 Soybean
Board Buys In To Strategic Allocation of Resources
by Janice M. Dahl, CAE | Executive Director,
United Soybean Board (Click
here for bio),
Teresa Lee, CAE | United Soybean Board, and R. Christopher
Schroeder | Centrec Consulting Group, LLC
Though the United Soybean Board of December 2003 was sophisticated
in its strategic planning processes, its 64-member Board completing
intense exercises in visioning, action planning and evaluation
at each of its three board meetings a year, something was going
wrong.
Rumblings were growing about the traditional
budgeting process. The “hall
talk” was getting more animated. Was the Board really
strategic if its budgeting did not allocate money by priority
strategies? Did the Board really have control of the
resources or did control lie with a small group of politicos
or the vocal statesmen?
The United Soybean Board stood at a crossroads, realizing
intuitively that longstanding cultural procedures would have
to change for the organization to truly reach the next stage
in the strategic allocation of more than $40 million a year
in marketing and promotion on behalf of soybean farmers.
At that time, the budget was completed
by a Budget & Finance
Committee of five to six members who estimated upcoming revenues,
reviewed committee requests and historic allocations, formulated
a budget and presented to the Board. With an occasional scuffle
over dollars on the floor subject to the plea of a statesman
at the microphone, the budget would find its approval. The
discussion at the close of 2003, with the Board turning its
attention strongly to the importance of its approach to strategic
planning, was pretty simple. It was time to put its money where
its planning had been. No longer would the Board be satisfied
with an approach to budgeting based only in historic allocation
or committee requests.
Staff and consultants, working with
a member committee, began working to find a solution to the
challenge laid out by the Board. They looked to meld budgeting
with the Board’s
strategic planning processes and to invent a consensus-based
process of budgeting that involved the entirety of the Board’s
64 members. But, as one Board member challenged, processes
needed to guarantee budgeting would not become a “food
fight” on the floor of the Board during business sessions.
The process became one of discovering
a methodology for the full Board to participate in the budget
discussions in an orderly way, to get quality information
and to give their input. Ultimately, the working group decided
on electronic keypads to capture the Board’s input on a series of discussion points which
drive the budget. Utilizing specially designed allocation
model, Board members vote on the Drivers for their priority
strategic issues, giving them budgetary weight as they vote.
Drivers, chosen by the Board for their relevance, include measures
like the openness of the environment, the strategic importance
of the issue, the Board’s ability to impact the issue,
and the potential return on investment. There are five of these
drivers at the strategic level. Each was very specifically
defined in writing, explained, and adopted by the Board. Each
was also given a weight. The Board had the opportunity to vote
with their keypads, scoring each of these drivers at five specifically
defined levels. For example, in the “Strategic Importance” category,
the Board would choose from five levels ranging from describing
if the issue is of strategic importance to the industry segment
it represents and talking in depth about what that means. It
is important to note that the voting is used both to make direct
adjustments to the budget allocation and to provide the Board
with feedback so they can use the information to make manual
adjustments.
The Board also uses the voting technology along with dialogue-and-deliberation
to set anticipated revenue levels for the organization. Along
with written information received in advance from industry
sources, the Board fully discusses the revenue information
and utilizes the electronic systems to reach consensus on the
revenue factors. This has given the full Board a better understanding
of the factors at work and resulting in greater buy-in for
the process.
In developing the formula, there was
a lot of discussion around what role history should play.
For example, should historic funding of a budget category
have a heavy weighting or no weighting? USB
built in the historic funding levels, including the staffing
and overhead costs, in order to give the overall program greater
stability. The historic funding (program funding, staffing
and overhead) now combines with the Board’s voting on
strategic and tactical prioritization to generate a final budget. Once
the preliminary budget has been generated, the Board has the
ability to make direct adjustments to individual strategies
or tactics. The staffing and overhead are allocated to
the individual strategies and tactics under which they are
generated, so the Board is actually aware of what a strategy
costs to fulfill.
Going back to the question of historic allocation of resources,
the Board considers the constraints annually, allowing the
percentage the budgets can move up or down for the formula.
In the last three years, the Board has chosen a conservative
plus or minus 10%. Interestingly, on the floor, it has also
asked to see the budget with no constraints for the purpose
of discussion. The benefit of utilizing history, rather than
zero-based budgeting, is that it affords management and leadership
some level of stability in planning. However, it is limiting
in truly adopting a strategic approach in planning. Using the
technology at hand and the allocation model gave the Board
the ability to see the data without the constraints at any
time, and to take advantage of greater intellectual challenges
and opportunities that data could afford.
