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Here’s a scenario that might sound familiar: You’re sitting in yet another board strategic planning meeting, drowning in operational updates and quarterly reports, while that big-picture strategy discussion gets pushed to “next time.” Sounds about right?
According to Harvard Business Review, 70% of directors want to dedicate more time to strategy, but somehow it never happens. Why? Often, strategy discussions get overshadowed by day-to-day operations, missing crucial opportunities to shape the company’s future. It’s like spending all your time putting out fires while your competitors are building fireproof houses.
In Chapter 2 of our Board Playbook, we cover how the board and the executive management can effectively collaborate to create the right strategic plan and budget for the business. We will not cover models for board strategic planning here – there are many. Probably the most practical ones are the W Model and Michael Porter’s activity systems models.
The Roles Dance: Who Does What in Board Strategic Planning?
Think of board strategic planning as a carefully choreographed dance between the board and management. The founders set the stage by defining the mission and value. Then, management and the board step in together, translating this vision into concrete goals. Management builds the strategic plan, while employees bring it to life through execution. The board’s role is to oversee the entire performance, ensuring every move creates value.
Early Goal Setting: Setting the Stage
The first conversation on strategy happens early in the annual board schedule. By Q2’s end, there should be a high-level agreement on next year’s growth objectives. These typically include key metrics and priorities such as revenue growth, gross margin, EBITDA, cash flow from operations, expansion into new markets, product launches, or building new functions.
While there are different approaches to goal-setting conversations – whether the board leads, management proposes, or it’s a collaborative effort – our experience shows that co-creation leads to better engagement and outcomes.
1️⃣ The board discusses growth expectations in camera without sharing these with management, developing key questions to guide management in creating their first strategy iteration.
2️⃣ The board then briefs executive management on these key questions, setting expectations for the initial take on strategy and timeline.
Initial Strategy Discussion
At the next board session, executive management will present their strategic vision, after the board directors have read it as a pre-read. This is one of those moments when having a presentation and discussion is a very good idea. When management presents their strategic vision, crucial questions emerge like: “Why does our company exist?”, “How do we plan to reach our goals?” and “How does our strategy consider industry trends and competition?” The session requires skilled facilitation from the chair or lead director to drive rich discussion and clear conclusions. If consensus isn’t reached, it’s better to sleep on it and schedule another final discussion. Once the strategic direction is set, executive management expands the conversation to include key team members, developing detailed initiatives that outline approach, projects, timelines, business impact, resources, and risks. It is a good practice to document what was intentionally not pursued, as this often leads to valuable board discussions.
⭐ Good practice:
If possible, organizing a one-day strategic retreat with board and key executive management is considered best practice. This is where vision meets reality – examining key capabilities, business models, customer value delivery, and implementation requirements. The focus stays on ensuring every strategic initiative has a clear path to execution.
Budget Time: Making It Real
The final step in the annual planning exercise is preparing and approving the budget, ideally before the start of the new financial year. While circumstances may sometimes require a budget review, this should be a last resort. The budget discussion typically goes through several iterations in Q4’s last two months. For effective planning, schedule a dedicated board meeting in Q4’s second half, share budget documents 3-4 days ahead with accessible formulas to understand drivers and correlations. Strategy without resources is just a dream. The budget process turns plans into reality through:
🎯 Clear financial comparisons and assumptions
🎯 Customer metrics that matter
🎯 Smart resource allocation decisions
🎯 Complete financial projections
Any necessary changes after board deliberation can be handled offline to maintain momentum.
⭐ Good practice:
It’s important to remember that board strategic planning isn’t a once-a-year exercise. It becomes part of a company’s DNA by dedicating an hour each board meeting to strategic discussions. Simple one-page updates help track progress on initiatives and stay alert to market changes.
When Plans Meet Reality
Consider this real case: A company faced delays when trying to find product-market fit (unheard of, right?!), leading management to rebuild their budget with a 12-month runway. The board, while believing in the strategy, questioned the timeline as it relied on too many stars aligning. Founders are optimistic by nature, but the board’s duty is to draw from past experiences and question assumptions. The board expected 6 more months of runway. Those 6 months would
provide some buffer to allow for things going unexpectedly wrong. Though initially challenging to accept, management later returned convinced of the need to control their destiny through cash management, ultimately finding ways to extend the runway as suggested by the board.
Making Strategic Planning Work
The journey from strategy to execution is one of the most critical paths in a company’s growth. Success comes from the partnership between management and board, each playing their distinct yet complementary roles. Through regular strategic discussions, openness to course corrections, and rigorous execution oversight, companies can turn strategic visions into market realities. After all, great strategy isn’t just about making plans – it’s about bringing them to life through disciplined execution, clear accountability, and the courage to adapt when needed.
When boards and management teams get this dance right, they create organizations that don’t just survive but thrive in an ever-changing business landscape.
Stay tuned for our next article! It might or might not have to do with Board and CEO Succession. Also, if you missed the first chapter on Understanding Board Responsibilities and Governance, you can read it here.
