A 4-part framework for making decisions in uncertain times
From Michael J. Tomlinson (MT), CEO and President, BDI
“On an important decision one rarely has 100% of the information needed for a good decision no matter how much one spends or how long one waits.” – Robert K. Greenleaf, The Servant as Leader
In my 25+ years as an executive leader, I’ve noticed a common concern among my colleagues in leadership, regardless of their industry: How do we ensure that our decisions result in the long-term success and well-being of the organizations we’ve been entrusted to lead?
As I’ve discussed at length in previous articles, today’s leaders must be visionary, understood, courageous and agile (VUCA) to navigate the volatility we face, whether from an uncertain economy, geopolitical tensions, sociological and cultural shifts, or some other force we have yet to experience.
In VUCA times like these, making the “right” decision on behalf of our organizations becomes even more nuanced and challenging. BDI Board Chair Dr. John Reynolds has said, “The luxury of being able to wait for every aspect of information to be available before a decision is made is no longer feasible or practical. Waiting often leads to decision inertia (no decisions ever being made).”
So, what’s a leader to do? Dr. Reynolds has identified seven key disciplines that resilient leaders must focus on today. We’ve looked at Discipline 1: Thoughtful Communication, and how speaking well and accurately communicating our ideas is foundational to any leader’s success.
Now, let’s take a look at Discipline 2: Imperfect Decision-Making.
Drawing from a model developed in 1999 by Dave Snowden, who served in IBM’s Global Services, Dr. Reynolds suggests a 4-part framework for decision-making in uncertain times: (1) Clear, (2) Complicated, (3) Complex and (4) Chaotic.
Decision-Making Context #1: Clear
John describes a clear context (also called “Obvious”) as one that “is tightly constrained with little flexibility and most leaders would make the same decision. You know you need to make the decision, you know what the solution is and you respond. These decisions are comparable with ‘Best practice.’”
These kinds of clear decisions could be those that you are accustomed to making daily (e.g., giving your stamp of approval on the latest ad copy or design), or where there are few to no risk factors (e.g., picking up the phone to thank a major donor for their support).
The decisions we make as leaders, however, especially in VUCA times like these, are rarely so obvious and clear.
Decision-Making Context #2: Complicated
Good decision-making requires analyzing all data available to you at any given time to make a well-educated and informed decision. But what if you don’t have the analysis necessary to make a critical decision?
In this “Complicated” context, John explains, “There are governing constraints, interacting knowledge points, and it is not as simple to just execute without more analysis. A decision is needed, but not before more analysis is completed. The key principle in this situation is that although there are general best practices, this decision has enough nuance that analysis is still required. The leader’s discipline is not to wait for 100% perfection in the analysis, but make what might be considered an ‘imperfect’ decision, having enough information that is good enough to get the job done.”
Call it “imperfect decision-making” or choosing “progress over perfection,” resilient leaders know that making a decision, even an imperfect one, is critical to moving forward in reaching their strategic goals.
Here are some examples of imperfect decision-making in this “complicated” context:
- Approving a new fiscal year budget, based on your best (but limited) knowledge of donor behavior and how many donors you will retain in the next giving season.
- Choosing to hire a new team member to help grow your Development Department, although your best candidate is new to fundraising, but has an impressive resume of experience in other industries.
Decision-Making Context #3: Complex
Now we move into the decision-making domains where choosing begins to feel uncomfortable.
John describes this “complex” situation as one where “influencing parameters (constraints) to a decision are not as obvious. The leader’s question may be something like, ‘What is the root issue we are looking at here to analyze?’ The situation has more complexity than previous experience. There may even be complex scenarios where the leader is not even sure of what the problem really is to be decided on.”
These nuances make it necessary to dig a little deeper before deciding. You might initiate a comparative analysis to draw on the wisdom of others who’ve gone before you.
However, according to John, when you have no similar organizations or industries to look to for help, “This process may actually lead to an emerging or new practice for the future. This is the domain many organizational leaders find themselves in today as the world emerges from the chaotic decision-making of the pandemic years.”
Many decisions BDI’s executive leadership team has faced in the post-pandemic years have fallen into this “complex” category. We have been blessed to have like-minded, mission-driven colleagues within our reach to call on. For example, our conversations with Dunham+Company have encouraged us to make wise decisions to ensure our agency is equipped for growth, and will be able to make a greater impact as we serve our client partners in the years to come.
BDI’s Board also provides strategic guidance to help with these complex decisions our agency experiences. By drawing on the wisdom and experience of our Board Members who have served in diverse organizations, we are able to plan a path forward, even when the territory has previously been uncharted. Engaging your Board is essential to making good decisions, especially when conditions are imperfect.
Decision-Making Context #4: Chaotic
Today, we stand at a new trailhead of philanthropy where the old paths we’ve followed to our journey’s end won’t work for the foreseeable future. Giving to religious-affiliated nonprofits continues to fall. Individual giving is down. Social volatility continues to threaten commitments (including commitments to charitable giving) that once felt strong.
When it comes to decision-making in this current climate, John says, “Chaotic is the world we have been living in for the last two years… Leaders have had to act, and to act fast. New practices have been developed and in many cases those fast decisions have been so successful that they are today institutionalized (think working from home). Perhaps the learning from these last 22 months is that most of the decisions made without all the information normally available were not so bad after all?”
As a leader, I find John’s question fascinating. Think of all the decisions our teams made in March 2020 for example. To work at the office or to work from home? To extend office closures one more week… a month… or longer? To invest in new technology that made virtual meetings easier… for how long?
At BDI, our executive leadership team has kept a close eye on the headlines and latest guidance from public health officials (that has changed often, and has often contradicted previous guidelines!). Although we didn’t always have all the information possible, the big decision we made to move our team to a fully remote, and then hybrid work environment, has proved to be beneficial not only during the pandemic, but beyond it.
Teams are efficient and innovative as ever. Overhead costs have been reduced. Employee wellness has been prioritized. This “chaotic” decision has resulted in a new norm for our team and increased flexibility and capacity in our work.
Imperfect Decision-Making in VUCA Times
As we look to the future, Dr. Reynolds forecasts that “Decision-making for leaders is transitioning from chaotic/complex to complicated both at a global level, and as leaders strategize for the future.”
Leaders have pivoted, from making decisions based on a wealth of information, to learning how to lead well and discern the right course of action with the information you do have.
“The question for the VUCA leader,” John says, “will be ‘Do you have enough information, even though it is not 100% of what you historically expected?’ In VUCA times this is the new discipline leaders will have to master.”
To John’s conclusion I will add this encouragement: Leaders, you do not have to make these hard decisions alone.
These imperfect decisions- are being felt by leaders in both nonprofit and for-profit fields, and yet, we are still making wise decisions to move our organizations forward. The courage and authentic leadership required to make these decisions are two areas we as executive leaders must focus on in challenging times to truly thrive.
May we lean on one another in these uncertain times, sharing our wisdom and experience that can help our organizations press forward for greater impact. We’ll talk more about this as our series on Resilient Leadership continues with Discipline 3: Networking and Collaboration.
“Two are better than one, because they have a good return for their labor: If either of them falls down, one can help the other up.” – Ecclesiastes 4:9-10