The keypad technology was integrated
into small and large group discussions on the strategic issues
to punctuate the voting processes. It also allowed the Board, as appropriate,
to gather information from outside groups (affiliates, peer
groups, industry, academia) to provide as input in our planning
processes or as a service to those groups. Important
to the success of the process was the creation of written “briefs” on
the strategic areas, which are updated for each meeting on
the information related to the action to be taken. These briefs
are provided in complete workbooks two full weeks prior to
each Board meeting.
Equally important was the Board’s commitment to stay
current on the written material and its demand not to repeat
written material during the course of the shortened Board meetings,
which the Board also mandated. It was critical in our
Board’s culture that the entire Board be able to see
all the input into the budget, so each of the figures (i.e.
revenues, administrative costs, unallocated funds, etc.) are
all approved by the full Board step-by-step to assure understanding
and transparency. The use of voting technology has allowed
the meetings to move faster and integrate processes that once
were more time consuming.
While many Boards budget once a year,
the United Soybean Board’s
integrated planning and allocation process is year-round and
Board members remain very involved at all levels. The
three meetings are generally dedicated to strategy, tactics
and evaluation, respectively, with general business at all.
With keypads always in Board members’ hands, the respective
questions and “drivers” on the budget change in
accordance with the task at hand. In February of each year,
the Board is setting its strategic direction for the next year.
In July, it is confirming its budget and its tactics. In
December it evaluates its impact on the last year and does
visioning.
In February and July, the Board’s votes on issues of
strategic priority serves to allocate its budget. The Executive
Committee then reviews that budget to see if there are any
other recommendations to be made to the Board, and presents
the final budget to the Board. The Board has their own data
from earlier in the meeting in front of them, any changes the
Executive Committee made, all in the form of a final budget.
It is in their hands in the form of an integrated strategic
plan and budget. The Board has the ultimate approval.
The voting also generates full color
reports, rich in information, the data indicating areas for
further dialog of the full Board or respective committees.
The Board made a move to adopt the model of dialogue-and-deliberation,
though with minimal success. The move from Robert’s
Rules and parliamentary procedure to one of dialog, with
such a large board, has met with mixed success. The Board
has gone to a process in which the dialog-and-deliberation
process is utilized in specific parts of the meeting, announced
and facilitated in order to help the Board learn and understand
the process.
The initial introduction of the strategic
allocation technology to the Board was popular, the members
wholeheartedly accepting the new budget format, which was
led by a strong and dynamic new chairman of the Board. The
strongest comments of support came from members of the Board
who believed in the consensus-led data and its resulting
budget. In such a large Board, some Board members said they
had never before felt a sense of vesting in the budget, whereas
in the new system they felt a hands-on commitment to the
process. Counter to that, non-supporters
came from the ranks of those that felt they had lost power
or resources in the system that built a broader democratic
process. Within the Board, they began a process which would
result in erosion of support which would cycle over the next
three years, although ultimately, the Board would continue
to support the model and its precepts.
The integration of the new technology
has not been without its bumps. As any cultural change, it
faced its challengers. The biggest change was the seeming
shift of power from the committees to the full Board, and
from the power brokers to the full Board. Several modifications
of the model have been made to address political concerns
of the Board, yet the core of the intent remains intact. The
strategic allocation of resources remains consensus driven,
in the hands of the 64 Board members.
Cutlines for Accompanying Graphics:
StoryMap on Implementation (PDF) WILL NEED
THIS
This graphic describes the process the United Soybean Board
underwent in implementing the new process into the many facets
of the board’s operations. The storyboard helped the
staff and volunteers visually to understand what was happening
and to see what was coming up in terms of changes to meetings.
Budget/Summary Report/Allocation Worksheet
(PowerPoint) WILL NEED THIS
The Board provides input on the price and utilization of the
upcoming soybean crop electronically which ends up being
the new budget. The second step is the accumulation of the
Board’s electronic voting on Strategic Drivers which
produces a Summary Report and ultimately a preliminary budget
allocation. When the Board sees the Allocation Worksheet,
it engages in dialogue and can make any final adjustments
to its budget on the floor.
Schematic of Board Meetings (PowerPoint) WILL
NEED THIS
The Board is in a constant and active state of strategic planning.
But generally the visioning begins in December with strategies
determined in February along with a preliminary budget. The
tactics and a final budget are determined in July. In
December, the prior fiscal year is evaluated against the
goals, strategies and tactics of the Board.
(Note: USB is on an Oct. 1 Fiscal Year
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