Friday, February 27, 2009

Business is not a Democracy!

Several years ago, the reprographics company I was then with hired a "management consulting" firm to help our management team better "understand" how to manage our company. Was hiring that management consulting firm a good use of the company's money or a useless, wasteful exercise in futility? Well, the answer to that question depended on the perspective of each individual on our management team. For some, especially for those who did not have the opportunity to go to college (and take courses in business and business management) or the opportunity to work for any other company before they joined ours, I guess it was a worthwhile investment. But, for others (I'm in this latter group, which may be a group of one, i.e., just me!), it was a complete was of time, effort and money.

One of the issues our consultant raised was the issue of "consensus decision making" - keyword, consensus. Get a group of management team members together, discuss an issue, take a vote on what to do, how to proceed on that issue, and, then, after the decision is made, everyone on the team is supposed to support (and stand behind) the decision that the group made. Even if the decision is completely off-base, stupid, dumb, not-thinking, baseless! While group discussion and debate should be a part of any business' planning function - for two heads (or more) are always better than one when airing-out, debating, issues, BUSINESS IS NOT A DEMOCRACY! I have a smart young man (not me, I'm neither smart nor young) to thank for that answer.

Regardless of the size of the group invited to discuss and debate a matter or issue, one person, repeat, one person, has to have the final say .... and the right to overrule the decision that the group came up with. In some companies, that's the role of the CEO and in others that's the role of the COO. Regarding the formation of groups (invitations to debate and discuss issues) it is certainly (and, I think vitally) important that those who participate must be subject matter experts (or, through tons of homework and study about the business and industry, be working hard towards becoming subject matter experts), for, if some participants have little or no subject matter expertise, what's the point of allowing them to debate in the first place.

At this particular company, we had "outsiders" among the individuals on our Board of Directors, one of whom was a Harvard Business School MBA grad (a brilliant young man.) At a break during one of our B of D meetings, I asked him, "what do you do when you are the leader in a room of people and your people vote and come up with the wrong decision" (vis a vis "consensus decision making"). His response, "Joel, business is not a democracy. When you know the group came up with the wrong decision, the boss has to step in and say 'no, that's wrong, thank you for contributing, but here's what we're going to do.'"

There is an old saying that, I think, well applies here. It's the old saying that "the buck stops here." While leaders should invite and value the opinions of those on their management teams, one person has to make the final decision. Therefore, the idea of consensus decision making, while it might sound like a cool thing, is pure B.S.

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