Many of the problems that boards are faced with involve decision making under uncertainty. Rarely do we have the kind of perfect information that would allow us to predict with complete confidence what the outcome of our decision will be. Most of the time, it’s impossible to know that the facts we’re relying on are 100% certain.
To help decision makers reduce the uncertainty of the information at hand, business schools teach graduate courses on assigning probabilities to decision factors and likely outcomes. (Personally, I didn’t care for that course, but I managed to get through it anyway.)
What I do take forward into my work as a director is the need to try to reduce the ambiguity that comes with less than stellar management reports, presentations, and pitches for big project approvals.
This week our local newspaper carried the story of one board’s failure to properly assess the risk of cost overruns associated with a major IT project. The costs soared from an approved $89 million to nearly $300 million, apparently due to the failure of consultants to adequately scope the project requirements.
In my humble opinion, blaming the consultants is a great example of abdicating responsibility. And, since the board in question is that of a government crown corporation, we can assume that an important criterion for selection was likely being the lowest cost bidder.
Sometimes you really do get what you pay for.
This week, The Savvy Director is focusing on what we, as directors, can do to increase our confidence level in the information and opinions we receive in the boardroom, by using clarifying questions to address not only the facts in front of us, but also those that are missing.
By having a clear understanding of the facts at hand, the risks to be considered, and what people’s words really mean, your board team will be equipped to make better decisions.
For you personally, if you’re the director asking a clarifying question, you’ll be helping others who may be experiencing the same fuzziness with the facts as presented.
And you’ll gain the clarity you seek without confrontation.
Remember when your kids were really young and they - or other young children you might know - were full of questions? But as soon as they started school, they were rewarded more for having answers than for asking questions. That continues beyond school right into the workplace. As a result, our questioning decreases as we grow older, and that has a detrimental effect on decision making.
Relearning the art of asking questions represents a huge opportunity for boards, where directors can sometimes be critical of their colleagues who remain silent during meetings.
For directors who are still finding their voice in the boardroom, or who are reluctant to speak up for whatever reason, asking a clarifying question can feel like a safe way to make a contribution.
Clarifying questions are asked when something is unclear or hard to understand. People ask clarifying questions to avoid confusion or misunderstanding. They’re not particularly useful as a way to probe, challenge, or open up new avenues of discussion.
Don’t get me wrong. Probing, challenging, and catalytic questions all have their place in the boardroom. For example, probing questions like Why do you think this is the case? or What sort of impact do you think …? are intended to help the speaker think more deeply about the issue at hand.
So, when asking a question, try to be deliberate about the purpose behind it and what you’re trying to accomplish. The obvious purpose of a clarifying question is to reduce misunderstanding by ensuring that the listener's understanding of what the speaker has said is correct. It’s especially important in situations when the information is difficult in some way. Just a few examples are sensitive HR issues, specialized items in the financial statements, complicated IT projects, or complex reports on any matter.
But clarification also serves another purpose, and that’s to reassure the speaker that the listener is genuinely interested in what they have to say and is attempting to fully understand it. Clarifying questions tend to arouse less defensiveness in the speaker, especially if the questioner remembers to mind their tone of voice and style of delivery, to minimize potential resistance to the query.
Clarification during a boardroom discussion also helps to reduce those parking lot conversations and post-meeting email exchanges that try to sort out what was really decided at the meeting. For instance, I’ve seen brilliant examples where a savvy director asks a clarifying question for the benefit of others in the boardroom who are hesitant to speak up, even though they themselves had a clear understanding of the matter. For the collaborative leader within you, it just makes sense to ensure everyone is on the same page before making a decision.
There are two types of clarifying questions – open and closed. Which kind to use depends on the situation.
One particular kind of clarifying question is to zero in on a specific word or phrase – one whose meaning is fuzzy - and ask for it to be quantified. Examples of words with fuzzy meanings include frequency-type words like often, sometimes, occasionally, and seldom. They’re fuzzy because there’s a wide range of meanings or interpretations that people attach to them. Pinning down the meaning helps get everyone on the same page.
Fuzzy Meanings = Fuzzy Results.
Clarifying questions in the boardroom can also be used to bring unspoken assumptions to the surface. As we discussed in a previous Savvy Director blog, Don’t Believe Everything You Think, clarifying assumptions is a crucial step in good decision-making.
Directors have a duty to perform due diligence when considering matters before the board. That means we want to ‘trust but clarify’ the facts as presented for all concerned.
Ideally, as a board, we want to be able to look back at our work for the year and believe we made the best possible decisions for the benefit of those we serve.
As directors, we’re entitled to have complete and accurate information on which to base our decisions. Asking clarifying questions like the following examples will allow us to feel comfortable that we fully understand the information at hand.
Clarifying questions work best when combined with active listening. Our biases often cause us to hear only what we want to hear. Gaining clarity right away by asking a follow-up question to yours or another’s query keeps you engaged beyond your initial bias, and may offer an alternate view that leads to a better decision.
For effective communication, it’s essential that a listener and a speaker both have the same understanding of the discussion. Reflecting, clarifying, and summarizing are tools used by active listeners to enable them to demonstrate understanding and encourage a speaker to talk openly.
The best clarifying questions require self-discipline and a fair bit of practice. Many times, people find it challenging to avoid sneaking in a personal opinion or going off on a tangent. Notice how the examples we listed above are free from personal opinion. As a director asking a clarifying question, keep in mind that your objective is to help reach clarity for yourself and for all involved – not to tell a story or air a grievance.
In the boardroom, there are broad benefits achieved when directors ask clarifying questions. This kind of questioning plays a powerful role in continuous learning, robust decision-making, and conflict resolution. It invites new information, gets everyone on the same page, and helps the board avoid Groupthink. It not only enhances understanding, it helps frame problems, generate solutions, and improve outcomes.
Last, but far from least, when posed in a conflict situation, clarifying questions help build trust.
Sometimes all you need is to make a simple statement like, “Please tell us more about that …” It’s often better to ask someone to clarify a position than to explain it. You don’t need the whole story all over again, just the part required to gain clarity and understanding.
A short clarifying question can provide you - and others - with the missing link to be more confident in your position on the decision you’re making. It allows you to make a valuable contribution to the board, adding clarity and common understanding of the information in front of you. And the insight that you demonstrate by asking a clarifying question gives you influence as a director.
In the context of DirectorPrep’s Six Habits of the Savvy Director, asking clarifying questions for everyone’s benefit is a good example of both Habit #3 – Ask Great Questions and Habit #4 – Collaborate with Others.
Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online hub with hundreds of guideline questions and resources to help directors prepare for their board role.
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