Father Sez

From and to parents - parental advice to our children on personal financial management and life.
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Posts Tagged ‘consultative decision making’

Does your family make consultative decisions on major issues?

Wednesday, February 4th, 2009

Last week, I had a meeting with a person who had, in the last few years, built up a fair sized oil palm plantation. My family also has a piece of land not far from his plantation and the meeting was on a possible collaboration. During the course of the discussions, I mentioned that once he had made his written offer, I would have to discuss it with my “partners” and only then could I revert to him. Later I told him that my partners were my wife and my 2 elder girls.  

He expressed surprise and told me about how he single-handedly made decisions in his company. (He had earlier told me his two sons were involved in his business.)  The thing did not work out and on the way back I mulled over what he had said about decision making.  

Many years ago, I read an article in the Accountancy magazine about the pros and cons of companies that made their moves based on the decisions of one person as compared against companies that depended on checks and balances in their decision making. The article concluded that whilst those single driver kind of companies moved fast and were agile, they ran the grave risk of making that one fatal mistake that would sink them forever.  

This statement has stuck in my mind all these years. 

My wife and I have long decided that major financial decisions should be jointly discussed. Our two elder girls are also directors of the family company and I often inform them and seek their views. It has nothing to do with shareholdings or the like; its just that such consultations make plain common sense.  My daughters and wife may have a point of view that I had not thought about. They may have knowledge that might be very relevant to the issue at hand. And I have absolutely nothing to lose by consulting them. Not even pride! 

One of my former bosses had a policy. To every money decision that anybody insisted that he should make on the spot, his answer would always be “no”.  

I have many examples of personal bad decisions I have made without serious thought or consultations. I have thrown away that habit for good now. After all I am not an open heart surgeon or a elite commando who might have to make such decisions as part of their normal day. 

Consultative decision making does not have to involve lengthly meetings and pages and pages of minutes. It may be just a tea time talk or a five minutes kind of thing. I would wager that a normal person’s life seldom, if ever, involve having to make a split second decision.  

I urge my two elder girls to practice this. So far they have consulted their mother or me in their major decisions. I suppose a time will soon come where parents might not be their choice of sounding boards. Still I urge them to seek someone out and most probably a better decision would be made.

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