ARE YOU SELECTING OR ELECTING?

You can tell a lot about companies by watching how they make decisions.

‍

Clear, decisive, accountable leadership nearly always leads to better results, but over time, many organizations leave this behind.

‍

In my decades of business experience, I have seen inside a lot of different companies. The bigger they are, the more likely they are to fall into a trap. You might call this trap decision-by-committee, or deciding by election.

‍

In a committee, everybody contributes, but nobody is ultimately responsible for the outcome. This makes it less likely that committee members will go the extra mile to explore creative solutions, look for hidden risks, or stake their personal capital on an alternative approach.

‍

This kind of decision-making environment can be more “political” and often leads to a kind of risk-averse mediocrity. Nobody wants to rock the boat, so the committee will usually go with a safe option. Over time, this erodes a team’s belief that it can do big things.

‍

The low-risk option isn’t always the best one. For a high performance team, it’s much more important to maintain a can-do culture and a clear sense of accountability. This does not mean that nobody can ever make a mistake, but it’s much harder to learn from a mistake if nobody feels responsible for it.

‍

As a business leader, I am constantly thinking about how to bring out the best in my colleagues. It’s clear to me that at Alliance, we must always have accountability and clarity into roles and responsibilities.

‍

This starts with me. As CEO, I am accountable to our investors for responsible stewardship of their capital. I never forget that I have to deliver for them. This is one more reason why I can’t stop thinking about how my leadership affects the rest of the company.

‍

To produce good results, my whole team needs to be highly disciplined about our deals. We have a rigorously defined due diligence process, which we regularly review for possible improvements. Before we pull the trigger on any deal, we will have addressed everything we can think of, with crystal clarity into who is responsible for which pieces.

‍

Clear ownership of outputs is a fundamental principle of how Alliance runs. We use committees to solicit input, feedback, and new ideas, but for every decision, there must be one accountable decider.

‍

Leaders make active selections, rather than passive elections. This is a core part of Alliance’s culture. Whether it’s hiring choices, setting a portfolio strategy, or any other important decision, Alliance embraces responsibility and accountability.

‍