Better done than perfect

In this podcast episode, you will hear:

Former Chairman of PostFinance and chairman and member of several other boards, Prof. Dr. Rolf Watter, discusses doing things well rather than perfectly, and the value of expanding one’s horizons through new experiences. Prof. Dr. Watter explains that, in his experience, it has always proven to be better to make a decision, even based on imperfect information, than to wait. One of Europe's leading M&A practitioners, and a Partner at the Swiss law firm Bär & Karrer, Prof. Dr. Watter was Chairman of PostFinance, and several other boards. Here are some of the topics covered in this podcast that will help you improve your decision-making as well as gain a better understanding of the board experience: 

• Why swift decision-making is so important
• The role of a chairman and a board member, and the lessons learnt from an entire career of decision-making
• Expert advice on mergers and acquisitions (M&A) 
• Insights on leadership, the changing nature of leadership, and on diversity.

Doing things better rather than perfect with Prof. Dr. Rolf Watter

Why swift decision-making is so important

"Not every decision that is controversial is important. And not every important decision is controversial. [...] In any decision situation, you basically have a set of facts in front of you which in reality are hardly ever really clear. And in my experience, at least, many people have a tendency to say, we need more facts, we need to explore this. We need to dig deeper before making a decision.

In my experience, it's always proven better to take a decision, even though the facts or the basis of the decision is not certain. And typically, when you wait a week or two or even a month or two until everything is clear, at best you might have missed quite a bit in whatever you're doing. And that's why it is really my firm belief that you need to take the risk to make decisions based on uncertain facts, even though that decision might be less perfect than the decision you take two or three months later."

The role of a chairman and a board member

It's difficult as a board member, isn't it, when you've got imperfect knowledge and don't have intimate involvement with the business to voice your discomfort with maybe some big strategic plan or even a small decision, isn't it? It's difficult to be the dissenting voice?

"As an executive board member it often is indeed. The fact that the management, which will typically be supporting the plan, because you typically speak about the plan of management, they, of course, know ten times more than you do about the business. Very often you actually risk making a fool out of yourself as a board member because you simply do not have the knowledge level that management has.

If you as a board member, use examples you made elsewhere in a totally different industry, in a different environment. And you might then sort of take a position or voice your concerns saying, you know, I might not understand all the details here, but in this instance, I have seen a similar plan go wrong for reasons A, B, C. Why do you think this is not a problem in your plan? That's an approach which I have found in the past to work much better. [...]

The role of a chairman basically is to first work with management on establishing such a plan, pointing out areas where the plan might not be ambitious enough, and then basically bring this plan together with management to the entire board where other elements will surface. [...] So in the board, you then basically need to to bring all these views to the table and hopefully redefine this plan or adjust the plan that management has presented. But still in a way which then helps management to implement this plan."

Expert advice on mergers and acquisitions (M&A)

"You can probably distinguish two big problem factors. The one is in choosing the merger partner, that might be a good or a bad decision. You only know afterwards typically, but it's at least as important as the implementation phase in many transactions. Many people believe once the transaction is announced, it's over. The reality is that the real work only starts, and it's in that phase that I think most errors are committed. [...] I believe in order to have a good integration, you basically need to make it very clear who is in charge of the combined entity afterwards.

I think one very important thing, which is repeated very often, is that you should not fall in love with a target that you see in front of you."

Insights on leadership and on diversity

"I personally believe that a leader acting as part of the team is probably much more important nowadays than 15 or 20 years ago. And I also believe that it is important, for instance, for a non-executive board to make sure that the CEO does not take all decisions basically by himself. [...]

I think that that's totally undisputable, that this leads to better decisions, but it's very important not only gender diversity. Diversity means coming from different cultural backgrounds, different geographical backgrounds, maybe different interest groups. So you need to have somebody on board, for instance, who can take the customer's view. You need to have somebody who knows how the supply chain works. You need to have somebody who has a good handle on employee relationships. This type of diversity is very important in my view. [...]

I believe in order to be a good leader, it's incredibly important to have as broad a background and as broad an experience base as you possibly can. It's also important, if you're in business, do not stay in one place, do many, many different things, do sports, play music. That's as important as spending 20 hours a day in the office."

Recommended

• Strategic decision making and its role in today's management
• Effective decision-making: Understanding and optimising its role in modern business

Rolf Watter

About the author

Prof. Dr. iur. Rolf Watter is is an award-winning lawyer in M&A transactions with additional expertise in corporate governance and capital market transactions. He works as law professor at the University of Zürich and is partner at the renowned Swiss law firm Bär & Karrer.