15 November 2012

"That Sounds Risky..."

Back in June, Leslie White (Croydon Consulting) and I presented a session for ASAE's Finance and Business Operations Conference (FHRBOC). It was a simulation on risk management. We had assumed, given that it was a room full of accountants, that everyone would a common understanding of, and language around, risk.

Boy, were we wrong.


And it got us thinking: when senior teams are trying to make decisions together, do they suffer from the same problem? A lot of what we do or consider doing in associations involves the assumption (and hopefully mitigation) of risk. What if senior teams don't share an understanding of what that means? How can they even have good, open conversations?

Well, as soon as we started thinking about good, open conversations, we realized we'd want to involve Jamie Notter (Management Solutions Plus), too.

So here's what we've come to:

In today’s environment, an association’s success is contingent on its ability to make good decisions quickly. Heading in the wrong direction, or simply treading water while you try to decide, will move you further and further behind your competition. Today’s competition is tougher, and the margins are thinner, so we simply can’t afford to fumble our way through decision making.

Nowhere is this more evident than at the management team level. Here you have a group representing diverse interests that is tasked with making strategic decisions to support the whole enterprise. Yet the topic of how decisions are made (and what methods and processes would be best) is rarely tackled explicitly. Despite the imperative mentioned above, we actually do fumble our way through decision making.

As consultants, we see this problem and want to do something about it, but only if it actually makes sense to association execs, and only if we're not duplicating what other smart consultants in the association space are already doing. So we have a few questions for you.

  • What is your experience with decision making at your organization?
  • What kinds of conversations do - or don't - you have about risk?
  • If you are experiencing problems in these areas, what impact is it having on your organization? Your staff? Your relationships with your volunteer leaders?
  • Is there a need here?
  • Have you worked with somebody great who's helped you through this, where we should talk to her first or just get out of her way and let her do her work?

Short version: we think there's a problem here, we're interested in trying to figure out how we fix it, but we're not interested in trying to reinvent a wheel someone else has already done a better job creating.

What are your thoughts?

2 comments:

Sylvia Dresser said...

I see two issues here - how are decisions made, and what is the definition of risk (which could well include what are the exposures?).
Both of these issues can be influenced by the composition of the Board. I have found that business people in general have more sophisticated approaches to both of the above, based on their own experience, while some people from the non-profit sector, depending on their role, and academics have a higher level of unfamiliarity of assessing risk and figuring out how to make sound decisions quickly.
Not sure if these comments help, or just blow smoke at the issues!

Elizabeth Engel said...

Sylvia, I suspect you're probably on to something with the whole "for profits and nonprofits handle this very differently" thing. So another way to frame the question is: how do we help associations gain the expertise for-profits have with this?