Several years ago, TASC was faced with the kind of decision we don’t encounter every day.
It concerned a regulation that left a lot of room for interpretation. We wanted to act in a way that would bring the most benefit to our customers. And we saw a lot of potential upside to going in a certain direction. But there was also a potential downside. The best course of action just wasn’t clear.
What was clear, however, was that our usual decision-making process wouldn’t cut it. Navigating this “Gray Area” required a more innovative approach. We had to weigh risk and benefit, consider how we would position our decision to stakeholders and others, and more.
After a lot of thinking about this challenge, I came up with a short list of questions to help guide us. These proved so valuable that from that point forward they became ingrained as part of the TASC process for making what I termed “gray area decisions.”
So imagine my surprise when recently I discovered a book that recommended a nearly identical approach. In Managing in the Gray: 5 Timeless Questions for Resolving Your Toughest Problems at Work, Joseph L. Badaracco, a professor of business ethics at Harvard Business School, explains how the right questions can help CEOs and other business leaders navigate tricky terrain where it seems every possible decision is potentially problematical.
Badaracco confirmed my belief that working through gray area problems requires us to go beyond traditional business thinking and to wrestle with “hard profound insights about human nature, our common life together, and what counts as a good life.”
His first question, “What are the net consequences?” asks leaders to consider which decision would promote “the greatest happiness for the greatest number of people.” To do that, we have to understand our own limitations. When it comes to a gray area problem, no one can “quickly see” how things will play out or “the full consequences of a complex, uncertain decision.” We have to put aside our impulse to “forecast the future” and focus on process. That involves getting the right people in the room and banishing both groupthink and bossthink.
Many CEOs and business owners might be tempted to answer Badarraco’s second question—“What are my core obligations?”—with a single word: “profitability.” But the author insists (and I agree) that it’s essential to be able to look hard at the economics involved and past them. The same applies to your concern for stakeholders. The picture needs to be bigger. Maybe there’s something wrong that you feel needs to be addressed. How about the perspective of someone on the outside? Is there a decision outsiders might find extremely objectionable, even hateful? This question is all about examining your obligations not only as a business executive but also as a human being. All the while we need to remind ourselves that we’re not doing this exercise for its own sake. Our objective is to gain actionable insights.
Question three is “What will work in the World.” This is about realism and pragmatism. That includes recognizing that while most of the people around you are “solid citizens,” you could well run up against the “brilliantly devious” and “inept and confused.” You have to look honestly at the self-interest of all concerned (yourself included). You also have to ask how resilient you and your plan will be in the face of pushback or controversy. You want to stay flexible, but also be willing to play “hardball,” even if you’d prefer not to.
“Who are we?” is the author’s fourth question. This is another way of asking: “Is it Defensible?” In short, can you stand up before a group of people and defend your decision with conviction and in a way that’s consistent with your values both as a company and an individual?
Badaracco’s last question is “What can I live with?” This acknowledges that your best possible option might not be ideal. What can you live with as a leader? As a manager? As a person? “Gray area problems,” writes the author, “…test competence and character. They are the intersection of work and life.” Although to this point you have been working collaboratively with your team, you will probably find it valuable to spend time alone, examining your answers to the previous questions. Then you “make the decision, explain it, and move ahead.”
I’m convinced that business leaders can benefit from this kind of process. Policy makers probably could as well. Many of our most pressing social and political problems are gray area challenges. The first step in finding answers could be asking the right questions.
