We recently ran a social enterprise business planning training session with Foresters Community Finance and Moreton Regional Council. Foresters mentioned that one of the biggest barriers to receiving community finance loans was poor decision making by governing bodies. That’s an issue that pops up pretty regularly so Judith, Jon and I sat down to analyse just what can go wrong in decision-making. Here’s what we think some of the oft-repeated scenarios are:
1. Good decisions are made, but staff or volunteers don’t follow through, so before too long, the same issues have to be addressed again. The fixes: Check whether the decisions are realistic and can be achieved. Set an action plan so that the implementation is in doable chunks and can be monitored.
2. There is lack of clarity about the problem, so the scope of discussion expands, people weary and the loudest voice prevails regardless of the merits of the decision. The fixes: Use a simple decision template as a structured way to untangle the issues. Use hard data when it sheds a bit of light on what options are viable. Be clear about when the decision has to be made and do the spade work in advance so everyone is prepared.
3. Emotions skew the view. Common ones are fear of upsetting someone (such as a faithful volunteer/donor, a long-term chairperson); fear of change; and fear of conflict or confrontation, perhaps grounded in a lack of skill in dealing with conflict. The fixes: Name the fears and work out how to mitigate threats or support each other to confront them.
4. A sense of diffused responsibility kills off action because no one in a committee or on staff is willing to take leadership – the buck stops nowhere in particular. The fixes: Get real – don’t waste time on ideas that no one will drive forward. Recruit new board or staff members who are passionate about the work or the vision. Change the vision and goal posts to ones that people really do get excited about.
5. People are unsure about the level of risk involved, or over-state the risks. The fix: Use simple risk assessment tools to agree exactly what the risks are, how likely they are to occur and how disastrous the impact would be if they did occur. Work out if you can dedicate some effort to minimising any risks that are unacceptable. Don’t forget to look at financial risks so your cash flow or bottom line stay healthy. Remember, nothing is risk-free!
Do these scenarios ring a bell? Any others you’ve seen recurring?
Yes. No. Maybe.
