Our “Next-Level” Answer

Your Distilled “Next Level” Action Points For “Next Level” Success.

Reduce leadership errors of omission and commission:

  1. Educate yourself and other leaders on differences between errors in commission and omission.
  2. Identify for you, your leaders, and company, the relative risks of each.  Typical  errors with a high cost of omission including skimping on R&D, new sales pipeline efforts, and compliance issues with large monetary or reputational consequences.  Typical errors with high cost of commission are hiring the wrong key person (CFO, Head of Sales or Operations, making a major investment).
  3. As a leader, influence how the leadership business action discussion flows (based upon the type of error and its’ likely cost of error–and benefit).  Have your Board and Leadership weigh in on whether the decision merits more or less unanimity or whether, after discussing, it warrants leaving to the line leader ultimately responsible but with the benefit of the discussion and further action items.   Decide when there business decisions warrant high consensus.
  4. Use a “Next Level” Advisory (or Governance) Board which can focus and enhance a discussion of better results through less commission and omission errors, providing multiple useful viewpoints not organic to the leadership team or current governance board  & which are effective in both reducing errors in omission and errors in commission for better “Next Level” results.

A CEO, Board, and Company Leadership  Article Discussion

In,  When Consensus Hurts the Company, Felipe Csaszar (Ross School of Business, U. of Michigan) and Alfredo Enrione (ESE Business School, U. de los Andes) (2015, MIT Sloan Management Review), the authors examine the statistically validated research of one of them concerning errors of each of omission and commission by mutual fund managers and funds performance over time based upon the results of investment decision criteria (e.g. unanimity of fund company management, delegation to individual fund managers) over time.

Funds which required complete consensus tended to miss opportunities, Funds with decisions delegated to individual managers tended to make mistakes by instead choosing ones which performed poorly.  The authors conclude that leaders should both be aware of and educate subordinate leaders about types of errors and techniques to minimize, as well as moderate and influence discussions requiring decisions affected by either.  (These techniques including such actions as determining who goes first in a board or leadership discussion in order to anchor a discussion or perspective, and whether to, after discussing, send the problem for further investigation to a selected team or whether to delegate the decision, as I referenced, to the responsible leader.)  https://shop.sloanreview.mit.edu/cart

But are boards necessary for better results for all companies? I’ll address this question in my next “Next Level” CEO, Board, Leader Point.

Take Time Now to Discuss a “Next Level” Advisory Board for your company?
Call  312-543-4855; Bill Hubbard.

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