I was once asked in an interview about tough decisions I’ve made, and how I made them. I understand why it might be thought important in the selection process: it seems like a good question. Doesn’t it tell you something about the individual’s ability to cope in difficult situations? However, on reflection I’m less convinced!
Thinking back over a number of my roles, I realised (to my surprise) that most of the important decisions I have taken have not seemed tough at all. By ‘tough’ I mean difficult to make; they may still have been hard to implement. Conversely, tough decisions (on that definition) have often not been particularly important.
What makes tough decisions?
So what makes a decision tough? Often it is when there are two potentially conflicting drivers for the decision which can’t be measured against each other. Most commonly, it is when my rational, analytical side is pulling me one way – and my emotional, intuitive side is pulling another. Weighing up the pros and cons of different choices is relatively easy when it can be an analytical exercise, but that depends on comparing apples with apples. When two choices are evenly balanced on that basis, your choice will make little difference, so there is no point agonising about it. The problem comes when the rational comparison gives one answer, but intuitively you feel it is wrong. Comparing a rational conclusion with an emotional one is like comparing apples and roses – there is simply no basis for the comparison. When they are in conflict, you must decide (without recourse to analysis or feeling!) whether to back the rational conclusion or the intuitive one. A simple example is selecting candidates for roles. Sometimes a candidate appears to tick all the boxes convincingly, but intuition gives a different answer. On the rare occasions when I have over-ridden my intuition, it has usually turned out to be a mistake. Based on experience, then, I know that I should normally go with intuition, however hard that feels. We are all different though. Perhaps everyone has to find out from their mistakes how to make their own tough decisions. What we should not do is confuse how hard it is to make a decision with how important it is.
A long time ago, I proposed an important change to a committee of senior colleagues. The overall intent was hardly arguable, and I had carefully thought out the details. Overall, it got a good hearing. But then the trouble started. One manager picked on a point of detail which he didn’t like. OK, I thought, I can find a way round that. But then other managers piled in, some supporting my position on that, but objecting to different details. The discussion descended into a squabble about detailed points on which no-one could agree, and as a result the whole project was shelved despite its overall merits.
I learnt an important lesson from that experience. When a collective decision is required, detail is your enemy. Most projects will have – or at least may be perceived to have – some negative impacts on some people, even though overall they benefit everyone. Maybe someone loses autonomy in some area, or needs to loan some staff. Maybe there is some overlap with a pet project of their own. Whatever the reason, providing detail at the outset makes those losses visible, and can lead to opposition based on self-interest (even if that is well-concealed) which kills the whole project. As we all know, you can’t negotiate with a committee.
So what is the answer? The approach I have found works best is to start by seeking agreement for general principles with which the implementation must be consistent. The absence of detail means that the eventual impacts on individual colleagues are uncertain, and consequently the discussion is more likely to stay focused on the bigger picture. Ideally you are given authority to implement within the approved principles. But even if you have to go back with a detailed plan, once the committee has approved the outcome and the principles to be followed it is much harder for them to reject a solution that sticks to those, let alone to kill the project.
Looking at the wider world, perhaps the Ten Commandments of the Bible provide a good example of this approach. For a more business-relevant example, see my earlier posts on the principles behind good internal governance.
More generally, defining top-level principles is also the key to delegating decision-making to local managers. It means that they can make decisions which take proper account of local conditions, while ensuring that decisions made by different managers in different areas all have an underlying consistency. 
Planet K2 shared this great TED talk about how limitations can help creativity. But how is that relevant to management?
As managers, we always have to work within many limitations: it is the nature of the world we work in. Contracts of all kinds; laws and regulations; stakeholder wishes; all constrain the freedom we have to act. If we see our job as managers being to make sure that we comply with all these requirements – some of which may well be conflicting, making that task ultimately impossible – there is a good chance we will start a downwards spiral of attempting ever-tighter control while only making things worse, as artist Phil Hansen found. We become more and more stressed, and less and less able to meet all those requirements.
How much better to recognise that while the limitations rule out some options, those very limitations can help us to focus our imaginations on the many other options which we may not have considered, but which remain available (and which, as Hansen found, can still present an overwhelming range of possibilities). When you squeeze the balloon, it pops out somewhere else. That requires us to have the courage to be creative, to try new approaches which have some risk of failure – but that makes success all the more satisfying and rewarding, as well as helping to free us to continue down the route of creativity.
