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Getting the most from strategy retreats

By James Beck

Strategic development is a joint board-management responsibility. It is the key stage of the strategy process where the board and senior management team work together to develop the organisation’s strategy. At this stage, the attention is on the top-level strategy; the overall corporate strategy and, depending on the size of the organisation, the business strategies of the major divisions.

It is now common for the board and management team go off-site for a board retreat to discuss the current strategy in detail. If the strategy is working and is well understood by both directors and managers, this stage might involve nothing more than an annual review of progress, discussion of changes in the strategic landscape and a reaffirmation of the core strategies. On the other hand, if current results are poor or if major changes are forecast for the external environment, a far more searching review and re-evaluation of strategy might be required. This may take a longer than one retreat and may require a number of follow-up workshops.

The advantage of the retreat is that by isolating the board from regular distractions and spending a significant time delving into the organisation’s strategy, the quality of any decisions is likely to be enhanced. A strategy retreat also provides an ideal opportunity for team building and encourages active participation from all board members. It is also a major opportunity for discussion and development of shared views about strategy both among directors and between the board and senior management.

The decision to hold a retreat is an important one, because it represents a significant time commitment for board members and in many cases management. Retreats commonly occur over one or two days, generally on a weekend. If directors are to spend this much time dedicated to strategic issues, it is important to plan the weekend to ensure that optimal results are obtained.

The importance of planning

But strategy retreats do not always live up to their potential and can fail to meet the board’s objectives without proper planning and commitment from both the board and management. From personal experience, boards that are not engaged in the planning and committed to the process can very easily derail a board retreat. For example, it is not productive to have three directors delay the start of the afternoon session by an hour on the first day of a retreat because they were unhappy with the lunch menu approved by the CEO without board input and demanded alternate meals be prepared for them.

As such, planning should include:

  • Date – it should be in the board’s calendar at the earliest opportunity, as having all directors attend can be vital to the acceptance of the decisions made during the retreat;
  • Objective(s) – this will depend on whether it is it an annual strategy retreat to develop a new strategic plan, review the current strategic plan or in response to a major change in the organisation’s environment, e.g. funding cuts, loss of a major customer;
  • Duration – this will depend on the objectives;
  • Budget for the retreat – this will influence many of the other decisions;
  • Responsibility – allocate responsibilities, e.g. organising bookings, preparing discussion papers or presentations;
  • Attendees – will it be the board only or the board and management? Are spouses invited?
  • Facilitator – an external facilitator can often help to keep the agenda on track; ensure all attendees are given a chance to participate; and deal constructively with any conflict that arises without becoming emotionally involved;
  • Location:
    • Meeting facilities – size of the room (it should allow participants to spread out for group work), whiteboards, projector, internet access, printing, photocopying, etc.;
    • Accommodation;
    • Catering; and
    • Recreational activities;
  • Data – what input/information is required from directors and managers prior to the meeting?

As noted above, I have witnessed a number of board retreats go awry for a variety of reasons. Too much to drink at the previous evening’s dinner or during lunch can see directors or senior managers falling asleep or obviously intoxicated during a session. Lower level managers may be reluctant or not interested in participating because they have not had previous exposure to the board and have no idea what they are doing there. Directors being rude to the managers present or each other. Just as in regular board meetings, clear ground rules about what is expected for the retreat in terms of behaviour and participation is a good start, so too is gaining buy-in from the attendees to the outcomes of the retreat so that it adds value to the organisation rather than draining its resources, which are often scarce in the case of not-for-profits.

To ensure that optimal results are obtained. Board retreats are most effective if the following steps are followed:

  • Before the retreat – management should collate and develop materials such as competitor analyses for discussion well in advance of the retreat, while both directors and managers should do pre-work (see below for the benefits of pre-work).
  • Conduct targeted analysis prior to the workshop, and then develop a clear agenda focused on achieving specific outcomes and resolutions in key decision areas.
  • During the retreat – management presentations at the retreat should be concise and factual. The objective of the retreat is to stimulate discussion of strategic issues, not to spend your time listening to lengthy presentations by managers or invited guest presenters. A note taker should be appointed to capture agreement succinctly.
  • After the retreat – management will incorporate the decisions made at the retreat into strategic options, detailed objectives and strategies for board review and approval. This will then be followed by the annual implementation plan and budget.

