It’s Time to Take OE Monitoring Seriously!

downloadpdfLet’s begin with a sincere acknowledgment that some CEOs and senior staff members work very diligently to produce quality Results and Operational Expectations monitoring reports for the Board’s use in judging the effectiveness of the organization. Many of those reports we have reviewed over the years are excellent—some approaching exemplary in quality. The strong effort and personal integrity those staff members devoted to the task was evident.

On the other hand, high-quality monitoring reports are not the norm. Far from it. The norm, unfortunately, seems to be a race to get the report off someone’s desk as quickly as possible so the “real” work can begin.

We review a large number of monitoring reports as part of our continuing support service offered to both boards and their senior staff. Within the first 30 seconds of reviewing a report, it becomes evident whether the person who prepared it took the task seriously, or whether the report represents nothing more than an occupational hazard that had to be cleared—because the board required it. Otherwise, the report never would have been developed—and the organizational area being monitored never would have been examined.

The added tragedy is that many boards will accept that substandard work just to avoid requiring its busy staff to repeat it. That lack of board performance reinforces the lack of staff performance, and thus there is no reason for the staff to do anything differently or better. And the cycle continues.

So, Just What is Poor Quality Reporting?

Just what makes some reports “good,” and others not so? Quality OE reports ALWAYS contain three distinct elements: a well-thought-out interpretation of the board’s policy language that demonstrates that the CEO and staff fully comprehend the board’s underlying value as stated in the policy; a set of MEASURABE or DEMONSTRABLE indicators—conditions that the staff can observe and document, and know when it does that compliance has been achieved; and finally, evidence collected for each chosen indicator that documents whether those conditions actually were realized.

If the CEO and staff do a thoughtful job of developing interpretations and indicators, plugging in the evidence should be the easiest part of creating a good report. But if laziness or disregard for the task set in and the interpretation and indicators are sloppy, the entire report will be worthy of the trash heap.

“Bad” reports—those that should be rejected by the board—typically are loaded with nothing more than processes disguised as evidence. These processes or activities often are quite reasonable and represent good things to do. If they are done well, they could result in compliant conditions within the organization.

But they are neither indicators nor evidence of compliance. They are processes and activities.

Did they work? Did they produce the compliant conditions they were intended to produce? How does the staff know? Did someone examine or measure the outcomes those activities produced? Did that examination result in any kind of hard data that can be used to document compliance?

Until actions and processes are elevated to the level of outcomes resulting from their application, they fail to qualify as indicators or evidence.

This should not be a difficult concept to grasp: ACTIONS AND PROCESSES DO NOT EQUAL EVIDENCE. Evidence (and related indicators) is the RESULT or the OUTCOME that can be observed and documented, or measured, or quantified, and then presented to convince the board that all the activities and processes actually worked.

CEOs and senior staff members always are eager to tell the board how hard they are working and how many neat new programs they have going. And most boards are eager to position themselves on the receiving end of that exchange. While there is nothing wrong with informing the board about these facets of organizational activity, and certainly nothing wrong with the board’s knowing and understanding them, this kind of information does NOT constitute monitoring the organization’s performance.

Monitoring is judging whether the organization is meeting the board’s standards of performance, both in outcomes and operations. That decision cannot be made on the basis of how many processes and activities the staff is engaged in. It can be made ONLY on the basis of measurable, quantifiable or demonstrable results of the application of those processes.

Both parties MUST consider the information presented by staff to enable the board to make sound decisions to be one of the most important exchanges between these two parties. If CEOs and staff take the easy road and send reports to the board filled with fluff (processes and activities), they deserve the public embarrassment that comes when the reports are publicly rejected and returned as non-compliant. If boards insist on accepting poorly prepared reports, they are perpetuating a cycle of laziness that, sooner or later, will bite both parties in their derrieres.

If Not Process, Then What?

If listing processes and activities is unacceptable, then what does constitute acceptable indicators and evidence?

First, let’s be very clear that indicators are nothing more than evidence without the data. An indicator simply is an advance statement of the condition the staff intends to use, once data or numbers or actions are added to it, that will demonstrate compliance.

An example: “We will know we are compliant when…at least 80% of salaried staff members indicate on a survey that they believe they work in an environment characterized by professional support and courtesy.”

The above indicator is not yet evidence. We have not yet conducted the survey, and therefore there are no numbers to insert that will indicate whether compliance has been achieved or not. But we are identifying what a reasonable performance level will be. When the survey is conducted, if at least 80 percent of responding staff members agree that the work environment is courteous and supportive, compliance has been achieved, based on the data. If 80 percent was not reached, this indicator may suggest non-compliance (although other indicators may tell a different story).

The point is, the indicator did not say we will be compliant when we conduct a staff survey. Conducting a survey is an activity or a process. The result of conducting the survey becomes the indicator or the evidence.

Does Every indicator Need to be Quantifiable?

