A key role of boards during strategic planning is to do a reality check.
During his first High Performing Boards Digital Series session in April, Steve Morrissette used setting football strategy as an analogy for setting strategy for a credit union.
“If we do an assessment and realize the best way to win in this conference is deep pass, but if we don’t have a quarterback that can throw the ball more than 25 yards, … it’s not the right strategy,” said Morrissette, visiting professor of strategy at the University of Chicago Booth School of Business.
In credit union strategic planning, boards need to ask questions that will illuminate whether the plan executives are proposing truly makes sense.
“The future is not certain,” Morrissette says. “How could this play out over the next three to five years? Will this strategy work if things don’t turn out as we expect? A strategy that doesn’t fit our people is doomed to failure.”
In his High Performing Boards Digital Series program in April, Morrissette outlined some key questions that experts suggest boards use to elucidate whether a proposed strategy is on track.
Key Questions From Experts
Morrissette cited six questions that BCG recommends boards ask during strategic planning:
- What are the plausible scenarios for the future of our industry?
- Will our strategy work if the macro environment changes?
- What are the key assumptions?
- How can we ensure implementation?
- Do we have the right talent to execute?
- What are the downside risks (and mitigation plans)?
Morrissette said McKinsey suggests boards check their understanding of industry dynamics, ensure there’s enough board/management debate before discussing a specific strategy, and support board and management deeply discussing several options.
KPMG, Morrissette says, emphasizes that boards need time to challenge management’s assumptions and that they should make sure they have the right people at the table to truly evaluate the strategy. The board can ask these additional questions:
- What other options did management consider? And why did they reject those?
- What was the reasoning behind the option management recommended?
What if questions-endless series of hypothetical ?s, encourage good validation
Key Questions From the Trenches
Morrissette concluded this section of his presentation by sharing this list of questions that board members said they have used effectively in their strategic planning work:
- What risks get bigger by doing this? Smaller?
- How will we know if it is working?
- What is our back door, plan B, if this isn’t working?
- Three years from now, what are the things that could have gone wrong?
- I hear what you are saying. Do we have any data to support our view?
- If we do this strategy, what future strategic options does it close off or make difficult?
- Do we have the financial and human resources necessary to execute this strategy?
- If we are miserable three years from now, what will have gone wrong?
- What is the biggest change we will have to make to pull this off?
- What did we learn from others that are doing a similar strategy?
- How is this better for our members?
- Can we afford it?
- What could go wrong?
- Who/which area is least excited about this strategy?
- Who/which area must change the most to make this work?
- What are the three or four key/biggest assumptions that lead you to recommend this strategy?
Lisa Hochgraf is senior editor for CUES.
Apply It to Your Boardroom
- What questions does your board currently ask during strategic planning?
- How are you using data to help validate your strategy?
- What question listed in this article stood out to you and why?