Over a career of more than 40 years there has been ample opportunity to be involved in the making of some BIG decisions at Board level, either as an officer to the Board (Business Manager, Company Secretary) or as a Director. This article explores some of the mistakes made when making BIG decisions.
Before we get into the mistakes that get in the way of great decision making, let's have a quick look at what is needed for a great decision. Essentially it comes down to this - when making a BIG decision, always look back to the Purpose of the organisation as the starting point for discussion about the decision, and how the options being considered are consistent (or otherwise) with that Purpose. Also, along with Purpose, does the decision bring into question a clash with our values or, in the case of a faith based NFP, our statement of faith or beliefs? And finally, given the current context in which the decision is being made, does the decision move us toward our vision?
Now to the mistakes. When we take our eyes off the Purpose, Values and Vision of the organisation any of these (or a combination of them) can lead us to a bad decision. Here are some decision mistakes and questions you should ask to avoid making them:
Personal Passion - Is the decision coming primarily from a place of personal or group passion for a project or idea, or does the decision not really relate to the Purpose of the organisation? An example of this might be a pet project of the CEO or Chair that might even be a legacy type project that they want to do before leaving the organisation. This can be very dangerous as many Boards do not want to say no to long serving colleagues.
Price driven - Is the decision being made in preference to minimise cost or benefit in financial terms, delegating Purpose to the back seat or even compromising your Purpose? An example of this is an organisation that chases government funded programs without thinking through the ramifications of restrictions around government grants as that compromises their Purpose.
Personalities - Are there dominant personalities in the room that are influencing decisions one way or the other, rather than utilising a discernment approach to make sure that the whole Board are considering the best decision overall. Whilst you don't need unanimity for decisions, it is best practice to make sure all board members and senior executives can contribute to a decision, rather than those decisions being skewed toward a few or even one person.
Politics - Is the decision being unduly influenced by other stakeholders - so much so that the Purpose or sustainability of the organisation is being compromised? Sometimes a board needs to be brave and tackle difficult decisions that result in the need for careful stakeholder relationship management. The de facto handing over of decision making to other stakeholders often leads to BAD decisions.
Pragmatics - This one is a cousin to the price driven decisions. Are the risks associated with decisions not proactively managed, to the point that conservative pragmatism always wins the day. When an organisation sets a Purpose and vision often this involves BIG decisions that carry some risk. Having a solid approach to risk management will help you manage these risks and make better strategic decisions.
Peer Pressure - Sometimes the whole room is heading for a decision that seems obvious to make and you might be the one voice in the room that needs to speak up with an alternative. I remember a client during the COVID years that was considering its major June fundraising targets, expecting them to be significantly lower due to the COVID crisis and loss of employment of many supporters. As the Board approached the new calendar year budget the management and board were set to make a number of staffing cuts ahead of the expected drop in donations at the June appeal. One person spoke up toward the end of the discussion and recommended deferring the decision until after the June fundraising appeal so that the organisation could see what the supporters would do. the Board changed their decision and agreed, choosing to pray and trust that God's people would respond to the need. It turned out that giving went up not down, and a bad decision was averted.
Procrastination - With some big decisions the leadership can keep kicking the can further down the road as the decision always seems too big to make. More reports are requested, or more worst case, best case or even alternative scenarios explored. Whilst due diligence is critical in a big decision, so too are some reasonable boundaries around that due diligence so that a decision can eventually be made. Slowing down a decision for months and months becomes very demotivating, not to mention potentially missing out on the benefits of that decision being taken earlier.
Priorities - Boards need to always put the organisation's priorities ahead of any individual or group. When decisions are unduly influenced by staff or board member conflicts of interest or perceived status, our priorities can be diverted from the purpose and values of the organisation.
When your Board next makes a BIG decision, make sure you stay centred on the organisation's Purpose, Values and Vision as you consider the options. You are almost always guaranteed to make a better decision than you would if you are distracted from these !
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