world at large. My hope, and intent, is that any development process shall in fact contribute to personal growth (if not transformation), ethical decision making, and a socially responsible outlook. But the best way to assure wide based support and the necessary resources to implement and maintain effective leadership development initiatives is to establish a clear cultural fit and correlation with business imperatives. To this end, there has been concerted effort in recent years to integrate leadership development to human capital systems and develop methods for measuring the impact of the processes on different levels of the business. Of course, the evaluation of impact remains a highly desired, challenging, and somewhat elusive goal for most organizations. The measurement of leadership practices on the bottom line (triple or otherwise) will definitely be discussed further in the near future on this site. But if anyone has any noteworthy perspectives in the topic, feel free to chime in now.

April 28, 2010July 15, 2022

Look Out, It’s The Media! Run! Basic Mistakes/Assumptions People Make 1.0

In my PR career, I’ve heard some unbelievable things people have said about “The Media.” Things that made “The Media” out to be some kind of monolithic machine, the political equivalent of the Teabagger viewpoint about “The Government” (as if “The Government” were one entity. Seriously, are they mad at the Department of Agriculture, or The Business Transformation Office over at the Department of Defense?!)

Still, the big bad “Media” is there to report news and if you have bad news, it generally will be reported in some fashion. There are ways, however, to diffuse the fear or anxiety of dealing with “The Media.” Some of these true examples hopefully underscore my point:

1) “Are they going to look for skeletons?” asked one worried small business owner who was going to be profiled. If the business desk is assigning an Investigative Reporter to your story, yes. However General Assignment reporters are not there to dig up the dirt and look for bones, they simply want your story. They don’t have another agenda. Having a good media kit and key messages in place to hand off to someone in the media puts up guardrails to help focus your business or issues on what’s important and positive.

2) “Can I review the story before it’s written?” Hardly ever, although sometimes the rare reporter who gets really want to get it right, or is challenged by a complex issue about something your company does, or something you did, will let you review for accuracy but not content changes. That’s why media training in advance of interviews with “The Media” to stay on message is a good thing to do.

3) “I have an event on Friday night that I would love to get some coverage of before that, can it happen?” asked someone once in a cold call two days before the event. Unless you’ve got the president of the US or Leonardo DiCaprio at your shindig — or have truly invented a whizbang device that no one has ever seen before — chances are almost nil.

Even with a news cycle that turns over 10 times a day or more on the internet, sufficient lead times are important to adhere to. Give yourself — or your PR person a few weeks in advance of when you want your story “out there” to contact the right person in “The Media” (Note: Magazines are often working 4-6 months ahead of real time.) Breaking News is one thing that gets instant coverage, but that is usually a tragedy of some sort unfolding or a national or international incident (although these days, a celebrity marriage break up or drug bust, or even a car chase in Oklahoma, unfortunately qualify). Investor Relations is a whole other universe, and we won’t go there today.

4) “The Media” will make my company famous. Well, it could. Overall, a few stories well placed will increase your visibility, hopefully help drive sales and/or achieve some of the objectives you set forth once you engaged a PR company or put your PR strategy into motion.

But let’s be realistic. Most overnight success stories I know of took 10 years of hard work. PR — as a wise friend once described it — is like drip irrigation in the desert: Droplets of water falling on the plant eventually produce a bloom, and if you’re lucky, fruit.

5) “Can I get the photo/video/radio interview The Media?” Generally no. It becomes the intellectual property of the paper, television or radio station. You can get back copies or links of the paper you need for a price. And there are services to obtain DVD copies or links to something that ran on TV, or a radio interview. Usually all such copies come with legal guidelines about how the material may or may not be used. Always have your own photos on hand (sometimes “The Media” will request it — and maybe even your own b-roll — footage that tells your story in images as background, if appropriate).

Remember, dealing with “The Media” is like dealing with other human beings. Sure, people working in the profession hold a power to magnify what you do. But the last time I checked, those doing it were like you and me, 90% water.

April 28, 2010August 14, 2022

How Crisis Management Can Enhance the Due Diligence Process

DUE DILIGENCE: “The process of investigation, performed by investors, into the details of a potential investment, such as an examination of operations and management and the verification of material facts.” (Source: InvestorWords.com)

The title of this article may surprise some readers. What possible role, you might ask, can crisis management play in the complex interaction between potential investors or buyers and the organizations that are the focus of their due diligence investigations?

In my experience, those who are in “acquisition mode” — be they venture capitalists, expanding companies, individual or group investors — do not garner certain types of information that could be critical to making and protecting their investment or purchase. For this article, I’m referring to buyers, those who are actually acquiring a business, and investors making significant investments.

The traditional due diligence process usually involves some formal background checking, discussions with references, and probably a thorough Internet search. What it often doesn’t give buyers/investors is information critical to (a) the reputations of all involved in the potential transaction and (b) the potential acquisition/investment target’s ability to prevent and survive crises. EVERY organization is going to have crises; if they can prevent some, and get through others quickly and effectively, then the acquisition/investment will be far better protected.

Categories of Information

Here are some of the categories of information that can be provided via a combination of techniques generally associated with (a) a crisis management vulnerability audit and (b) investigative journalism.

