Organizations that excel over long periods of time typically have been able to sustain strong leadership over a relatively long period of time. They have good governing bodies and effective chief executives, and they aspire to become something better than they are. They are constantly learning, building on their experiences, developing their people, and improving their results. For them, “good enough” never is. The most effective boards and the most effective executives go hand in hand. You won’t find one without the other for very long. Unfortunately, the converse is also true. The perpetually troubled organizations have neither effective boards nor effective executives.
While the public, for-profit, and not-for-profit sectors differ in some significant ways, I believe there are some characteristics of good organizational leadership that are applicable regardless of the sector. These include:
Good Governance– the role of the board of directors or other official governing body.
- In any institution that excels, there will be a framework of values and principles that foster a culture of achievement and adherence to high ethical standards – that tend to bring out the best in people, discourage negative behaviors, and improve the ability of people to work well with each other. An effective governing body will ensure that such a framework exists and will also ensure that structures and mechanisms are in place to help people develop and utilize their potential as fully as possible to optimize the organization’s performance in furtherance of its mission.
- In addition to performing the governance functions required by law or dictated by best practices, the best boards focus more on the long range and strategic than on the short term and tactical. They are concerned more with matters of paramount importance than with the ordinary and with policy rather than operational procedures.
- A good board generally has some responsibility for the allocation of resources – primarily through the budgeting process and review of large expenditures that fall outside the approved budgets or that would create significant long term obligations. The board will also monitor key metrics and have a mechanism for reviewing how well management is doing its job.
- It is the job of the CEO and other paid leaders to translate goals into action and make resources productive.
High Aspirations (Vision) – in many cases articulated primarily by the CEO, the aspirations must be embraced at all levels throughout the organization.
- An organization that has a good board and good management will also have high aspirations for what the organization strives to accomplish over time. To be meaningful, however, those aspirations must be translated into actionable goals toward which the organization’s resources can be aligned.
The need for these three elements – good governance, good management, and high aspirations – applies at every level and in every sector of society – in companies, not-for-profit organizations, schools, communities, states, and countries. Unfortunately, in too many places, these elements are conspicuous by their absence.