Board of Directors Responsibilities

Posted on November 5, 2013 by andrewl

By Andrew Leach, MBA

Many Aboriginal communities and organizations create a Board of Directors to govern their work. In this article, I describe the five most important responsibilities for Boards, based on research and my frontline experience with Aboriginal Boards.

Responsibility #1: Clearly Understand Your Purpose

First and foremost, Boards need a clear purpose to give the organization focus and direction. Without a clear purpose, Boards tend to wander.

Unfortunately, we’ve all seen weak mission statements that are merely a string of various ideas. Instead, determine your organization’s reason for being to produce a strong mission statement. Develop your mission statement to answer the question “Why are we here?” and use skilled editing. Don’t be hesitant to update the mission statement, if changes in your mandate warrant it.

Responsibility #2: Hire the Best

Board work can be very rewarding if you have the right people working for you. But not having the right talent, especially at the top, will make Board work very cumbersome. Keep in mind the Board’s selection of a senior manager is probably the most important decision it will make.

Find someone with a track record of executing organizational plans. Don’t get too caught up in someone’s academic background. Having a degree doesn’t mean someone can lead, manage or execute; some people are good at school but not managing.

Responsibility #3: Develop Short-term Goals

After you’ve hired your talent, stay focused on your mission (see #1, above). Develop short-term goals to achieve your purpose. Ask yourselves, “What do we want to accomplish this year?”

A one-year plan should detail specific tasks you want accomplished, and identify people to carry out tasks and achieve implementation within timelines. The Board can also use this plan to monitor the senior manager’s activities and performance.

Your short-term objectives should align with your long-term strategy. This statement may seem obvious. But many organizations start out in one direction and end up heading in another. One reason is that some organizations go after government funding that is not exactly “up their alley.” As a result, these groups can end up serving funding agents more than their own mission.

Responsibility #4: Monitor Progress

If you have hired people to carry out your work, you need to ensure they are heading in the right direction. The best way to monitor progress is by having a clear, constructive relationship with your senior manager.

Also hold regular Board meetings to chart your progress, and ensure Board meetings are properly structured to ensure everyone’s time is well spent.

Responsibility #5: Assess Your Own Performance

Finally, Boards need to evaluate their own performance. This step is critical to review and correct course wherever necessary. These evaluations are often done during retreats or weekend meetings. It may be beneficial to have an outsider facilitate such a session.

Other evaluations are more comprehensive and may entail site visits, personal interviews, and reviewing financial statements or other reports. Like the retreats, organizational reviews may require the assistance of outside support.

Summary

Undoubtedly, Boards do more than the steps outlined above. Nevertheless, these steps are crucial and should take up the bulk of a Board’s time and resources.

These guidelines can also be used for other governing entities, such as elected councils. However, rather than a mission, a Frist Nations Council should develop a mandate for the duration of its term.

The bottom line is that governing entities should have a solid sense of where they are, where they want to go, and how they are going to get there.

Andrew Leach is from the St’at’imc Nation (Lillooet, BC) and has a Master’s degree in Business Administration (MBA). He also operates a successful management consulting business (www.andrewleach.com), and welcomes feedback to his articles. Email or call him at 604.868.4004.

5 Important Responsibilities of Chief and Council

Posted on October 22, 2013 by andrewl

By Andrew Leach, MBA

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To help First Nations strengthen their leadership and operations, I describe the five most important responsibilities of a Chief and Council in this article, based on research and my work with more than a hundred First Nations Councils.

Responsibility #1: Set Concrete Goals

An unfocused First Nations Council makes poorly informed and costly decisions. So get focused early on in your mandate.

To stay focused, new councils must develop a plan with clear, specific goals, and with input from senior management. Your plan should outline what will be accomplished during specific time frames (i.e. one to five years). Usually, your senior manager will be responsible for executing and reporting progress on the plan.

Responsibility #2: Organize Yourselves

Some First Nations councils are comprised solely of volunteers, others have paid staff positions, and some have the Chief as the only paid council position. In addition, many councils use a portfolio system.

All of these approaches are examples of how council can organize itself. Each approach has strengths and weaknesses. Regardless of the approach used, your community should get good value for council costs.

The bottom line is to structure council so resources are used effectively. One way is to develop a detailed Leadership Policy Manual to govern all council activities.

Responsibility #3: Hire Excellent Managers

Good planning can go only so far. Ultimately, you also need good people to execute your plans. Hiring the right people is one of the most important decisions a council makes. Indeed, you cannot afford to choose second-best employees for key positions. Top-notch employees may cost more but will be worth the investment in the long run.

Responsibility #4: Hold Productive Meetings

One of the most common complaints I hear about is long, unproductive council meetings, with people playing a variety of roles: endless talker, complainer, bully and/or emotional wreck.

Well organized council meetings require a strong but respectful chairperson and a structured approach to agenda development and decision making.

In short, make an agenda, have participatory input into discussions, decide on an action, then make it so.

Responsibility #5: Assess Your Performance

Finally, council should objectively evaluate its own performance. Council self-assessments provide an opportunity to review and make adjustments wherever necessary. Often these evaluations are done during retreats or similar meetings; using an external facilitator can help ensure these forums are constructive and productive.

Summary

Undoubtedly, First Nations councils undertake more responsibilities than described in this article, but these five are critical. If you perform these tasks well, you’re ahead of the pack.

Andrew Leach is from the St’at’imc Nation (Lillooet, BC) and has a Master’s degree in Business Administration (MBA). He also operates a successful management consulting business (www.andrewleach.com), and welcomes feedback to his articles. Email or call him at 604.868.4004.

