Where should thought-leadership for strategy lie?

24/10/2012

The development of strategy and strategic decision-making have emerged as core themes in my doctoral research in recent weeks. Regular readers will know I am investigating the governance–performance relationship, in an effort to explain the impact boards have on company performance (because we currently don't know).

When one considers strategy and strategic decision-making, the question "Where should thought-leadership for strategy lie?" raises its head. One commonly-cited view is that the board should set vision and goals, management should develop strategy (for the board to approve), and then management should implement the approved strategy. Others say the board should drive everything and management should simply implement the board's wishes.

Forming a view on this question is central to my research. So, what do you think? I'd value contributions from anyone with a story to tell!

1 Comment

Kerry Topp

30/10/2012 23:43:56

Hi Peter, good question & great idea to research the link between company performance and the role of the Board - definitely be interested to see the results!

In my personal view, a common one I know, the board should set vision & goals, management should develop board-approved strategy, and then its up to the management team to execute on that strategy.

I would also say, and goes without saying, that it's not a "set and forget" for the board. Part of good governance is that the board should clearly be there to support and enable management where required and monitor progress against the strategic plan - but they also have a fiduciary duty to also ask those probing questions of the management team!

I would personally see a board not acting in the way outlined above as a sign that something dysfunctional may be going on and I would be exploring the level of "trust" and "empowerment" the management team actually has and also the understanding of respective roles and responsibilities of the board and management teams.

The best example I have of a high performing relationship between board and management - albeit in a lower-level operational/delivery management role - was, Air NZ. The CEO and Chairman particularly seemed to work exceptionally well together. If you look at the results during Rob Fyfe's tenure - culturally, financially (during some particularly tough global economic times), and customer service-wise - then this could be a good starting point for your research paper.

Simply world-class performance worth capturing, bottling and repeating in my view!

Hope this helps and best of luck with the research paper, sounds very very interesting!

Where should thought-leadership for strategy lie?

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Peter Crow PhD CMInstD