For those organisations without the time or resources to conduct a retreat, there are other options. For example, a review of the board’s strategic plan can be included as part of the yearly board agenda, and has the added advantage of regularly concentrating the board on strategic issues. Another option for the board is to hold a number of special board meetings to review particular strategic issues. As part of this process, the board may wish to consider a one-day facilitated session with senior management to consolidate previous board discussions and decisions to guide management.

The benefits of pre-work

A common issue boards have with strategy retreats is that very little in terms of strategic planning comes out of them. So much time is spent rehashing the mission, vision and values or conducting a SWOT analyses that the actual strategies to accomplish the organisation’s mission are left to management after the retreat. As such, when preparing for a strategy retreat it is important to consider what components of the process can be conducted prior to the retreat.

Pre-work, when effectively designed and implemented, can nurture the learning process so that participants can engage in the development of strategy (see further Box 1 below). For a board, it is easier to achieve an outcome from strategic planning at the retreat when the pre-work has been done beforehand. This can done through surveys or interviews of participants. I find that sending out a questionnaire to each participant to complete is particularly effective, since the collated results will highlight what areas there is agreement on and where the participants should be focusing their attention at the retreat. A typical pre-work survey will cover:

  • Objectives for the strategy retreat;
  • Mission, vision, values and goals – are they still valid, what refinements are needed;
  • SWOT analysis;
  • Environmental analysis;
  • Key issues; and
  • Key initiatives – for the next 12 months; the next 3 years.

Box 1: The benefits of pre-work

The benefits of pre-work include:

 

  • Sets the ‘climate for strategic change’ within the organisation;
  • Establishes a ‘strategy mindset’ for participants prior to attending the workshop. They are now ‘ready to learn, listen, contribute and participate’ – after all, they are the ones who have to make it work;
  • Frees up the retreat for discussion;
  • Saves time – reduces the threat of ‘time-pressure’ facilitation;
  • Enables facilitators to present the ‘group view’ or ‘invisible group consensus’, rather than their own views;
  • Participants are more likely to respond openly in pre-work than in front of their peers;
  • Identifies topics for debate.

 

Compiling a databook

To get the most from a strategy retreat, the board must ensure there is a real understanding and agreement as to the major issues facing the organisation that is based on facts. As noted above, a solid understanding of the organisation’s strategic landscape comes from gathering relevant data and allowing directors and senior managers to consider and discuss this data using a sound framework. I always recommend compiling a databook that includes the results of the survey (collated and themed) and the information developed by management. For example:

  • External data
    • Industry trends
    • Competitor analysis
    • Market trends
  • Internal data
    • Current strategy and goals
    • Financial
    • Operational
    • Markets

The data book will be used in conjunction with this workbook to guide the discussion throughout the retreat. The databook should be circulated to directors at least seven days before the retreat to give them time to prepare.

Incorporating risk into the strategy retreat

Risk and strategy are totally interrelated. Consequently, any discussion or decision by the board concerning strategy also involves a discussion of risk. The challenge for boards and management teams is to integrate these two essential roles of the board. For example, considerations of alternative strategies should use the organisations approved risk approach as one technique for analysing these strategy alternatives. Workshops or retreats devoted to risk can be conducted in tandem with a strategy retreat, but at the very least the major strategic risks to the organisation should be considered.

Conclusion

Holding a successful strategy retreat can be a key factor in the achievement of an organisation’s strategic objectives. As discussed, the preparation for the retreat will be the difference between a retreat that achieves little in the way of genuine strategic planning and one that provides a solid basis for management to formulate the detailed strategic, business and implementation plans, and budgets that the board will be asked to approve.