Imagine that your organization is a boat, floating gently across the calm waters of community impact (yeah, right!), and that you, as the leader of the organization, are the captain of that boat. Now imagine that all of the decisions your organization has to make are cannon balls flying across the water at your boat! Should we enter a strategic partnership with another organization? Who should we hire as a development associate? What metrics should we use to evaluate our programs? What should our official media response be? The organizational decisions you make (be they financial, programmatic, strategic, or otherwise) have the potential to either keep your boat floating and making progress toward your destination, or to impede you in some way.
Some of those cannon balls (decisions), may hit your organization above the water line, meaning that if you make the wrong decision they might do some damage but will not likely sink your ship. With these, you have more room for risk-taking.
But others may hit your organization below the water line, meaning that a poor choice could ruin you. These leave very little room for risk.
As a leader or manager in your organization, one of your jobs should be to decide, and to help those who work for you understand, where exactly the water line is. Then, empower others to make decisions that are “above the water line” decisions, but to involve you in “below the water line” decisions. This is the essence of healthy delegation.
So how do you figure out your organization’s water line? You can start by having meaningful conversations, using real-world examples of decisions your organization has faced, with each of your direct reports to jointly help determine the water line. For example, with a CFO you might say that all contracts we sign and checks we write above $5,000 need to come to you for signature, and all others can be her responsibility. With a development director, you might determine that all relations with a certain set of high-impact donors need to run through you, but all other donors relationships can be owned by him and his team.
In my experience, this kind of pre-planning to set the water line only gets you so far; trial and error can more often be the most instructive influence on how you delegate. As managers, we rarely want to conduct “post mortems” on big decisions that were in hindsight not made well. But they can be wonderful learning moments, wherein you can dissect how a decision was made, whether in hindsight it was an above the water line or below the water line decision, and how that determination could be made better in the past. Such discussions with an employee can help to reset the water line going forward, and can give that employee more confidence to be able to make future decisions, or to kick them up to you.
Most nonprofits, because of the unique nature of our work and our business models, do not have a lot of room for taking risks. Our financial margins are often too thin, and the consequences of failure in terms of people’s lives and livelihood are too high. But we also tend to overcorrect out of fear, and most nonprofits we encounter have as part of their culture and practices overly-rigid decision-making and a stiflingly high risk aversion. Better understanding and clearly defining your organization’s “water line” are critical not just to effective management and employee empowerment, but also to engendering the right level of risk tolerance.