Governing the Escalation Process
Mark A. Pfister - 'The Board Architect'
Non-Executive Director | Board Director | CEO | Chief Board Consultant | Corporate Strategist | Board Macro-Influencer | Speaker | Author | IBDC.D
Implementing a Simple Process for Effective Problem Solving
(Originally appeared in the February 16th, 2022 'Across the Board' digital publication, a Board Director, Board Advisor, C-Level, and Business Leader publication reaching 27,500+ exceptional business leaders in over 70 countries with articles focused on leadership, strategy, and governance topics - sign up here)
Some of the best organizations possess the qualities to quickly overcome obstacles. They seem to be able to identify and solution problems in what some may view as record time. This is commonly followed by accolades and numerous pats on the back for those involved. Problems fully solved? Well,… maybe.
Many of these organizations are not aware of the actual expense (properly measured in budget, scope, and time) it requires to quickly mitigate and overcome these realized risks. How many of the organization’s resources were used to correct the problem? Which of these resources were pulled from their existing duties? What other important delivery deadlines were affected or distracted in the process? How many leaders and outside departments had to get involved? Essentially, what was the overall cost to the organization’s budget, scope, and time? In most scenarios, an effort is not made to measure these 3 important evaluation points.
As it relates to governance, Boards actually have a large responsibility in this area. This is not to imply by any means that a Board should infuse itself at the management/staff or CEO responsibility level, but there is a governance need to review the escalation standard operating procedure (SOP) to ensure it is understood and working.
Organizations that are unclear or unwilling to discuss and implement escalation processes commonly experience scenarios that allow escalations to reach well above the level and breadth they warrant. Problems inevitably go up the leadership chain until someone has the courage to address it and force the escalation to stop in its tracks.
The closer a problem gets solved to the source, the less budget, scope, and time is expended
It commonly takes a large-impact escalation for the process, or lack thereof, to be deeply reviewed. For many leaders this is when the depth of the problem, and its long-term impacts, is commonly realized.
In my firsthand observations, Boards are experiencing an increasing number of escalations from within the organization reach the boardroom. A majority of these have no business taking up time on the Board’s agenda nor the offline efforts for Directors to become familiar with the situation. In many cases, the CEO is allowing these topics to proceed further up the leadership chain, unknowingly wasting time and undermining the perception of their judgement in the process. Thinking of an escalation process from a Board’s lens is likely the easiest way to visualize an effective solution.
First, identifying tiers in the escalation process allows for review gates relating to ownership. In the example, these review gates exist at the levels of management/staff, CEO, Board Committees, and then the overall Board. I have seen modifications to my model include lines of business as well as verticals leading up to every C-level in the organization. Some may be surprised to see an escalation entering a Board Committee prior to the overall Board, but this is indeed a best practice – for two reasons:
- A properly constructed Board Committee should have the expertise and experience to be able to directly address an issue without involving the entire Board from the start. There are of course instances that warrant a full Board’s input and vote, however, most escalations reaching Board-level can easily be addressed by the pertinent Committee and then be communicated to the remaining Board Members.
- If a warranted escalation does indeed reach Board level and it does not have an obvious Committee to be handed to, it is very likely that the Board is not architected properly, thus pointing out the need for a structural review, possibly a Board Architecture Assessment (BAA), especially as it relates to Committees.
Proper strategy and governance structures relating back to the organization’s goals are a commonly missed correlation in the escalation process. These areas outline level of responsibility to clarify the authority in making decisions, including those of escalations:
- Board: Organization goals
- Board Committees: Sub-goals and strategies
- CEO: Strategies and delivery management
- Management/Staff: Project and task completion
All leaders should think of everything they do or attempt within the 3 parameters of budget, scope, and time. There is essentially nothing within a leader’s or employee’s responsibility area that falls outside of these parameters, hence the value of these 3 factors guiding a holistic viewpoint. Every tier within this escalation model has a responsibility, albeit at differing degrees, to an understood and agreed budget, scope, and time.
Additionally, it is important to set the expectation that an escalation at any level is by no means a handoff! Fortunately, those who improperly utilize ‘the escalation’ as a means to pass off or jettison responsibility cannot successfully accomplish this within this model. First, the measurement point of ‘outside set parameters’ is comparing the potential solution and potential outcome to the level of responsibility as it relates to that tier’s budget, scope, and time. Second, the requirement of “Solution” OR “Propose Solution & Escalate” keeps the previous tier(s) involved in the solutioning process regardless of what tier the escalation reaches.
Organizations that have implemented this type of escalation requirement are pleasantly surprised to witness fewer escalations as well as lowering the number of tiers an individual escalation reaches – all in support of keeping the solution closer to the source, thus expending less budget, scope, and time.
Does your organization leverage an effective escalation model?
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Mark A. Pfister - Non-Executive Director | CEO | Chief Board Consultant | Corporate Strategist | Board Macro-Influencer | Speaker | Author - www.PfisterStrategy.com
About the Author: In addition to serving on numerous Boards, Mark A. Pfister is a renowned global Board Consultant, 'Board Macro-Influencer,' certified Board Director, speaker, author, and advises public, private, and nonprofit Boards in efficient and effective operations. Known as 'The Board Architect,' he is also the inventor of the 'Board as a Service' (BaaS) engagement model and an expert Project Executive frequently advising on strategic global initiatives in their initiation and operational phases...... << read full bio here >>
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