Making the Tough Financial Decisions for the Right Reason

In board rooms and executive offices almost everywhere now, leaders are forced to make tough financial decisions about the future of their organizations—what to keep, what to cut, and what opportunities to develop for their future.

Decision makers can give too much weight to factors that are easy to articulate. Our financial reports are designed to articulate return on investment. We have no trouble finding the programs, products, departments and even individuals that cost us more than they should.

Another factor that is easy to examine is whether your customers or members value something. You can look at sales, level of participation, even satisfaction surveys to assess what people value.

I just facilitated a board meeting where I did not hear enough people able to articulate the factors that should matter most in these tough financial decisions. What is your vision for your organization? What do you want to be best in the world at and for whom?

Without a compelling vision, you have no idea how much weight to give to the project that is simply nice to do and the one that will take you where you want to be. If you can’t invest your resources in becoming best at the things that matter most to you, you have no focused strategy to get the important work done. And if you don’t know who matters most to your future, you will waste your effort on people who are probably more vested in preserving their past.

Financial decisions are always tough and frustrating. They are a lot less frustrating for people who agree on an outcome more powerful and unifying than how much money needs to be cut.