THE STRATEGIC BOARD MODEL
Over the past 15 years, with the Australian Institute of Company Directors, we have developed a unique approach to boards and strategy which is summarised in the Strategic Board Model.
Source: G Kiel, G Nicholson, JA Tunny, and J Beck, 2012,
Directors at Work: A Practical Guide for Boards, Thomson Reuters, Sydney.
The strategic board model distinguishes three key aspects of strategy for boards. The first is “strategy as insight”. This is the understanding of the board, CEO and senior management team as to what is the organisation’s current strategy and the strategic options available to the organisation. This includes their understanding of the external environment, the organisation’s major purpose and goals, and the central strategies the organisation is undertaking to achieve its purpose. Strategy as insight is the content of strategy.
The second is “strategy as practice”. This refers to how the board and management team acquire and evolve this shared insight as to the
organisation’s strategy, how the strategy is then developed, elaborated and documented followed by how the board monitors strategy
implementation. Strategy as insight is about how boards and management teams “do” strategy.
Third, the Strategic Board Model makes the key point that top-level strategy is implemented when boards make major strategic decisions such as those involving major expenditures, significant use of people’s time and the acquisition, sale or upgrading of physical assets. For example, when a board approves a merger and acquisition; agrees to an expansion of geographic scope; approves the introduction of new products or services; approves the budget; approves significant research and development expenditure; decides on a new CEO with specific strategic strengths; agrees to a major capital expenditure proposal; approves the closing of a plant; or agrees to a capital raising or debt proposal – these decisions are all strategic decisions. It is the sum of these decisions which is an organisations real strategy.
There is a multitude of tools used by directors and managers to both gain strategic insight and share this with other directors and managers. There are both insight and practice tools.
Insight tools have been developed over the past 60 years to assist directors and managers conceptualise, understand, visualise, explain and discuss strategy. They come from a wide variety of disciplines: military strategy, economics, marketing, finance, the behavioural sciences and, more recently, the newly emerged discipline of strategic management. These insight tools provide is a mental framework for directors and managers to think about their current strategic situation, set goals for the corporation and provide a platform for discussing and understanding specific strategies. We have developed, taught and used many of these tools in our strategy work.
Practice tools provide techniques for conducting conversations about strategy and for documenting and communicating strategy. Typical
examples include strategic planning workshops and the various facilitator tools that can be used to promote a good discussion about strategy.
We assist boards and management teams to agree on the appropriate tools that best suit their organisation and industry as well as the
experience and understanding of both directors and managers.
While we have conducted many strategy sessions solely for management teams, we specialise in strategy sessions involving both the board and management team.