In the McKinsey & Company podcast series “Inside the Strategy Room”, the March episode focuses on the topic of decision making in the boardroom and what the pandemic has taught directors about high-consequence, low-probability decisions.
Covid-19 has introduced more uncertainty and less time to evaluate decision alternatives for most organisations. Under these circumstances, it becomes ever more important to have well functioning principles and tools to speed up decision processes without compromising decision quality. In the 12 March 2021 pod cast episode (transcript), current and former McKinsey partners, experts and board executives share the following main experiences:
- It is more vital than ever to engage on the right decisions and spend less board time on formalities.
- It is necessary to meet more often and to bring in experts to raise the quality of the debate and provide insight into the consideration of multiple options.
- Boards should have more involvement in unlikely outcomes with large consequences – positive or negative.
- Communication between management and the board should be more frequent, nourishing a relationship where management values the board’s engagement and advise.
Two of the participants also co-authored an article published in March 2020 about decision making in uncertain times, where they introduced five principles for leaders to follow in order to make bold decisions quickly in these uncertain times.
The article and the podcast discussion raise important issues and suggestions related to management and board decisions to which we entirely agree.
The effectiveness of the proposed principles and best practices can be further increased by also using simple tools to visualise decision alternatives and associated risks.
We have hands-on experience on how tools like dNodes.io can be used interactively in executive meetings, ensuring that all decision makers have the same visual picture of the alternatives at hand, as well as an aligned understanding of the risks and outcomes.
Such tools and processes becomes more crucial when decisions are complex and time is short, such as during the Covid-19 pandemic.