n March 2004, the management team of PSS/World Medical, a $1.3 billion supplier of medical supplies, equipment, and pharmaceuticals, dedicated an extended board session to fully explain its strategy to directors and solicit their input. The intent was to provide a session that would fully immerse board and management in an in-depth discussion of strategy. PSS was competing in an industry with large, wellcapitalized rivals, explained David Smith, its CEO, and it was critical for directors to buy in to the long-term direction of the company. "When you are running a company-dealing with competition, legislation, customers, product recalls and labor concerns-the last thing you need to be worried about is whether your directors support your activities and what you're trying to accomplish."
But his desire to get his board involved ran deeper:"I saw them as a great resource, because these directors have done this stuff before.They have also seen mistakes or made mistakes themselves. So I wanted to get that brain trust involved in the process so it could challenge us, it could ask questions, it could put us through a vetting process to improve the content of our plan." PSS benefited tremendously."The directors asked a lot of great questions," Smith explains."And they brought ideas that we hadn't thought about." Several directors had their ear to the ground in Washington, for example, and could tell the mood of the legislature. They pointed out several areas that could become problems in the future, and opened Smith's eyes to the need for a backup plan. David Smith's successful experience in working with his board is all too rare. Fortunately, there are concrete steps that CEOs and boards can take to get themselves on track.