What reputation does the acquisition/investment target have with all its stakeholders, internal and external? How does that compare with what the company says about itself? Stakeholders would include everyone from employees to customers, from board members to journalists.
For acquisitions, what reputation does the acquirer have with its stakeholders and with the stakeholders of the acquisition target? That reputation will very much impact the reaction of all stakeholders to news of a possible or actual acquisition.
How are all stakeholders affected by the acquisition or major investment going to react to it? Positively? Negatively? What can be done in advance — understanding that news of the such transactions cannot be released until appropriate — to optimize all stakeholders’ response to the news?
Has the acquisition/investment target done any crisis preparedness — vulnerability assessment, planning and training — that would allow it to better survive inevitable crises? Not just its ability to manage any distress caused by the initial business transaction, but the business’ ability to survive all crises to which it is vulnerable? If any reader has not previously received a copy of my free “Crisis Preparedness Checklist,” request it by email to jonathan@bernsteincrisismanagement.com. It will prove useful for a quick preliminary evaluation of any organization’s readiness for crises.

To the extent the situation permits, in an often-sensitive pre-acquisition/investment environment, stakeholders are contacted directly. But there are also many indirect sources of published/public record information that can be identified through comprehensive, Internet-based research (requiring a high level of expertise, not simply a “Google search”), as well as indirect sources of information on the opinions and beliefs of stakeholders. Collected and analyzed, they can provide investors with a sometimes eye-opening glimpse at challenges and opportunities they would not capture through traditional due diligence examinations.

I’ve had the opportunity to work with attorney Mike Lappin, a partner at Quarles & Brady LLP specializing in mergers and acquisitions, on a couple of transactions of this type. We both found that combining legal and crisis management capabilities has brought substantial added value to the entire transaction, from due diligence to “done deal.” Mike had this to say about due diligence:

“Due diligence investigations often focus on financial and legal matters as a buyer attempts to rather quickly understand the target’s business and evaluate the possible risks and rewards from the transaction. However, other factors, such as how the buyer is perceived by the target’s employees or how prepared the target is to deal with unexpected events, can have a significant effect on whether a transaction is a success, and these factors often do not receive the same attention in the due diligence process.”

In the new world of corporate governance regulations and general distrust of investment-related wheeling and dealing, buyers and investors can’t afford to be without all possible critical intelligence. Using crisis management tactics pre-investment or pre-acquisition can provide that information.

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For more resources, see the Free Management Library topic: Crisis Management
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April 28, 2010February 18, 2022

Goldman Sachs – Trust, Corporate Culture and Societal Expectations

The issues surrounding Goldman Sachs highlight many of challenges facing the business ethics industry. There has been a public furor over the integrity of certain industries, such as finance, even though the leaders of those companies can state categorically that they acted legally, and ethically, within the guidelines they have worked within for some time.

However, our common sense notions of what is ethical and what is fair are determined by social norms. What then are the responsibilities of leaders in firms, and in industries whose ethics have been challenged, to acknowledge changes in how our society perceives them? Is it better to batten down the hatches and wait out the storm, or to develop the means to engage in an effective dialogue with these external stakeholders to maintain trust?

Much of the furor over Goldman Sachs rests in our collective ambivalence over Wall Street itself. Is there something inherently unethical about the entire trading industry?

The Senate hearings highlighted a mismatch in how Wall Street sees itself and how it is seen. Goldman’s witnesses said a market maker—someone who matches buyers and sellers—has an obligation to describe accurately the product being traded, but needn’t disclose his own position. Are we surprised that a trader can take the stand and simply say that we were doing what we’ve always been doing?

Maybe they have, and it’s us that are changing our expectations?

Does the nature of the federal bail-out change our definition of what is ethical?

While it may sound trite at first, this gets to the heart of the perceptions of trust and the commitments that were broken. Big boys on Wall Street can do what they have been doing for 200 years. Caveat Emptor.

But when Wall Street is financed by Main Street, new relationships are formed. Firms now have new sets of stakeholders, and they are required, if not by law, then by social convention, to maintain a relationship based on trust.

Trust requires a whole set of expectations that run counter to the caveat emptor trader culture: predictability, looking out for the other person’s interest, etc. It’s when these values clash with our independence and freedom values that drive our entrepreneurial trader side that we see the fireworks.

April 27, 2010August 14, 2022

Social Enterprise Summit + World Forum Opens Tomorrow

A man presenting at a social enterprise summit

Tomorrow is the first day of the Social Enterprise Alliance’s annual Summit, a national conference that features a wide variety of presentations, workshops and networking in this field. This year’s Summit is being held in San Francisco. More information is available at www.se-alliance.org.

If you can make it to the conference, great, I know you won’t regret it. I might see you there. Incidentally, I’ll be co-presenting a workshop on Thursday morning on business planning for established social enterprises. My case study will be on the Greyston Foundation, operator of the Greyston Bakery, which is a social enterprise in Yonkers, New York that supplies all the brownies that go into Ben & Jerry’s ice creams. My colleague, Tamra Ryan, will be talking about the Women’s Bean Project, and in particular their recent nascent jewelry venture.

But if you can’t make it, you can still connect via the wonders of social media. Here’s one way to do it. SEA’s two Huffington Post contest winners will blog live from the conference. You can either follow the SEA blog or subscribe to SEA’s RSS feed to read their daily posts. Check them out at: http://www.sea-alliance.blogspot.com/

Even though I’ll be attending the conference, I plan to read them just to see how their observations differ from mine.

Alternatively, if you’re Twitter-inclined, check out TWITTER #socent10 at http://twitter.com/socent10. Or Facebook at
http://www.facebook.com/pages/Social-Enterprise-Alliance/59580246388?ref=ts

Frankly, I have no idea if these postings will be entertaining, informative or, well, something else, although I expect to find the blogs from the conference quite interesting. I would recommend connecting at least a couple times during the next few days to see if there’s some stuff there you can use in your own social enterprise work. We’ll see whether social media brings some value to those who cannot attend in person. I hope so.