Board Members: Think like smart investors

Past performance is no guarantee of future results.

What does it mean to serve in a governance role as a board member in the social sector during tumultuous times? What should you be listening for? Asking for?

We worked with a Colonel in the US Army — a cavalry officer — who had a good nose for hubris. He told us that when he had a soldier in his unit who was seen as a star, but “kept riding the horse he came in on,” he would make sure that soldier’s career got stalled. On the other hand, when he had a green recruit who demonstrated curiosity and humility; who was willing to try things and fall on his or her face, but get up and learn from them, he would fast track that person.

Being a star in the past — having a big win under your belt — is no guarantee of success in the future. It might just be a result of being in the right place at the right time with the right strategy. The big question is this: “What did you learn from that win and how will that inform what you do next?”

Especially in tumultuous times, foundations, nonprofits and their partners need to become skilled at honing their thinking by paying attention to their results — both their wins and their losses — and learning from them. That’s a far better guarantee of future success than having met a predetermined success metric. At a 2013 American Evaluation Association conference session co-hosted by 4QP and Tanya Beer on “Rethinking Accountability,” we made this proposal:

Accountability needs to shift from achieving predetermined results on a predetermined path to demonstrating the capacity to achieve results in dynamic environments. Evaluation needs to focus on both capturing results and surfacing the thinking that is producing them and how that thinking has evolved because…

…It is that quality of thinking through complex change that is most likely to generate similar results in the future.

The takeaway for board members: Governance requires knowing what to listen for and what to ask for.

As a board member, what should you listen for? First, whether an organization has a big success or a visibly disappointing result, it’s what the team says next that you should be paying attention to. We created a ‘script’ for people who had participated in an Emergent Learning conversation to use to relate what they learned to the people they report to. It goes like this: 

“The question we came together to talk about was [Framing Question]. We reflected on our experience so far. What we noticed that worked was [story of success]. What we learned from that is [insight] and what we plan to do going forward to take that lesson with us is [hypothesis]. What we noticed that didn’t work so well was [story of failure/disappointment]. What we learned from that is [insight] and what we plan to do going forward to take that lesson with us is [hypothesis]. We plan to apply those lessons in [upcoming opportunity/opportunities].” 

We would then coach these participants to go on to describe how they plan to test out those hypotheses and communicate their intention to come back and talk about what results they got and what else they learned.

When organizational leaders come to report to you in your board meetings, if they can express something like this about what they’ve learned from their work, it should give you confidence about their future success.

Smart investors invest in the curiosity and humility — the quality of thinking — of those they invest in. When senior staff come to you showcasing some great result — essentially saying, “trust us” based on past performance, or when your gut tells you that some underperforming initiative is getting sugar coated, that’s when the warning lights should go on.

What you ask next is also important. When things don’t seem to be going well or we aren’t given enough information to know one way or the other, it’s human nature to want to gain some control; to step in and micro-manage a situation. But as a board member of an organization trying to navigate choppy waters, micro-managing reduces the agency and flexibility of that organization to respond to the unknown. Adding burdensome reporting requirements may help you feel like you are doing your governance job, but may not do anything to help the organization learn and adjust. It might even be getting in the way.

Instead, train yourself to listen for that curiosity and humility that is a true indicator of a leadership team’s preparedness to tackle an unknowable future. Whether you are hearing about a success or a disappointment, ask: “What did you learn from those results? How will that inform what you do next?” 

As a board member, think like a smart investor. Because, in these times, the only real guarantee about the future is that it cannot be predicted three years or even one year in advance.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published.