In our experience, it always is good to try to find some means to quantify evidence, if possible. Doing so eliminates the potential argument about whether the organization is compliant or not. Sometimes, however, depending on the type of indicator chosen, quantification may not be possible.

We have reviewed reports in which the CEO and staff chose indicators such as “We will know we are compliant when…every instructional program is evaluated each year.” That is inadequate. While that activity may be done each year, there must be some action or documentation associated with it that can be used as evidence. Did the evaluation result in any added information about the instructional program? What was it? Were all programs judged to be acceptable? Were any changes made on the basis of the evaluation? Is someone in position to look at the activity and certify that the required action was performed?

Beyond Public Embarrassment Resulting From Rejection, Why Do It?

Yes, developing quality monitoring reports takes time and effort. And one reason staffs do it is because the board requires it. But beyond that, should the CEO and staff not know on a continuing basis how well their programs and strategies are working? Should there not be in place some mechanism to judge whether all the good-sounding activities actually work? And should there not be some means for correcting those parts of systems that don’t work or that have never produced their intended results?

This is not added work, heaped on top of staff members’ day jobs; this IS staff work. If it is not recognized as such, there is little motivation to see the development of good monitoring reports as anything more than “the board made me do it.” And when that is the view of the CEO and staff, the reports become prime evidence of it.

On more than one occasion, we have had CEOs and senior staff members tell us that even if the board should abandon Coherent Governance® in favor of some other form of governance that did not require regular monitoring, they would continue to do that work. Why? Because, they said, it’s a good thing to do. These are the staff members who have internalized monitoring, building the concepts of self-assessment and continuous improvement into their jobs. They see it as a logical means for judging for themselves whether their hard work is paying off–even if the board did not require it. And their reports reflect their acknowledgment of the value of the exercise.

A (Strong) Message to CEOs:

Your board has given you one of the greatest gifts any board can give its CEO: reasonably controlled freedom to do your job without board interference. Take a careful look around and observe the scores of your colleagues whose boards have not been so generous. Sometimes we fail to recognize what we have until we no longer have it. This unprecedented freedom you have to do your job isn’t guaranteed forever. If you fail to hold up your end of the bargain in this “high delegation-high accountability” exchange, life for you could look a lot like it does now for those colleagues of yours.

The only way any board can safely and prudently delegate significant authority to its CEO and staff is for that CEO and staff to THOROUGHLY demonstrate that their actions complied with the board’s policy parameters. Demonstrating compliance should be a privilege, a task taken eagerly and honestly. Looking at it as a chore, something to be taken lightly, or a burden to be accepted minimally, will jeopardize the environment your board has created for you and your staff.

A (Strong) Message to Boards:

When you adopted Coherent Governance® or Policy Governance®, you delegated significant authority to your CEO to do his or her job without asking for your approval. You did so in order to eliminate the role-confusing ritual of approving administrative recommendations about mostly operational issues that the CEO should be equipped to make. This was good and reasonable action on your part.

But you did NOT give up ultimate accountability for organizational performance. You cannot prudently delegate decision-making to your CEO without demanding in return appropriate and adequate monitoring of organizational performance. If you routinely accept any monitoring report placed in front of you, regardless of its adequacy, you have abandoned your duty.

Yes, your CEO and his or her senior staff members are busy people. They have important jobs to do. Developing quality monitoring reports is one of their most important job responsibilities. It always is appropriate to treat the CEO and any staff members who present monitoring reports courteously and respectfully, even if the report is unacceptable. But the board’s accepting a bad report just to avoid any potential embarrassment or additional work for staff is not doing anyone any favors, and it certainly is not demonstrating to the board’s owners that high expectations apply throughout the organization.

This system of governance will not work if either reasonable delegation or vigorous monitoring is missing. If reasonable delegation is missing, the CEO cannot be held accountable for decisions he is not authorized to make. If vigorous monitoring is missing, the CEO’s authority is unchecked—something your owners will find unacceptable. Boards CANNOT prudently delegate authority without concomitantly demanding quality monitoring in return.

A Final Note

Neither developing a quality monitoring report nor judging the adequacy of one are difficult tasks. Some CEOs and some boards look at it as a daunting, confusing challenge that almost defies understanding. It really is pretty simple stuff.

For the CEO: Interpret the board’s language, using your words, not the board’s; tell the board how you will know when compliance has been achieved (indicators, stated in quantifiable, measurable or demonstrable terms); then add the data to
document whether those conditions actually exist or not. AVOID PROCESSES AND ACTIVITIES AT ALL COSTS. Do this, and you will have a good report.

For the board: Look at the report and see if all the pieces listed above are present. See if there are activities, programs, processes, or strategies being used as indicators or evidence. If so, do not accept the report. If the interpretation seems reasonable, if the indicators and evidence are based on quantifiable, measurable or documentable evidence or data, the report likely is acceptable.


Linda J. Dawson and Dr. Randy Quinn are Senior Partners with AGI Aspen Group International, LLC, a governance-consulting firm based in Gulf Shores, AL. They may be contacted at .