The Difference Between Leading and Managing

Posted on October 1, 2013 by andrewl

By Andrew Leach, MBA

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Some people may think managing and leading are the same things. They are not! This article will explore the main difference between leadership and management, and discuss relevant implications for First Nations organizations.

The primary difference between a leader and a manager is that one is expected to create change while the other is expected to maintain the status quo.

In particular, a leader’s role is essentially about initiating change. Furthermore, people can lead in many ways. For example, there are autocratic leaders, who want a firm hand in how things will change. Then there are democratic leaders, who like to get everyone involved in the change process.

Research shows that effective leaders rely upon more than one leadership style, depending on the circumstances. For example, they’ll be autocratic in one situation and democratic in another. Extraordinary leaders have an almost instinctive knack for selecting the right leadership style with the right circumstance.

Are you a good leader? To answer this question, ask yourself this: Do you lead largely with one leadership style? Or are you skilled at using different styles for different people and different situations?

The primary role of a manager is to carry out organizational plans, while adhering to company policies and procedures. Good managers understand and appreciate planning concepts. They can also develop and execute company policies and procedures.

Ideally, a manager has a combination of both hard and soft skills. Hard skills include being able to crunch numbers and quickly gather, process and interpret lots of information. Soft skills include communication and social skills.

Are you a good manager? To answer this question, ask yourself this: Are you skilled at gathering and processing both the financial and non-financial information within your organization? Are you able to communicate your thoughts, orally and in writing, to a wide range of people, including superiors, subordinates, customers and suppliers?

Given these definitions, it’s clear organizations need both good leaders and managers to reach their goals. Your leaders will help define where you are heading, and your managers will make sure you get there.

It is important for First Nations organizations to know the fundamental difference between leading and managing. Indeed, there are many stories illustrating the struggles that arise when people fail to differentiate between these two roles. For example, many newly elected leaders struggle with the Band-management part of their duties. Also, many good First Nations administrators have had difficulty creating change within their organizations.

In an ideal world, your leaders can manage and your managers can lead. If that is not your situation, you need to do several things. First, never assume your leaders can perform the hard skills of management, such as financial statement analysis. Conversely, don’t assume your most senior manager is the most capable of creating change within your organization or community.

Second, consider cross-training your managers and/or leaders. Specifically, train your managers to lead and your leaders to manage. As a side note, also recognize there are limitations to training; it won’t solve issues overnight. Often, a combination of training and practical experience is the best approach to developing either leadership or management skills.

Finally, we need to acknowledge that some people have a knack for one skill, but are fundamentally weak in the other. If this is the case in your community, put people where they are most capable. Above all, don’t give an important leadership or management task to someone who is incapable of completing it.

In summary, managing and leading are very different tasks. Ideally your community will have a healthy pool of both skills to draw from. If not, make sure your managers and leaders develop the skills needed to do their jobs. In the meantime, don’t make the mistake of giving the wrong task to the wrong person, simply because of a person’s position or title.

First Nations Shouldn’t Run Mom & Pop Businesses

Posted on August 20, 2013 by andrewl

By Andrew Leach, MBA

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As a management consultant, I have seen too many First Nations lose money trying to run mom and pop businesses. In this article, I will present some key ideas for Bands to develop and execute a viable economic development strategy. And the process starts with this: stop running those mom and pop businesses!

Mom and pop businesses are typically owned and operated by an individual or couple. Their main features are:

Small revenue base, usually less than $200,000/year
Small staff, usually less than four employees
Long hours required to develop and sustain

Small convenience stores, retail outlets and small motels are classic mom and pop businesses.

Bands should not run mom and pop businesses. For starters, why waste your time on small returns when opportunities to make serious money are available in your area?

As well, you’ll have to pay whoever you hire to manage your mom and pop business the 14-18 hours a day needed to establish and grow the business. Moreover, mom and pop managers will not treat the business like their own, because it isn’t. For instance, purchasing and human resource decisions can be very costly. And if the business isn’t yours, what motivates you make the best decision?

Thus, Bands owning mom and pops contradict the small business model of owners working long, unpaid hours and acting in their own best interest. First Nations often pay lots of wages for the mom and pop businesses they own. Look at the financial statements for yours. Where are all the expenses? Are they controllable?

I have seen too many Bands lose their shirts sinking money into fledging moms and pops. Sometimes they end up using their AANDC operating dollars to fund the operations. It’s not long afterwards that remedial management kicks in.

Another interesting phenomenon is the emotional attachment some Bands have to their mom and pop businesses. Even when it becomes clear the business is running them into the ground, some leaders are reluctant to let go. I hear comments like, “It provides us with employment.” “We are counting on things to turn around.” But that’s denial. The writing is on the wall and we often do not want to read it.

There has to be a better way.

For starters, First Nations need to develop a sound business strategy that matches its strengths and weaknesses with the regional economy’s strengths and weaknesses. In addition, Bands should go after only those businesses that can justify hiring a full-time manager and still have enough left over for some profit to the Band.

As a rule, if your Band business has less than $300,000 total investment, it may be too small to run effectively as a Band-controlled entity. You should probably turn these smaller businesses over to Band members. Let them run these businesses for themselves. Like the way they should be―as moms and pops.

Instead, focus your energies on bigger, profitable projects.

Band-based tourist projects can do well, but be careful: a lot of tourist projects should be run as moms and pops. I have worked with many First Nations that have done quite well in the resource sectors, and some construction projects can be profitable too.

Andrew Leach is from the St’at’imc Nation (Lillooet, BC) and has a Master’s degree in Business Administration (MBA). He also operates a successful management consulting business (www.andrewleach.com), and welcomes feedback to his articles. Email or call him at 604.868.4004.