01 Aug 8 ways to get the most from your strategy away day
A bit of blue-sky thinking and white space
This is the time of year when many company secretaries and management turn their minds to the annual away day. In normal board meetings, the regular agenda of business and seemingly endless “governance” items can squeeze the time available for strategic discussion. Yet, setting the strategic direction is arguably the Board’s prime responsibility. The non-executives are there to hold management to account on delivering the strategy but how can they exercise that responsibility if it hasn’t been clearly agreed in the first place?
Most boards now hold away days once or even twice a year, and many find them stimulating and rewarding. At the same time, when we’re doing board evaluations, it’s not unusual to detect a sense of disappointment, lost opportunity or even tedium at “yet another away day”. When boards get it right, we find they’ve followed these eight critical rules.
Good practices to consider…
Identify what you want to achieve. Are management developing a whole new strategy or coming to the Board with a tactical refresh? For some organisations, where the next few years are clear, it may be helpful to take a look at the vision for the very long term. For others, the challenges of the next couple of years are enough to handle. In some cases, the aim will be to pause and take stock of progress in implementing strategy – what’s working well and where are the risks? In an organisation that’s struggling to develop any sort of coherent strategy (and we do see a few) it may be ambitious enough to focus on one narrow aspect of the market or one strategic driver such as technology or people. There’s no one way to do it – but the objectives of the day need to be realistic. And make sure you communicate them effectively to both management and the non-executives.
Things to avoid…
Don’t assume everyone’s on the same page. The CEO and Chair need to agree about what they want to get out of the day and work together to achieve it. A lack of clarity can result in frustration from the non-executives, an ineffective use of time and disengagement in the strategic process. Getting the Board and wider management team together and away from business-as-usual is a precious opportunity, so use it wisely.
Good practices to consider…
Get the date in the board calendar a year or more in advance, avoiding busy times around investor briefings and year-ends. If you hold the strategy day during a period when executives are stretched, their hearts and minds won’t be in the preparation – or there on the day. A good time can be in advance of the annual budgeting and business planning process, so that these can reflect any adjustments being made to the strategic direction.
Things to avoid…
“We’ll be fitting the strategy day in later in the year,” is a phrase we occasionally hear when we’re doing a board evaluation. Our reply is usually, “Good luck with that!” The result of last-minute spontaneity can be an away day that never materialises or is announced at too-short notice. Lack of time and unavoidable absences tend to dent people’s enthusiasm.
Good practices to consider…
The point of the day is to have well-informed discussion and debate of strategic options. It can be good for the Board to hold a session well ahead of the away day – perhaps over a board dinner – which allows directors to debate early-stage thinking in an informal and free-flowing way, set some parameters and give the management team some ideas to think about. This can set the Board up well for a more focused discussion at the away day. Another approach is to have the free-flowing session at the away day itself, with the formal approval of the strategy taking place later.
Things to avoid…
Management shouldn’t arrive with a blank sheet of paper. There’s a limit to how much blue-sky thinking boards can usefully do. At the other extreme, the management team shouldn’t have endlessly debated and polished their proposal before coming to the Board. This will limit the scope for useful discussion. And any serious challenge is likely be quashed by the defensive response, “We’ve thought of all that!”
Good practices to consider…
Depending on the objectives, you need to allow at least a full day with an overnight stay, or travel schedules interfere with the sessions. Most boards will want to look at the context in which the business is operating, the macro-economic trends and the competition. They’ll also want to consider different divisions, products and locations, the opportunities and the risks – all of which takes time.
Things to avoid…
Don’t imagine it’s going to be possible to discuss and confirm the five-year strategy within half a day. A lot of boards are now working off two days and getting a lot more value from the exercise. And certainly don’t be tempted to squeeze in a regular board meeting at the same time. It will sap energy, distract minds and, potentially, eat severely into the time set aside for the strategy.
Good practices to consider…
The venue will determine the atmosphere. Do you have relaxed armchairs or a boardroom table? Breakout sessions or a packed room? The away day should be an opportunity for a different sort of conversation which demands a different location. A lot comes down to the Board’s traditions and personalities, though it’s good to shake things up from time to time.
Things to avoid…
Some boards don’t go away at all and just move to a different room or a building down the street. The drawback is that executives are still tempted to fit in other things around the away day schedule – and the Board’s mindset can remain too transactional and short-term. The setting needs to be informal enough for people to relax into a free-thinking and sharing mode.
Good practices to consider…
Many boards use the opportunity to invite a wider selection of executives than normally attend the Board, with key divisional and functional heads coming along. Non-executives value the opportunity to spend time with them. It’s important to decide whether they come in and out just for their sections or attend more of the day. There’s no hard and fast rule. Hearing how the Board respond to colleagues’ sections of the agenda can be valuable for the whole senior team. But board members may also want some time to debate competing demands on scarce capital with only the executive directors in the room.
Things to avoid…
Don’t invite a cast of thousands. Not every single executive needs to be there or the atmosphere will become too much like a conference. And avoid long presentations. Ensure everyone is briefed to give a concise recap of what’s been discussed previously and to position the main dilemmas and options – without going through an endless PowerPoint deck. Some background and scene-setting is helpful but this shouldn’t fill up the bulk of the day. And don’t let the CEO’s enthusiasm run away with him or her, so they end up speaking on all the topics and taking all the questions. The strategy may be their baby but they need to let others hold it from time to time!
Good practices to consider…
The discussion needs to result in clear outcomes – boards are decision-making bodies after all. By the end of the day, there needs to be a consensus position which gives management direction on next steps. The Chair, CEO and Company Secretary should all be able to agree on what these are.
Things to avoid…
An exhilarating away day can end up being a damp squib if the consensus view is “interesting day but I’m not sure where it got us….”
Good practices to consider…
The away day is a chance for board members to spend informal time together in a different context. Dinners, and even a dreaded team-building exercise, can help cement relationships, which will be particularly important in future if the Board needs to pull together in response to a crisis.
Things to avoid…
Understandably, the Board doesn’t want to have too much of a good time – or incur too much expense – particularly if it’s a public-sector organisation. But getting away together is the Board’s chance to really focus on the big questions like where is this organisation going? and how will it get there? From experience, we would say that it’s well worth spending a bit of time and money to make sure your strategy day sets you up for a really profitable discussion of these important subjects.
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