Hansen found that what seemed to be the end of his dream of a creative life was in fact the door to whole new worlds of creativity. Rather than try too hard to work within our constraints, let’s use them to help us find the ways to better solutions, as he did.
For the last few weeks I have been posting about general principles of governance. Let’s turn to a practical example: How do those principles apply to programme management? There is of course no one ‘right way’ – it depends on the context. However, there definitely are ‘wrong’ ways, and they are all too common!
Most programmes have a Programme Director, and most have a Programme Board. What are their roles, and how should they be related?
Programme Board
The Programme Board should be a fundamental part of the governance structure. There would be no point in it being there unless it makes decisions. To do that, it must be given authority by some other body, which must itself have the authority to do that. Programme Boards typically have as part of their role resolving cross-functional issues for the programme. Consequently, they will normally be set up to report to a committee within the governance structure which itself has cross-functional representation. If the Programme Board is unable to resolve an issue which comes to it, normally its parent will need to. If a Programme Board were to report to an individual, it would be hard to see how that individual could more effectively resolve any cross-functional issue that had to be escalated.Programme Director
The Programme Director’s role will vary in detail between programmes, but fundamentally he or she is the person accountable for making sure that the expected outcomes of the programme are delivered within the constraints agreed. That leads us to two further points. First, if they are accountable, who will hold them to account? That is another part of the role of the Programme Board. The Programme Director will present progress reports, papers for decision, etc to the Programme Board, to enable them to do that. A corollary is that the Programme Director should be appointed, or at least confirmed, by the Programme Board, which will also delegate authority. If things are not going well, it is the Programme Board that must decide whether a change of Programme Director is required. Second, what is the nature of the relationship between the Programme Director and the Programme Board? Essentially it is like a contract. The Programme Board is the customer for the programme, approving the programme requirements. The Programme Director represents the delivery team - the contractor, if you will - and needs to make sure that sufficient time and resources are allocated to the programme to deliver the requirements. Clearly making the two join up may require negotiation. If there are subsequent changes to requirements, agreeing how to accommodate these – extra resource, recognising more risk, delay or reduced quality – will require a further negotiation. Remember, accountability and authority need to go together. Just as with the CEO and a company Board, it is clear that the Programme Director has a fundamentally different role to that of the Programme Board, and to blur these distinctions will introduce conflicts of interest. Of course the Programme Director will normally attend Programme Boards, although that does not mean that they have to be a member (and the different roles are clearer if they are not). Either way, though, they should never be the Chair: they would have a clear conflict of interest. At best they would be tempted to steer the agenda away from certain issues, and it would become impossible for the Board to be effective in holding them to account. No-one should be asked to mark their own homework! It follows that the members of the Programme Board should not normally be junior to the Programme Director, and certainly should not be his or her direct reports. Of course there is a place for meetings of the Programme Team – but those are progress meetings, not Programme Boards. Do your Programme Boards follow these rules?
So, seven articles later, where does that leave us? We have talked about 15 principles for designing your internal governance, and I have listed them all together for you below for convenience. However, I do want to re-emphasise one thing I said at the beginning:
“What good governance is NOT about is bureaucracy, box-ticking and delays. It requires finding balances – between control and practical delivery; between the risks of delegation and the cost of control; between wide ownership of decisions and strong accountability for them; between a simple structure and efficient decision-making; between minimum overhead and an effective audit trail – which provide the optimum basis for success. Every organisation has different arrangements because the optimum trade-offs depend on the context.”
The principles for internal governance are just the things you should have in mind when you design your system. That does not mean that the result has to be complicated. It should be ONLY as complicated as you need it to be in your particular circumstances. If you are a large public sector organisation, it may be necessary to be at the high-control end of the spectrum. If you are a small development company, you probably need something much lighter-weight and more flexible – but that is not a reason for not thinking about it. Some principles are good-practice rules which are likely to apply everywhere. Others are choices you need to make. The important thing is that the choices you make should be deliberate, and should be consistent. By deciding exactly what principles for internal governance you are going to work to before you start, you give yourself the best chance of success.
15 Principles for Internal Governance
- Authority and accountability must go together.
- No-one will have authority to ‘mark their own homework’ (i.e. conflicts of interest will be avoided).
- Collective and Individual Authority are different. What will their respective roles and interfaces be in the structure you will create?
- The governance structure should be strictly hierarchical. All bodies which have Collective Authority must have a place within that hierarchy.
- Individual Authority is delegated through the line management arrangements, but it forms part of the overall governance structure and must join up seamlessly with the rest of it.
