Developing a strategic perspective in the boardroom: rethinking the role of the agenda.

• Author: Bordeaux, Greg

The future of any business is never assured. Aggressive competitors, changing markets and slow or overly cautious responses can all lead to organizational failure. Numerous observers are now sounding this warning to the electric utility industry. We know that threats are emerging from all sides:

* From industrial customers who can self-generate or seek other suppliers

* From regulators who want increased competition in the energy marketplace

* From environmentally conscious consumers who will continue to raise questions about the impacts of power generation on the environment and about the possible health risks associated with transmission and distribution

* From other utilities and municipalities seeking to expand their service territories or to acquire us outright

There is growing consensus that these threats represent not a temporary obstacle to be overcome, but a permanent feature of the rural electric landscape. In this environment, our survival must be based on our ability to respond quickly. As generally smaller utilities, our competitive advantage lies in being nimble, and this requires learning about and responding to new issues as they arise.

We are writing to suggest a new approach to assist boards in achieving this goal. This approach requires rethinking the board agenda. Traditionally, the agenda has consisted of the sequence of items discussed or decided at each board meeting. Most rural electric boards meet monthly, and most meetings tend to include the same items: the manager's report, reports from the statewide and G&T representatives, outage or operational reports, a safety report, a review of unusual or large purchases, and an extensive review of the Form 7, Financial and Statistical Report. In general, the typical board meeting focuses on internal and operational issues that happen each month.

The weakness of this approach is that strategic issues are not addressed. As management expert Peter Drucker has said: "The board is the place where short-term and long-term imperatives must clash--and boards usually focus on the short-term. The only survival is for the general manager to be proactive--to take the initiative in thinking through the role of the board."

As Drucker implies, long-term strategic issues cannot be effectively discussed and explored when numerous other issues are also on the agenda. A true strategic discussion requires an intense allocation of time and effort. Further, there is an innate human bias to deal...