Making Decisions as Organizational Leaders

Posted by Matthew Thomas

matthew-thomas-2Several news outlets recently published excerpts from a Q&A session with Facebook's Mark Zuckerberg. In the Q&A, he explained why he wears the same gray t-shirt every day. As the Telegraph states:

Mr Zuckerberg said he owns multiple versions of the same T-shirt, as clothing, along with breakfast, is a "silly" decision he doesn't want to spend too long making. He is also too busy looking after the world's largest social network.

"I really want to clear my life so that I have to make as few decisions as possible about anything except how to best serve this community. (Article here.)

This sounds very similar to the now-famous Michael Lewis interview of US President Barack Obama where he describes how he only wears blue or gray suits in order to reduce unnecessary decisions, since he has to make so many more important decisions, and decisions can be fatiguing (and distracting: the one time he wore a tan suit, the Internet nearly exploded).

A_Leaders_Primary_ResponsibilityAs leaders, more than anything else, our job is to make decisions. Making decisions takes emotional and mental time and energy. Spending time and energy on making the right decisions, the truly important decisions, can propel us forward. The trick is that decisions themselves have a cost (as explained in this now three-year-old article from the New York Times), and so spending time making lots of little (less important) decisions reduces one's capacity to make the bigger ones. This can tip us to one side or the other of the Tao of Action-Reflection: by causing us to decide without thinking, or to paralyze ourselves into inaction. 

Now, I'm still the type of person who likes to make some of these more minor decisions about daily attire myself, but I know that we have to limit our decisions to what will best impact our goals. Therefore, many organizational leaders:

1. Routinize minor decisions, so they don't pull from the energy we need for the important ones.

2. Set aside time to plan, so we aren't making so many decisions in the moment.

3. Make the most important decisions when we are fresh.

4. Pace decisions so we can pause and refresh periodically.

5. Reduce outside stress so we have more focused energy. 

6. Delegate decisions outside of their core responsibility to others.

Which of those six do you find the most effective? The most difficult? What would you add? We would like to hear about your experiences.

Tao of action-reflection, primer on process

 

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Topics: Matthew Thomas, organizational decision making

Organizational Health: Answering the Growth or Decline Questions

Posted by Matthew Thomas

matthew-thomas-2I read a blog post by Seth Godin recently that discusses a variety of options on how to organize one's business for growth. The article is spot-on and illustrates the high demand we see for process design: the right answer isn't clear from the outset, but must emerge from values and vision, not just from reacting to the current situation. There is more than one way to design one's work to meet the demands of the present based upon what the desired outcome is. Choosing that is where wisdom and discernment meet good process.

Growing a business (or nonprofit, or congregation, or federation, or network, or franchise, or brand) can be just as challenging, and sometimes just as frustrating, as leading a declining, shrinking organization. Just think through these questions:

1. How can we maintain quality service with such limited resources?

2. Our staffing model is struggling to meet new, unanticipated needs. How do we restructure without destroying morale and effectiveness? 

3. We aren't as relevant to our most solid customer/client/constituency/membership base as we were, and increased disaffection from them saddens us in terms of relationships and challenges the bottom line. Do we retool to rebuild these relationships, pursue the new relationships, or somehow do both?

4. My training didn't equip me for this situation. How do I get up to speed without losing momentum?

5. If I introduce some new product / service / program, what will that do to the current items on offer and those loyal to them? Growing_and_Declining_Orgs

6. If we stop doing what we used to do, how we used to do it, what impact will that have on us moving forward?

7. How do we keep costs aligned with revenues as we scale?

8. Our most loyal and vocal relationships are connected to a net loss event / service / product / program. How do we rectify that while building the brand, not harming it? 

9. How do our key relationships feel about us? How can we find out? 

10. What customer/client/constituency/membership relationships are we missing out on? What do those people want? How do we find out? How do we match up our events / services / products / programs to meet their needs? How do we do all of that sustainably?

11. A disruptor has entered the marketplace. How do we respond?

12. What is our vision, what are our values?

Notice that these questions are the same questions for both growing and shrinking organizations. The tone they take on may be different because of the larger narrative they are written in, but the questions are the same. Those narratives are often growth/innovation/hope, or decline/loss/fear. These narratives speak to the organization's history as well as the vision the leaders hold.

This means there is real opportunity for leaders to wrestle with the overarching narratives of growth, sustainability and decline: for growth can become decline, and decline can become growth, depending on how leaders approach the questions and implement their answers. 

How will you seize your opportunity?

Tao of action-reflection, primer on process

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Topics: Matthew Thomas, organizational design, organizational decision making

Financial Health in Organizations: Solvency

Posted by Matthew Thomas

Solvency is a significant measure of an organization’s financial health. No matter what the type of business, solvency factors in to an organization’s capacity to carry out its mission and purpose. Solvency is an issue for non-profits and churches as well as businesses and corporations.

matthew-thomas-2Solvency is determined by two basic tests:

  1. Balance sheet: a solvent balance sheet has assets that exceed liabilities.
  2. Cash Flow (Liquidity): cash flow is solvent when obligations can be met in the normal course of business.

Organizations that cannot meet one or both of those tests are considered insolvent. Insolvent enterprises often face added legal responsibilities to creditors (not just shareholders or members) in many jurisdictions.

Many organizations operate in or around this “Zone of Insolvency”, adding financial stress to the development of mission and purpose. In the business world, insolvency cuts into profits, since credit is more expensive and opportunities for growth take second place to managing financial emergencies. In the non-profit and church world, insolvency causes paycheck-to-paycheck living that distresses mission, staff, and donors, and additionally tends to create deferred-maintenance policies for fixed assets such as real estate and significant equipment.

There are a variety of approaches to dealing with solvency, which we will cover in future posts:

  • Healthy Levels of Reserves
  • Debt Management
  • Balance of Liquid vs. Non-Liquid Assets
  • Revenue/Expense Balance
  • Mindsets and Paradigms

We would be glad to assist you in assessing your financial health – particularly around the issue of solvency. Click the button below for more information.

Get a Financial Health Assessment

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Topics: Matthew Thomas, organizational decision making, Financial Health