Making decisions. Management, especially strong financial management, is all about making decisions. I have learned that the best decisions are based on a strong understand of P.O.L.C.
Each of these pages goes into more detail about my overall philosophy on effective management, it goes without saying that auditing taught me how to make effective decisions with limited information. Auditing is the art and act of listening; that is, asking questions and really listening to the answers. You learn that, oftentimes, what isn’t said is more important than what is. By effectively listening, problems – and opportunities – can be brought to the forefront and acted upon.
Managing well is a 360 degree issue. It requires you to understand the world around you and how it interacts with your decisions. And of all the tools I have learned over the years, the best by far, for me, is SMEAC. SMEAC is the rubric for operational orders (decisions) taught to me by the United States Marine Corps. SMEAC stands for
- Command and Signals
The best written plan is nothing but wasted trees if the current situation is not taken into consideration. Understanding the situation puts the mission (planning) into context. Administration ensures that you are effectively organized and know how others will support you. Command is all about understanding how changes will be communicated to everyone and is based upon control. All to enable you and your team to execute on the plan.
This isn’t to say that business should be run like a military unit. In many cases, business units need to be free to make decisions; but those decisions need to be evaluated as to their impact on the organization as a whole. Take for example, a current non-profit with whom I am consulting. This organization has their mission embedded into their bylaws. But the board is now being asked by management to decide upon spending money which may be outside their mission. What should the board do?
My approach was to evaluate this plan based upon the existing mission. This non-profits mission was set based upon the board’s determination of the situation. Has the situation changed? Has an existing player in that area left the market, leaving a hole we can safely fill? What of our current promises to our funding sources, will they be positively or negatively impacted? What will this new mission take in terms of resources and expertise? By trying to get answers the board can evaluate if a change in the plan is appropriate or if some other steps should be taken. While the challenge is that management feels passionate about this potential new role and the board wants to support management, the reality is that any new venture must be evaluated to ensure it fits within the abilities and resources of the organization.