Though only relatively small cooperative health insurer, the Health Service Welfare Society (HSWS) had big plans. We recently transformed ourselves from offering health insurance to doctors, nurses and other health workers to opening up membership to the public. Through our new Accuro brand we introduced range of innovative health insurance policies that focus on prevention, on rewarding people for being healthy, and that offer strong value proposition.
As relatively small organisation, implementing the radical changes while keeping the business functioning was always going to be big task. But I realised that within our seven-member board was wealth of business expertise I could tap into. The board became an important ingredient in our recipe for success.
The Accuro board acted very quickly and in less than 12 months everything was changed: the brand, the strategy, the product range and organisational infrastructure. From this experience I have formulated 10 tips harnessing the potential of the board to create more effective change. I believe both executives and directors can learn from these.
1. Create sense of urgency
Success can breed complacency and the history of business is littered with complacent companies that missed the next big trend and had their business engine run out of steam. IBM, the market-leading mainframe computer manufacturer, missed the move to PCs. Xerox, the dominant photocopier company, lost the lucrative small copier market to its smaller rival Canon. Nike missed the trend to women’s trainers and Reebok swooped. There are countless examples.
HSWS (now Accuro) had been around for 36 years. In that time the organisation carved out niche for itself as health insurer. We could have gone on like this, perhaps for another 10 years or so, and then perhaps hit brick wall.
To prosper in changing times one has to move quickly and this is hard if the organisation is in comfortable position. The answer is to create sense of urgency, but in doing so you can’t overdo it. As CEO, you can’t say the business is in bad shape if it isn’t. But you need to keep focused on how things can be better, what challenges the future holds and how to best meet those challenges. An approach we use is to look back at how things have changed over the past 10-15 years and then look ahead to how different things could be in another 15 years.
2. Create passion
It’s easy to reduce business to numbers; turnover, margins and costs. But to be successful you need to create sense of passion throughout the business, starting with the board. It’s the role of the CEO to ignite that passion. In Accuro’s case this passion flows from our vision to be “the health insurer of choice”. That’s an ambitious goal for relatively small organisation but it’s goal that stretches us and our thinking. At Accuro we realise that to chase our dream we have to do something different, so the vision flows through to how we think and act. Because the board gets “infected” by the vision, the directors are highly engaged in the business. Within the boardroom, and outside of it, they often come up with ideas, suggestions or contacts. The directors become creative force within the business.
3. Capture the passion and urgency in the strategic plan
Passion alone will soon burn itself out. Passion needs to be sustained by success, which flows from having clear plan. The strategic plan is where the organisation needs to capture the vision and the mechanics of how it will translate its passion into effective action.
Involving the board in developing the strategic plan means that both the board and CEO have vested interest in making the plan work. And it leads to better plan. Directors, especially those with business strategy expertise, add considerable value.
To ensure that the strategic plan is an effective blueprint for action it needs to be short and simple. Accuro’s strategic plan is only five pages. The objectives, timelines, KPIs and critical success factors are spelled out clearly, so we all know where we are heading.
As well as setting clear direction for the organisation, good plan also helps define the responsibilities of management and the board, ensuring clarity about where management stops and governance starts.
Regular reviews of the plan also keep the board and management future focused.
4. Focus on the future
It’s much easier to talk about the past and present than to deal with the uncertainties of the future. But if the business is to prosper it needs to anticipate inevitable change. Our approach at Accuro is: “It’s not about what we are today but what we could be tomorrow.”
We constantly review market trends to look for opportunities to do things differently, or how we can take advantage of changes in the industry. Our board meeting agenda includes “leadership section” – that is prompt to ignite discussion about the opportunities for innovation because in Accuro’s view the “opportunity share” for our business (where we could be) is in the long run more important that our current “market share”.
5. Research and communicate
Comprehensive business research reports and analysis backed up, when appropriate, by external consultants’ advice is obviously critical in making the board comfortable when approving radical changes or making decisions. It’s helpful though, when reports are summarised and communicated in plain English, without unnecessary jargon. “Soft data” such as anecdotal feedback from members is also important. The CEO should really know what members/customers think about the organisation. The best way to gather such information is to make an effort to randomly talk to members. At Accuro the directors are also strongly encouraged to directly talk to members and understand their viewpoints because they represent members’ interests around the board table.
6. Create challenger board culture
A smaller organisation has an ability to approach business as ‘challenger’ brand and to encourage the board to bring this ‘challenger’ attitude to its work. Board members are “informed outsiders” who know enough about the business to ask the right questions from non-management perspective. The board should not be shy in challenging the CEO’s ideas and assumptions and to encourage the CEO to think radically about effective solutions. At the same time directors must be prepared to be challenged so that the best decisions are made. While it is tempting sometimes to think life would be easier if the board always agreed with the CEO, Accuro’s experience is that robust review from informed peers invariably leads to better results.
7. It’s about more than just the board meetings
At Accuro the board meetings are like medical check-up; they are an important routine. However, board meetings are only small part of working effectively with directors. What happens outside the meetings can be much more useful. If the CEO is successful in creating passion around the board table and “infecting” directors with the vision, the directors genuinely want to be involved. At Accuro we don’t wait for board meetings to raise issues or to get an opinion from the directors. On our board we have number of experienced professionals who work in the health, insurance, consulting or PR sectors. Catching up with them for coffee to tap their knowledge and networks is an important part of our success.
Some CEOs may fear that their board will “meddle” in day-to-day management if they work too closely with directors. But if the CEO is very clear about what is external activity and what are internal management responsibilities, this will not become an issue.
8. Work closely with the chairperson
A good relationship with the board is vital but the key relationship within that is with the chairperson. While in one sense the CEO “reports” to the chairperson, the relationship is likely to be more productive if you see the chairperson as someone who also has an important role in the leade
