Strategy, culture and the board – the role of the NED
Whether you agree that we operate in a time of unprecedented change or not, what is consistent is that things do not stand still. They do not remain. What is clear is that the digital revolution has had a large impact on the way we do work and communicate, interact, solve problems and think about the future.
There was a time when strategy was purely an executive board member consideration. This is no longer the case with more and more being expected of non-executive board members, particularly the longer term success of the businesses they represent. Business strategy should be a key consideration for any NED.
When thinking about strategy it is important that it is grounded by the external context. Those changes that happen outside of our control (external environment) influence how we respond at a business level. These factors should be of interest to all Board members and especially NEDS who are uniquely placed to ask those difficult to answer, challenging questions.
External factors influence internal strategic decision making (e.g. political, China/US/EU, social, public interest, media, financial, Brexit etc.) and for a business to have a strategic advantage the board must be ready to act as quickly as possible. Scenario planning is a powerful tool in helping to consider the unknown and explore potential outcomes. This should be a regular consideration of any board and should be of primary interest to a NED.
Having a clear vision of what success looks like helps you to plan for the future. As a NED you should be looking to ask the important strategic questions such as:
- Do you want to grow?
- If you do, what strategies will you use?
- How well prepared are you for growth?
- What might impact these growth strategies?
- How much risk are you prepared to take? What are you prepared to give up?
These questions are vital to a board and are of key interest to main stakeholders. By asking strategic questions as a NED you can challenge the board. It goes without saying that maintaining independence is crucial, and by adopting a strategic mind-set, this independent oversight will prove invaluable in helping any board look to the future.
A strong, simple strategic framework is a game changer in ensuring that you achieve future success. It enables everyone to be in the boat rowing in the same direction. When you hit a storm, you are more likely to survive when you work together as a team with a common purpose and goal. Your strategy provides the route map you take to get to your destination. BDO’s strategy story has been one of success in the last 3 years. In having a strategy we have been focussed on our course, have succeeded in our chosen markets and have strengthened our brand and employment proposition. We have also benefitted from strong profits of over 10% year on year in the last 3 years.
Communication and engagement is the glue that binds a strategic framework together. That is certainly the case at BDO. It helps our people and partners make sense of our story — why we do what we do, who we are and how we do things.
Strategic advantage is created when you open your mind to future opportunities; you take change and disruption and turn it into an opportunity. As a NED your role is crucial to holding a board to account by asking those challenging questions and remaining independent enough to think clearly with a long-term vision.
Zoe Bailey, BDO Chief Strategy Officer and NED at Nelson Croom.