Craig Kephart learned the hard way that being CEO does not mean you don’t answer to someone.
In his first position as CEO, his notion was squashed while trying to manage relationships with the board of directors and investors.
“Being an entrepreneur, my bias coming into this was simply support me, get out of the way and let’s grow,” says Kephart, co-founder, president and CEO of Centric Health Resources. “What I’ve learned to do is bring a lot more thought to the process and particularly communication.”
To strengthen board relationships and, ultimately, the company, you have to seek out how members want to converse. Communicating effectively also means being prepared and actively listening.
It took Kephart, who has 80 employees at the health management organization, 18 months to tweak the process. His board members include a pharmaceutical company CEO, a former U.S. Food and Drug Administration director and private company executives, all of which communicate differently based on their job experience.
Smart Business spoke with Kephart about how to effectively work with your board.
Strike a balance with communication. You have to find that balance between too frequent of communication, which leads to a management board. In other words, if you’re calling them constantly and sending them information constantly, you tend to invite more oversight, and scrutiny and involvement in your day-to-day business.
Most CEOs, most entrepreneurs, would really like to have their board be supportive, have their board there to help them grow, but not to get into the day-to-day management. It’s striking that balance.
For me, that has been (doing) a fairly comprehensive business report every month talking about financial results. One of the things I have found that is extremely key is keep them aware of business development opportunities, so I always try to include those types of things.
My first year or so I always felt like I was on the defensive at board meetings and rightly so. The board just simply didn’t have enough information. Finding that balance really had to do with reading my board members and understanding who they were, what their backgrounds were, what sort of world do they come from, and then trying to apply that to our schedule.
I spent some time just looking at and talking to (board members about) what were they used to getting in their organization. Spending a little bit of time and trying to understand how they receive information in their organizations then helps you to give them information in the style in which they’re accustom.
The first place it starts is always financials. ‘I’m used to seeing financials in this kind of format, or I’m used to seeing this kind of view. I’m used to looking at it this way.’
That was really where we started in how they wanted to see the financial information. Then, it kind of went back to how they were most comfortable in seeing you lay out a strategic plan.
Your strategic plan obviously reflects your thinking and your knowledge, but there are ways in which certain people want to see that start from whatever your assumption is to how you support that assumption to where your conclusion is. There’s a process that they need to go through. If you recognize it, and acknowledge that process, then it’s a lot smoother sailing.
Prepare for meetings. Being prepared for board meetings is absolutely critical. Again, I learned that the hard way.
Being totally prepared at the board meetings to answer questions, to lay out your strategies, to articulate them well, pays off.
I usually start about 45 days ahead of the board meeting with a straw-man agenda at least of things I think the board is interested in, and then solicit their input on the agenda ahead of time. That way you make sure people aren’t coming with things they want to talk about that you’re not prepared for.
I try to get an agreement on an agenda probably 45 days in advance to the board meeting. Then, start building my support materials and presentation. A lot of it is financial in nature, so work with your CFO to make sure you’re telling the story you need to tell and make sure you’re highlighting all of the risks and rewards.
Typically, a week before the board meeting, send out a pre-read packet. Getting into a board meeting and trying to dive into a great deal of detail oftentimes leads you down rabbit trails that aren’t productive or places you don’t want to go.
I have taken to trying to provide a lot of detail in the pre-read packet that then I can just reference so we don’t have to go through 900 slides. I can do a quick executive overview in about 10 or 15 slides, reference the materials that were sent out to them in the pre-read packet, and then have a much more productive discussion.
Another key point would be to make sure when you go into your board meetings to know what it is that you want from your board. I always try and go in with two or three key things I would like to get accomplished and specific questions I would like the board to help me answer.
Actively show you’re listening. No. 1, I do take keynotes during the board meetings and there’s always some suggestion of, ‘Oh, next time I’d really appreciate seeing this.’ I just take unofficial notes, and then I review those as I’m putting the agenda together and make sure I include them back in so that they can see, ‘Oh yea, he didn’t forget; he was listening.’
It would be easy to say, ‘Well, that’s not that important; these are the things I want to talk about.’ When you do that, they feel less involved and less satisfied.
A lot of us who are entrepreneurs I think are always in a sales mode because we’re always trying to convince people that our ideas are better.
What I’ve had to learn to do is to really kind of bite my tongue sometimes and sit and listen, and make sure I understand what they’re really trying to say and what they’re telling me.
And, again, that pays off.
How to reach: Centric Health Resources, (636) 519-2400 or www.centrichealthresources.com