Strategy Execution Requires a Governance Connection
Research has clearly shown it is important that all business teams periodically analyze the effectiveness of their alignment with other organizational teams. Naturally, two of the most critical organizational teams – within a credit union, in this case – are a Board and the CEO /Executive Team.
The Board is led by its Chair; the Senior Executive Team is led by the CEO . While they are two separate teams, it is imperative that they work effectively together in leading the organization.
Neither the Board nor the Senior Executive Team operates in a total vacuum. If they did, their relationship would not be aligned. At best, they would be loosely linked – and probably ineffective in providing a totally integrated organizational leadership.
To avoid this unaligned scenario, there are six vital factors that lead to effective working relationships between the Board and CEO 's team. The six factors are:
- Commonness of Purpose
- Mutual Respect
- Clarity of Expectations
- Flexibility and “Influence-ability”
- Compatible Leadership and Problem-Solving Capacity
- Open Data Flow
1. Commonness of Purpose – Board and CEO teams that work together effectively have a strong sense of being on the same track. There is a “shared view” regarding the organization's future, purpose, values, and a clear short-term focus. The teams have compatible viewpoints regarding who they are, what they are about, and where they are going. They rely on each other to answer these questions and achieve their goals.
2. Mutual Respect – Perceptions drive behavior. How the members of one team view members of another team establishes the context of their inter-team relationships. When there is a climate of mutual respect, trust and cooperation are likely to result. On the contrary, operating out of prejudice, stereotyping members of other groups, and expressing cynicism about “them,” sours inter-team relations – eventually breaking down communication and productivity.
3. Clarity of Expectations – Aligned and agreed upon expectations between the Board and CEO need to be explicit, relevant, and current. Otherwise, unmet expectations and role conflicts can lead to disappointment, anger, retribution, and other dysfunctional dynamics. What one team does in relation to the other team needs to be kept clear. Each team needs to be diligent in consistently monitoring its authorities and agreed upon goals.
4. Flexibility and “Influence-ability” – In today's environment of rapid internal and external organizational change, the Board and CEO need to show both flexibility and “influence-ability” in relation to each other. Rigidity leads to resistance, slow adaptability, and inefficient use of organizational resources. If either team is unwilling or unable to make adjustments that are in the best interest of the business, problems are inevitable. Since both groups are interdependent, each needs to listen and adjust for the overall success of the organization.
5. Compatible Leadership and Problem-Solving Capacity – Boards and Senior Executive Teams are impacted by the quality of rapport between and among the leaders involved. Incompatible leadership styles and interpersonal conflict can seriously jeopardize the inter-team coordination.
Boards and CEOs must identify situations that need attention with regard to each other. They need to learn how to conduct cooperative problem-solving methods and action planning for improvements. This dimension of inter-group relations not only requires skills, but also courage, timing, and diplomacy.
Specifically defining Board and CEO authorities is an important step in minimizing conflict and improving team coordination.
6. Open Data Flow – Boards are primarily responsible for governance as well as their Short- and Long-Term Goals. CEOs (along with the other members of the Senior Executive Team) are responsible for leading their organization's Response to Strategic Direction. For inter-group success, there needs to be open communication across these boundaries.
Through newsletters, other communication tools, and Board meetings, both positive outcomes, as well as strategic threats, will be openly shared in a manner that is understandable and useful.
Competencies Necessary for Improving these Governance Relationship Factors
What are the competencies that the CEO (and management team) needs to exhibit to ensure these factors are developed to significantly improve the working relationship between Boards and management teams? Such competencies are outlined in CUNA Council's Career Excel for Board Relations and Development (see table below). Use these elements to create an evaluation form that you can use to survey your Board and management team. To build on your strengths and minimize barriers, assign a competency category to each executive and ask them to create a development plan to improve their assigned area.
If you work together to improve these competency areas, your credit union will see results that lead to effective working relationships between your Board and CEO 's team. You can expect results such as mutual respect, clarity of expectations, flexibility and “influence-ability,” compatible leadership and problem solving capacity, and open data flow. All these results combined will ensure your credit union's Board and management will work as a team – focusing on the “right things.” This ability to focus will reduce organizational stress, vastly improving your management team's productivity and ultimately adding value to your financial institution.
For more information on the effectiveness of your credit union's business teams and their alignment with other organizational teams, please contact Jim Cardwell or Karla Norwood at Cardwell, 800-395-1410 . Or visit our Connections Online website: www.connectionsonline.net.