Gap 5: Strategic Narrative | Beyond the Blazer
This is part of a series leading to a book I am writing on gaps in boardroom reality versus expectation in the 21st Century. The target audience is boards and management of NFP, club and non-ASX companies.
Directors forgetting their past decisions and their impact – their strategic story - hampers future decision making.
The board pack is the key source of information for directors prior to a board meeting. The content and quality of board packs are often highlighted as a key area for improvement in the board evaluations I conduct.
It is not an easy task to balance the provision of information required to make good decisions while being conscious of a director’s duties. Directors want to be better informed, and this does not necessarily mean they need a greater volume of information; they need a better quality of information.
While many directors are concerned with satisfying compliance in their board packs, many forget – or may have never known – there is another purpose. Board packs reveal the next chapter of the strategic narrative.
What is a Strategic Narrative?
I started using the word ‘narrative’ in my boardroom presentations this year. We remember the plotlines, twists and drama of stories far better than the endless rows of data we’re often subjected to in board packs.
Over time, the strategic narrative tells the story of who you are as an organisation; where you’ve been, where you are, and what you are going to do to get to where you want to go. It shows how the board and management is creating value and how they value their relationships internally and externally.
In reading many board packs for evaluation purposes, I find that the strategic narrative is absent or hidden. It might exist beneath layers of operational data or meaningless nice-to-knows, but you have to work hard to find the story… like a book that spends all its time describing the landscape while the characters never seem to go anywhere.
So how is documenting the strategic narrative achieved?
Compiling the strategic narrative starts with a robust strategic plan. A robust strategic plan includes your main actions to achieve the vision and how you will measure the achievement of the main actions (e.g. your KPIs).
A robust strategic plan is documented in such a way where management reports can easily respond to the main actions (the major plot lines) as well as highlighting progression on other strategies where appropriate (the sub-plot lines).
Think of it this way; how much screen time is given to the main characters of Games of Thrones? Compare this with minor characters. Jon Snow and Daenerys Tagerean are key characters who we watch with compelling interest and lots of screen time, but they would not have any plot movement without Samwell Tully or Jorah Mormont.
As you can see by my diagram below, management rely a great deal on the strategic plan in setting their business plans. The more robust the strategic plan, the better the focus of management. From all this activity, however, what will the management tell the board so the board remains focused on the bigger picture?
Many managers can get caught up reporting to the blue triangle – operational activity. As I say to many managers who complain that directors are only interested in operational matters, “If that is what you report, that is the level at which they will ask.”
Below is the part of the flow that makes up the strategic narrative. Your story tells the board where you’ve been, where you are, and what you are going to do next to get to where you want to go. You show the board how you are creating value and building relationships. You show the board how you are unique to other similar organisations. You may tell the story using words and numbers.
Remember, though, each management action isn’t the entire novel. It isn’t even the entire chapter. So your report needs to be cognisant of the other elements of the strategic narrative. In short, keep it to the point.
It is critical that, when put together in a board pack, the strategic narrative builds interest and trust, engages directors to ask constructive questions and participate in debate, and provides enough information to make good decisions. The narrative should show how different management actions are working together in a mutually beneficial strategic manner.
The narrative should enable all directors to have good notice of decisions that need to be made by them and supporting information without submitting to ‘information overload’.