- The design should start by establishing those areas where the Board should make delegations (starting by noting the matters already reserved to the Board), and how they should be grouped.
- What (if any) dual-key approval arrangements are desirable?
- The authority grid should include qualitative as well as quantitative delegation limits, and should not be restricted to areas where a financial limit can be set.
- Escalation levels will be set to provide an appropriate volume of requirements to escalate, decided on the basis of business need and practical delivery.
- Decisions about committee membership should be made in the light of the delegation levels set, not the other way round.
- The list of staff (or roles) to be included as members of the Collective Authority bodies will balance the need for ownership of decisions with minimum meeting membership.
- Clear rules for meeting attendance will be agreed and maintained.
- What formal documentation (e.g. Terms of Reference, Letters of Appointment) will be mandated?
- In what circumstances will formal authorisation and/or acceptance of documentation be mandated?
- How widely will the arrangements be communicated?
- The Midas Touch - what is Governance for?
- The Midas Touch again - Starting to build Internal Governance
- The Midas Touch again - Authority and Accountability in Internal Governance
- How many ways can you design a tree? - Hierarchy in Internal Governance
- Snakes and Ladders - Delegation and Escalation in Internal Governance
- Why are YOU here? Choosing members of Internal Governance Meetings
- What's in a word? Documentation for Governance
This is article 6 in my series on designing internal governance.
You have decided on your meeting structure, what each meeting is for and how much authority it has. This article is about choosing members of internal governance meetings.
Cabinet Responsibility
A good place to start this discussion is with Government, and the concept of Cabinet Responsibility. On most matters, however hard the arguments behind closed doors, and whatever their personal views, Cabinet members are expected to support the decisions made – or to resign if they cannot. They are party to making those decisions, and they must own the outcome. Collective Accountability in governance is a similar concept. But in choosing members of internal governance meetings, we have to remember what we are trying to achieve. What happens when you fail to involve people in making decisions that will affect them? I’ve seen a variety of reactions, but what you can’t expect is that it will make no difference. Put yourself in that situation: how do you react? Initially the person will probably be angry, although not necessarily openly so. If nothing is done to put things right, at the very least they will give you less commitment; it is quite possible that they will feel an impulse to allow (or even encourage) things to go wrong, to prove their point, and not all of them will successfully resist it. At the other extreme, I was recently at a meeting attended by 35 people, of whom I think 8 spoke. Was there really 27 hours-worth of value from the rest attending? I doubt that that sort of attendance does anything for ownership, anyway. Large meetings not only waste time, they tend to encourage grandstanding, and inhibit the full and frank discussions which may be necessary, but which are better not held in front of a large audience. Being a member of the meeting can be seen as a matter of status, so there is also a need to separate genuine needs for inclusion from status-based ones.Choosing members of internal governance meetings: inclusivity versus efficiency
Deciding membership of Collective Authority bodies requires balancing the desire for inclusivity (more people) with the need for the body to be efficient (fewer people). Remember why we use collective authority: to ensure that decisions are owned by all those who need to own them. Identify who that will be, given the Terms of Reference expected, and choose members accordingly, remembering to check that the resulting membership is also appropriate for the level of delegated authority to be granted. It is likely that this will mean that most members are of a similar level in the organisation; this is in any case usually required for effective debates. Where necessary, specialists or team members may attend meetings to provide knowledge of detail. However, this does not mean that they need be members, nor that they count towards the quorum – nor that they can come next time! They should generally only attend for the item that they are supporting. Create the right expectation at the start: it is hard to send people out if a pattern of not doing so has developed. Normally the Chair of a “parent” meeting will not be a member of subsidiary meetings (remember that in a hierarchy, every meeting has one and only one parent meeting from which they receive their authority!), but if, exceptionally, they are, there may be an expectation that as (probably) the most senior person present, they should chair that meeting also. This is not helpful for clarity, as it results in the difference in authority levels between the meetings being less clear. If they are there, it should be because they have expertise which is required, not because of their seniority. If a subsidiary meeting’s membership looks almost the same as the membership of its parent meeting, it is worth considering whether they are really different meetings, or whether the matters to be considered should simply be reserved at the higher level. If not, then the membership should be slimmed down.Principles to establish:
- That the list of staff (or roles) to be included as members in the Collective Authority arrangements will balance the need for ownership of decisions with minimum meeting membership
- That clear rules for meeting attendance will be agreed and maintained
We all like to feel we are in control, don’t we? Especially when we have been told that there will be consequences according to how well we deliver the task we have agreed to do. We feel pretty confident in our own ability to do the job – probably we would not have agreed to take it on otherwise – but what if we can’t do it on our own? I remember the first time I had to promise to deliver something knowing that I would have to rely on other people to do substantial parts of it. While I still felt the confidence of youth that it would all work out, I also remember the frustration and discomfort of finding my instructions were misunderstood or ignored; of having to let someone else try, and sometimes fail; of not being able to control all the details. As managers, we all find our own ways to deal with this; at the company level, we need to be a bit more formal. This article is about where to start to build internal governance to address this need.
