How many key decisions did your main or operating board or function team make in last year?
How many were good?
How many bad?
How can your board avoid repeating the errors of last year?
Can you all agree on what constitutes a good or bad decision?
If your board decided to fire X, hire Y, spend A, not spend B or launch C are you sure you know who on your board agreed with those decisions and who didn’t?
Did you all vote? Did the CEO decide? Did the Chair hold sway? Did the CFO nobble the CEO? Did the GC even get a look-in? Might any of last years’ decisions land your organisation in legal trouble or onto the front pages next year?
Against what benchmark were those decisions judged? Short, medium or long-term? Were the decisions based on financial criteria only?
Were environment, society and governance (ESG) issues taken into account?
Who on your board is holding a silent and bitter grudge against a decision taken last year?
Who has left your business who could damage it later? Do you know? If not why not?
Even if the most forceful personality on your board took the decisions and you were too scared to speak up, does that person have anything approaching a decision-making process?
How might your main or operating board, ExCo or function team make better decisions:
Step 1: Agree a decision-making process before taking any decision
If your board doesn’t act as a board in the collective decision-making sense, what’s the point of it?
Agreeing a decision-making process can take the heat out of the meeting and shed much light. Old fashioned “standing orders” have their place: speaking through the Chair; proposing, seconding and voting. On big issues don’t forget to vote even if it’s not a formal or “legal” vote. This stops people hiding and prevents decisions being driven through.
Step 2: Agree on a purpose, strategy and behaviour (PSB) plan against which your board will judge its decisions
If the purpose of your organisation is to maximise profits and screw everyone else, at least admit that, take responsibility for it, take and judge your decisions against that benchmark.
If on the other hand, you want to balance profit with the environment, society and governance issues then don’t pay lip service to those issues – agree, upfront to what extent, ESG will figure in your decisions.
Are you all clear on your organisation’s purpose? In my work with boards, the lack of a shared purpose statement is at the root of many poor decisions.
Step 3: Appoint a Devil’s Advocate by rotation at each meeting
How many meetings did you attend last year during which you remained silent about an issue or behaviour on which you felt strongly?
How many times did you stand by and watch a colleague being bullied or wronged and didn’t speak up?
How many times did you witness hard work go uncelebrated and failed to call it out?
Which business decisions did you disagree with, but didn’t feel able to fight?
A simple way of alleviating this problem is to appoint a Devil’s Advocate by rotation at each meeting who has permission to call out whatever he or she likes about whomever he or she likes, or not.
No chance, I hear you say, on your board.
If true, then expect next year’s decisions on your board to be as good or as bad as last year’s.
Nothing will change unless you make it happen.
I hope my decision-making grid helps.
Key Decision-Making Grid: 7 Steps
- One member of the executive team formally proposes a key decision.
- They must make an explicit link between their proposal and the shared organisational purpose, strategy and behaviour (PSB) assuming this has been shared and agreed previously. If it hasn’t, now would be a very good time to agree your PSB or all your decisions will carry a significant risk of failure.
- The Devil’s Advocate for that meeting gives three reasons why the decision is a bad one.
- Legal and HR give their views.
- The rest of the Executive Team give their views. Around the table, No hiding. No silences. Everyone must give a view a.k.a a vote.
- The impact of the decision is tracked over the year or years.
- A post- mortem is held at the appropriate time on the decision. Fix, don’t point fingers.
What big decision is looming for your board?
How will you decide?