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Governance as leadership Reframing the work of noprofit boards - Ñhait R.

Chait R. , Teylor B.E. Governance as leadership Reframing the work of noprofit boards - Wiley publishing , 2005. - 226 p.
ISBN 0-471-68420-1
Download (direct link): governanceasleadership2005.pdf
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TYPE II GOVERNING: STRATEGIC 55
with the view that organizational leaders bear responsibility for crafting strategy, trustees generally accept the substance of the plan with only minor modifications. Even more to the point, the plan often reaches the board with the most consequential considerations already rationalized and resolved. Alternative scenarios and the downside risks of staff recommendations are either omitted or addressed summarily.
Type I boards follow the precept that “A board does not formulate strategy; its function is review” (Andrews, 1971). In this spirit, fiduciary boards attempt to do Type II work in Type I mode. Trustees approve the strategic plan and monitor implementation, usually based on written and oral reports from management. The board’s primary role is to ensure that the chief executive has developed and installed a comprehensible, defensible plan. Once the board approves the plan, trustees sometimes serve on committees and task forces directed to execute various aspects of the plan, especially initiatives related to finances and facilities.
As strategy evolved, so too has the board’s role, sparked by a new emphasis on competitive position, a concept pioneered by Harvard Business School professor Michael Porter. In an article that asked,“What Is Strategy?,” Porter (1996) answered,“Strate-gic positioning means performing different activities from rivals’ or performing similar activities in different ways.” Influenced by the fundamental message of Competitive Strategy, the title of Porter’s landmark book (1980), more sophisticated boards pose questions quite different from the more technically oriented Type I line of inquiry. For instance, trustees now ask: What business are we in? What do our customers want? Where do we have a comparative advantage? What are our core competencies? Some nonprofit CEOs and staff are unsettled by these
56 GOVERNANCE AS LEADERSHIP
questions, which clearly imply that competition is real, that missions cannot be disentangled from markets, that nonprofits have to be selective and strategic about priorities and, perhaps most uncomfortably, that organizations have to change in order to suc-ceed.While some staff may prefer to imagine a glorious future, oblivious to troublesome truths, few have that luxury.
strategic disiLLusionmENt
Practical experience has not always produced the dramatic results touted by proponents of formal planning. Like other instant solutions and managerial panaceas, such as Zero-Based Budgeting, Total Quality Management, and Business Process Reengineering, the virtues of planning have been oversold and the drawbacks overlooked (Shapiro, 1995). Gradually, the pendulum swung in the other direction. Birnbaum (2000) described this stage as “narrative devolution,” a period when “overly optimistic claims of success are replaced by overly pessimistic claims that the signs of disappointment are everywhere...”
Enter Henry Mintzberg. More than anyone else, Mintzberg is the naysayer of formal strategic planning, as reflected by the title of his authoritative work, The Rise and Fall of Strategic Planning (1994). Mintzberg argued that formal planning was overly reliant on hyper-rational analysis to achieve expressed goals.The lockstep mechanics of the process and the press to develop a logical, linear game plan squelched creativity and synthesis, the necessary catalysts for new ideas to blossom. Inventiveness and resourcefulness, Mintzberg asserted, cannot be programmed into a planning process, as if“ ‘be creative’ or ‘think boldly’ [can be] an isolated step, another box on a chart.” Quoting organizational theorist Karl Weick, Mintzberg continued, “Scientific
TYPE II GOVERNING: STRATEGIC 57
thinking is probably a poor model for managerial thinking...” The “grand fallacy” of formal strategic planning, he concluded, was that, “Because analysis is not synthesis, strategic planning is not strategy formation.”While few people would explain the problem in these terms, disillusionment with strategic planning has escalated. The plans of nonprofit organizations (and some corporations, too) frequently seem to be the triumph of a cumbersome process over progress. Sometimes, the actual weight of the plan seems greater than its substantive heft.
For many nonprofit boards that have embraced formal strategic planning, one overarching concern has arisen: the organization’s strategic plan is neither strategic nor a plan. A swirl of six different, yet related, problems contributes to the sense among many trustees that the strategic plans of nonprofits are more utopian portraits than blueprints for action.
1. Plans without traction. A formal plan, in theory, details how an organization expects to move from current circumstances to a preferred state.The process usually involves extrapolations from the present to the future. However, nonprofits normally accord far more attention to the latter than the former.And therein lies the rub. In many plans, dreams trump realities. There are pages upon pages devoted to a brighter future with little or no attention to current conditions or the perhaps inconveniently intractable financial, political, and cultural realities that impede or preclude notable progress. The “blue-sky” quality of these plans overshadows down-to-earth considerations—the practical yet crucial daily routines that must change to realize a new vision. As a result, the status quo, ironically, goes relatively unchallenged and unchanged except incrementally, the very approach strategic plans are supposedly designed to avert. As a
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