It all starts with the Board
The Board is accountable to the shareholders for delivery of the objectives of the company (public sector and non-profit organisations will have equivalent arrangements even if they are called something different). However, unless the company is very small, the Board does not have the capacity to do more than make a very small proportion of the decisions required to achieve this. It needs to retain enough control to monitor and steer the delivery of the objectives, but it must delegate the authority to make other decisions. Internal governance is the framework that it sets up to manage this. Its objectives may include the following:- To balance the Board’s need for control and assurance of delivery with its practical need to deliver through others, in a way which optimises the balance between the risks it takes by more delegation, and the costs (financial and otherwise) it imposes through more control;
- To have a secure underlying logic so that the framework is self-consistent;
- To ensure that conflicts of interest are avoided as far as possible for those with delegated authority, as these tempt people to behave in ways that are not in the best interests of the organisation;
- To make sure that those people who will have to live with the consequences of decisions made feel ownership because they have been involved in making them;
- To ensure that decisions are escalated when, only when, and only to the level necessary for them to be made effectively, so that interventions are appropriate and timely;
- To ensure that everyone in the organisation has clarity about the decisions they can make, about where to go for those that they can’t, and about decisions made by others which affect them;
- To ensure that stakeholders have enough visibility of the decisions of the organisation to have confidence and trust in its management;
- To ensure that the governance structure is scaleable and adaptable (within reason) to allow for possible requirements for future change without major re-design.
Build internal governance
So where do you start? First, you need to remember that governance necessarily works top-down. The owners of what you design will be the Board members (or equivalent), and they are likely to have strong opinions – that’s almost synonymous with being a Board member! If you start your design at the bottom and work upwards, there is a high probability that some or all of the members will object to at least some aspects of it once they see how it will affect them. Trying to make modest changes to accommodate their concerns will probably undermine the essential integrity of the system, resulting in you having to start again. If bottom-up does not work, what does? The best place to start is to agree the main design principles with the Board members, before even beginning on the design itself. It is much harder for people to object if you can demonstrate that your design is consistent with the principles that they all agreed earlier, and it is much easier to keep the discussion rational when the specific outcomes are yet to be defined. It also helps to ensure that the whole design is self-consistent. It is also worth noting at this point that because governance exists to define flows of authority and accountability that need to run seamlessly from top to bottom of the organisation, a governance design project should take a joined-up top to bottom view too. A project that looks only at the top (or bottom) end is likely to require compromises which will reduce its effectiveness. The next few articles will discuss the principles which you will need to agree at the outset, under the headings listed below. Remember that governance is about finding the optimum checks and balances for your organisation. Because that depends on context, it will be different for every organisation. The way you express the logic and the principles in your own project needs to be right for your context. One size does not fit all!- Authority
- Hierarchy
- Escalation
- Ownership
- Documentation and language
Coming home from work the other day I saw a poster on the Tube which grabbed my attention. Leaving out the unnecessary details, it said
“Buy a ……, get a free …… worth £49!”
Is it really? Value, like beauty, is in the eye of the beholder. The company may choose to sell the gadget for £49 normally, but that certainly does not mean it is worth £49 to me. In fact, it almost certainly isn’t – it might be worth more, in which case even if I had to pay for it I would think I was getting a good deal (and I may well have already bought one anyway), or it is worth less, in which case I’d never buy one normally, but might be tempted to get one for nothing. It is pretty unlikely that they have hit on exactly the right value for me.
Our entire economic system is based on the idea that things have different values to different people. That is how trade works – if it were not like that, it would be impossible to make a profit on trading, so there would be no incentive to do so. I buy something because it is worth more to me to have the thing than the money. The seller sells it because they value having the money more than the thing. It may be in the trader’s interests to confuse value with price, but in the end we all make our own judgements about what something is worth to us.
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