LESSON 15 - Cut Your Losses

Welcome to Lessons From the Nonprofit Boardroom Blog, a 40-week journey through the new book, Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson. Each Wednesday, we're featuring a guest writer’s favorite snippet from the week's topic. George Duff is our guest blogger this week for the first of four lessons in "Part 5: Boardroom Bloopers.”

LESSON 15 OF 40 - Cut Your Losses

Is it a $30,000 baseball or not?

THE BIG IDEA FROM THE BOOK: In Lesson 15, we are reminded that—sometimes—we must “cut our losses” in the boardroom to get the meeting (and the organization) back on track.

You’ll appreciate this true story of the vintage baseball collector who had to cut his losses after purchasing a $30,000 baseball signed by Babe Ruth. One problem—“the signature was a fake.”

We’ve all observed CEOs and boards that skate too close to the edge (relationally and financially)—and yet when the facts are in, they still fail to cut their losses. It takes courage to address big mistakes as you’ll read in my commentary here. 

MY FAVORITE INSIGHTS from Lesson 15, pages 74-78: 
• John Maxwell: “The more you prepare for the meeting before the meeting, the less time you will have to spend doing damage control after the meeting. A leader never has to recover from a good start.”
• “There are times in the boardroom when we must cut our losses.”
• “The larger and more complex the issue, the greater likelihood that discussion of the topic should occur across more than one board meeting.”

MY COLOR COMMENTARY:
Before moving to Seattle from Detroit to become the president of the Greater Seattle Chamber of Commerce in 1968, I asked for a compilation of the “undones.”

At the top of the list was the issue (and the cost) of our maintaining a full-time representative and office in Washington D.C. It had been established 50 years earlier, in 1918, when Seattle and D.C. were a world apart.

Long before 1968, that world had shrunk. Our Members of Congress traveled back to Washington State frequently and their staffs had grown considerably. Assisting constituents to deal with the maze of regulatory agencies was part of their job—and no longer the Chamber’s job.

Plus, the D.C. office consumed twenty percent of the Chamber’s budget. It was not difficult for our board to figure out what to do—just difficult to do.

So we cut our losses and closed the D.C. office. Yes, there was pushback from businesses that the Chamber had helped over the years, but it eventually subsided.
It is never wrong to do the right thing, hopefully in the right way.

THIS WEEK’S QUOTES & COMMENTARY BY GEORGE DUFF:

George Duff served 27 years as the president of the Greater Seattle Chamber of Commerce. In retirement, he has served on several for-profit and nonprofit boards, including CRISTA. As the $1/year senior advisor for Christian Management Association (now CLA), George leveraged his deep appreciation for Peter Drucker’s wisdom to thousands of ministry leaders. (He re-reads The Effective Executive, by Drucker, once a year.) Jim Gwinn, retired CEO of CRISTA, profiled George’s wisdom in Chapter 24 of A Life Well Lived. Click here to read the chapter online. George, and his wife, Marilyn, continue to serve ministries in numerous ways from their home in the Seattle area.

TO-DO TODAY: 

• Identify the “undones” that still linger in your organization, perhaps due to the lack of courage to cut your losses.
• If your CEO is slow to cut your losses, inspire your board chair to address financial (and relational) issues that require action by the board. It is never wrong to do the right thing. 
  

NEXT WEDNESDAY:
On March 7, 2018, watch for Terry Stokesbary's commentary on Lesson 16, "Date Board Prospects Before You Propose Marriage. He served the shortest board term in the history of the world!"

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