Saving time in preparing for board meetings
Some of the startup companies I work with do awesome board presentations. Stylish visualisations, tons of data. I suppose it's because most of them are consumer facing businesses, but boy are they good at communicating. I always feel very sorry for the poor souls who have to prepare this every 5-10 weeks and, yes, wonder if their time (and my money) is being well spent. Personally, I don't like weighty board packs and I do not wish to inflict slide preparation upon anyone. I think there are simple ways to deliver what investors want and spend less time doing it.
Here are some recommendations for entrepreneurs and CEOs:
- Spend time agreeing on KPI's upfront. Make it explicit and achieve consensus with your board and investors as to which KPI's are really, truly critical in measuring the business. At Zoopla, COO Doug Monro and I built an initial set of suggested KPI's which we brainstormed as a board; we then pruned the list down to the absolute core. Successful small businesses need not be run on a gazillion of heatmaps, the right and preferably short set of indicators will do. In my portfolio, PriceMinister is the only exception but Pierre and his team have built an incredibly easy-to-read set of operational KPI's printed with colour coding on large foldout sheets; it gives a wonderful graphical depiction of what is now a fairly complex business and allows you to focus in on the trouble areas immediately. Probably as a result of this attention to detail, PriceMinister, a large and mature business, is run on extremely tight and accurate monthly targets. Pierre and his team, in fact, hardly ever need any help at all running their business.
- Spend time agreeing on financial formatting and accounting methods upfront. Agree upfront on how you want the financials presented, how you account for revenues and costs etc. and run it past your auditor to ensure he/she will like it too. Decide how you want to blend operating and financial KPI's to present the most useful view of the business. It's much easier to align internal reporting with what you want to see and what auditors will agree to back than to get slapped during the audit or by a potential acquirer and have to explain to your investors why you net revenue line was overstated.
- Make sure operating KPI's and financial reporting go hand in hand. If you get into the habit of reporting starting from your operating KPI's and building up towards your financials and do this well, you are defacto providing a diagnostic of over or under-performance as you go, saving time and avoiding misalignment. This is especially useful when you have late-stage investors who are prone to manage/control businesses through the lens of financial reporting only. Again at Zoopla we have two set of KPI's, one tracking site and product engagement and one tracking our sales and monetisation and gradually baking in the financials. Two pages, that's all we need.
- Use the same exact indicators and dashboard for the board as you do for running the business. Bifurcating the two is what's done in many companies and frankly I don't get it. The board report should really be the same or a cut down version of your operating dashboards. If you force investors to understand and look at the same numbers as you, you are also forcing them to understand the business in a deeper way.
- Delegate and automate. Anything anyone else can do within the company, get them to do it. Any repeatable task you can automate through technology, do so. Don't have a PA ? Your investors have some of the world's best PAs: get them to organise the board meetings for you.
- Only use Powerpoint where it's truly useful. If you have a well designed set of KPI's that runs in Excel, then simply print the Excel sheet or mail it to your board members; they will survive. Life is too short to be designing long powerpoints. If you have to, use simple, blank formats that you can design and print easily. If you want to wow your board withe beauty of your logos and brand excellence, do a short demo :-)
- Be highly consistent and repetitive. Boards need training. They need consistency in agendas, board style and flow and in materials and metrics used. Apart from the one or two special topics you want to discuss, keep agenda and board pack always identical. A well designed board process should really not change that often.
And with that, back to work. Have a few over-designed board packs to read :-)
PS: If you want good advice on the actual running of the meeting, read the indefatigable Mark: http://www.bothsidesofthetable.com/2010/02/12/running-more-effective-board-meetings-at-startups/