In 1985, the board of directors of Apple Computer summarily forced co-founder and chairman Steve Jobs out of the company and sent him packing.
That brings to mind an oft-quoted piece of advice about a board of directors: “They are a lot like mushrooms; you keep them in the dark and spread manure on them.”
But there’s another view that a board of directors can be a great source of creative thinking as you wrestle with some of the daunting problems facing your business.
As a “recovering lawyer,” I can state the legal theory behind having a board of directors is that it has a fiduciary duty to be the “conscience of the corporation.”
With that said, nobody has quite figured out how that responsibility should be exercised.
Boards often are accused of acting as micromanagers in making the life of management miserable. But some have been accused of being too hands-off and overlooking egregious crimes within a corporation, such as what happened at Enron Corp.
I believe there’s a happy medium in a way that can benefit your company.
The model I suggest was learned when I was a law student at Boston University. We used the case method to learn the law. I had numerous friends at the Harvard Business School, and they also used the case method to teach business.
How does this work? Here’s the drill and what I call the “secret sauce” to getting maximum benefit from a board of directors:
- Have your management team carefully define its biggest challenge or problem in advance of any given board meeting. If you don’t have any problems, then you’re living on another planet!
- Once that’s agreed to, create a brief describing the genesis of the problem and why it keeps you and your team up at night. It should read like a good novel, with all the ups and downs you’ve experienced on the issue.
- That brief should be sent to the board several weeks in advance of a meeting.
- In the cover email to the board, ask the directors to bring their most creative ideas to solve the problem identified in the brief.
- At the meeting, capture their ideas and suggestions in writing on flipcharts that can be hung around the board room. One study by the Harvard Business School suggests that the more ideas listed, the better the chances of producing quality ideas at the end of the process.
- Promise the board your team will evaluate all the ideas at future management meetings and let it know the course of action your team chooses.
- Capture all of those ideas and bring them to a management meeting to start the process of evaluating the ideas through the use of an evaluation matrix.
- After that, you can start testing on a small scale some of the ideas to find out what actually works and discard those that don’t. Some will be greenlighted; some will be given a blue light for more study; and some will be given a red light and are thrown out early.
- At future board meetings, you can report back on the ideas that were adopted and the results.
The advantage of this approach is it makes maximum use of the experience of the board members, without allowing them to force management to take up a specific course of action.
Let’s face it: most board members want their ideas implemented, but that can be dangerous because they don’t work in the business; consequently their ability to really understand the challenges of execution and the intricacies of what you face is not easily translated into sensible advice.
So this approach has the advantage of utilizing the board’s talent and brainpower, as the directors will feel valued when you get back to them on which of the ideas you chose to implement. They will love it!
They will no longer be required to sit and listen to management as it proposes resolutions for their approval. Rather, this requires the board to be actively engaged, which makes a board meeting far more lively and more interesting, and it will attract other quality directors when they hear about this approach.
This is worth a try. And if you need help in writing those briefs, feel free to reach out to me, as I did it in my youth as a lawyer.
-Dan Steininger is the president and founder of BizStarts, and the president of Steininger & Associates LLC, which helps companies drive new revenues through innovation. He can be reached at Dan@BizStarts.com.