Principle Based Management™ (PBM), formerly known as Market-Based Management®, provides a holistic approach to making decisions, solving problems, and creating value for individuals in your community, team members in your organization, and society at large. In this PBM 101 series, we’re unpacking mental models, ideas, and tools that can help you reach the next level in your work.
What should you do if you have a clear vision for what your organization should achieve—but you aren’t sure how your daily decisions connect to that bigger picture?
First of all: embrace that you’re not alone. Every nonprofit leader struggles to balance daily operations with their grander objectives.
It gets even harder as your organization grows. With every new hire and volunteer, you need to figure out a way to ensure that everyone is empowered to make decisions that align with the organizational vision. It’s critical to remember that executives’ decisions aren’t the only ones that matter. The sum of your whole team’s decision-making will either drive you forward or hold you back.
Sometimes, these decisions involve things like time management: “How should we prioritize tasks to have the maximum impact today?” Other times, they include major strategic questions: “Should we launch this new program or not?”
In Principle Based Management™ (formerly Market-Based Management®), decisions are simply a means to an end: long-term value creation. Every choice should help your organization add value—in small ways that add up over time, or in major ways that have an immediate impact.
To maximize value creation, many leaders find it helpful to organize their thinking into a repeatable and scalable process. The Decision-Making Framework (DMF) is just that sort of tool.
The DMF includes eight elements. At Stand Together Foundation, we advise nonprofit leaders to consider all eight of these elements for every decision, and then incorporate the elements that make the most sense based on the nature of that particular decision.
If you’re looking for a consistent framework at your own organization, share these eight steps with your team. Then practice integrating them into your next decision-making conversation.
1: Define the opportunity or problem
What, specifically, are you trying to decide?
2: Clarify your objectives
What does success look like?
3: Determine viability
How valuable is the opportunity? Should it be your top priority?
4: Develop a range of alternatives
Brainstorm a wide range of possible alternatives—be creative and think beyond the obvious.
5: Analyze the alternatives
Consider the full range of possible outcomes. Consider the pros/benefits/positives and cons/difficulties/obstacles of each solid alternative.
6: Select the best alternative
Consider the best alternative. There are no perfect solutions, but you should have a clear idea of which alternative you believe will generate the most value.
7: Determine next steps
Identify what must happen to turn your solution into a reality.
8: Communicate and seek approvals
Get feedback early and often. Seek input from others and include those who will need to approve the decision.