Sunday, July 02, 2006

Board Meeting Management

Start-up boards typically meet once a month. The market, product, competition, customers, team, etc are moving and changing quickly and frequent board meetings to discuss resource allocation, trade-offs, strategy, financial position, etc are critical.

Too often, however, I find board meetings are a status update. The frenetic pace of start-up life often leaves a CEO incapable of doing more than simply report state - cash position, sales pipeline, product development, customers.... The cliche about the forest and trees is apt to describe the board meeting where problems are simply listed independent of an incremental layer of analysis and insight that provides pro forma scenario analysis with respect to the tradeoffs at hand and a declarative management team strawman.

Great board meetings not only provide a succint update on the condition of the business but lay out in clear detail the challenges at hand and the optimal remedies. Scenario analysis help the board understand the trade-offs being considered (ie hiring more reps to serve demand or other decisions that involve accelerating/delaying spending given current opportunities) and their impact on pro forma cash, revenue, and expenses. Importantly, by demonstrating to the board the CEO and team are aware of the challenges, modeled various remedies, and have a strawman on the table for the best path forward the board is left with a sense of the thoughtful, competent process the team has in place for choosing the best path forward. Confidence soars.

Independent of a strawman and answers to the financial implications of the decisions that need to be made, the board may lose confidence in the team's ability to thoughtfully manage the company and, I have seen too often, the board feels it needs to micro-manage and fill the vacuum left by managers who fail to see the forest for the trees and put forward trailing facts rather than prospective strategy for consideration.

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