Posted by: Don Linnen | 30 August 2009

Decisions. Get ’em right!

Outliers. The wisdom of crowds. Committees. Intestinal fortitude. Group think. Leadership. Where do I start??

Suzy Welch has written a book with some excellent ideas about decision making. In 10-10-10 she describes a simple but effective system to avoid impulsive or merely expedient decisions and make smart choices instead. In a nutshell, to determine the right decision, ask what the results will be over three periods of time.

What will be the effects of your decision in 10 minutes, 10 months, and 10 years? If you are satisfied with the anticipated results at all three stages, you can be reasonably confident you are making the right decision. I like simple.

That’s why I don’t much like committees. There is something to be said for more eyes looking over a proposal and more brains seeking solutions. A 2005 book extolled The Wisdom of Crowds. Some say a former governor and rising star is now a falling rock because she neither sought nor accepted the wisdom of others.

But group decisions offer no assurance of wisdom and prudence. Rarely do they offer boldness. “Fortes fortuna adiuvat” is commonly translated to “fortune favors the bold.” Bold committees are a rarity.

Jason Zweig, writing for investors, wrote an excellent article about “group think” in the Wall Street Journal. In “How Group Decisions End Up Wrong-Footed” he looks briefly at all the committees who have made VERY bad decisions over the last few years. According to Zweig, the “idiots, liars and thieves…torched billions of dollars.” But the unwisdom of compensation committees on Wall Street, investment committees at leading universities, nonprofits, and in many states, and boards of directors across the nation all contributed to our current financial crisis.

Can we learn from this disaster? If not, the “tuition” expense of this particular lesson in the “university of life” will be unbearable. What is the take-away lesson for nonprofits? Here is my mash of ideas from Zweig’s five points and Welch’s concept.

Welch believes that each organization must be very clear on its values, then begin a decision dialogue based on 10-10-10. Start with complete candor on values, performance, desired goals, etc. If you walk on eggs to avoid ruffled feathers, you are courting disaster. Overcome the fear factor by reflecting on how many lives you have to live and what’s the worst that can happen. Fortune does favor the bold. Don’t be reckless, but don’t be fearful either.

Zweig offers five points of decision making for investment groups which I’ve adapted for nonprofits:

  1. Measure what makes sense. When deciding on a new program or a new hire, determine the factors that most likely predict success. Programs – and people in a much more subjective sense – can be rated based on cost, impact, expected rate of return (objectively and subjectively), history of success in other organizations, and even “chemistry” or fit within the organization.
  2. Neuter the numbers. Rank the factors in order of importance and assign numeric values to those factors for each program or person under consideration. Be prepared to update those numeric values after deeper investigation or interview.
  3. Reframe the question. Determine the good and the bad. Make a list of the best things that can happen if the decision is correct and worst things that can happen if the decision is a disaster.
  4. Use “the five whys.” Go beyond questions that have simple “yes” or “no” answers. Instead ask “why” something is believed to be true. If you can drill down with five whys and still be satisfied with the object of interrogation, you can be comfortable in knowing you’ve explored for any areas of weakness.
  5. Define the default position. Determine a common denominator of success. From that, gradually build to what you want the program or position to be.

That default position may not seem to have any boldness in its properties. But strong trees grow slowly. The bold choice to plant it and the patient wisdom to nurture it will bear fruit for years to come.

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Responses

  1. […] stuck or apply the Suzy Welch 10-10-10 process if you dare. See my post of nearly four years ago. It’s a terrific way to evaluate choices, but you still may be left […]


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