FOREWORD In all my undertakings, | have made it a point to see to it that all the factors necessary to make an informed decision, are on hand. | have also factored in all the possible problems that may arise even before a decision is made, and ensured that all necessary steps are taken to prevent these problems from arising. As the number of concerns | have had to attend to increased through the years, much as | had wanted to, | no longer had the time to personally go over voluminous documents nor carry out all the research work personally. That is why I had to, as all good executives have to, delegate this work to my management staff. However, I have ensured that the standards | set in making a decision — thoroughness, due diligence, in short, completed staff work, are met. The standards set in completed staff work, and the culture it builds in an organization through continuous use, have been proven to lead to good decisions and to avoid potential problems. This book on Completed Staff Work, by Dr. Leonora Vasquez-De Jesus and Dr. Benjamin Espiritu is a concrete step to helping improve governance and management processes whether it be in business, government, or any other organization. It is a solid contribution to governance and management literature. More importantly, if the Processes mentioned in the book are followed, thus, leading to good decisions, it will directly or indirectly, redound to the nation's good Congratulations to the authors and may the culture of completed staff work spread! HENRY SY, Founder and Chal . SM Group of CompaniesTABLE OF CONTENTS Chapter 3. The CSW Study... 2... 9 Chapter 4 Statement of the Problem or Issue... 14 Chapter § Background of the Study... 16 Chapter 6 Analysis of the Problem 21 Chapter 7 Conclusion and Recommendation of the Chapter & Annexes, Action Documents, andthe Final Testfor CSW a Chapter 9 Communication and Monitori Appendix Examples of Completed Staff Work Bibliography xCHAPTER 1 oo The Need for Completed Staff Work Introduction Board directors/trustees and managers of organizations, whether they be in the private or public (government) sector, make decisions based on information they have at hand. In.an ideal situation, the board directors and the managers would have all the information they require, submitted to them early so as to give them enough time to make a thorough and careful evaluation of the problem or issue requiring a solution and decision. However, not all situations are ideal. In many instances, the information is not available, or is incomplete, or worse, wrong. In other instances, the information is given without sufficient lead time, thus preventing the decision- maker from studying the issue well. At other times, though the information given is complete, correct, and submitted on time, it is the decision-maker who is unable to find time to study the issue well. A board director or manager may have the intellectual capacity to study an issue or problem thoroughly but is unable to do so because of time constraints brought about by a tight work schedule and various concerns. Another not very ideal situation is wherein a board director or manager, trying to be conscientious about studying issues and problems, ends up spending more time in analysis rather than on governing or managing. This makes him both ineffective and inefficient. The absence of complete and correct information thal is carefully Studied prevents a thorough and intelligent discussion of complex issues both al board and management levels. The consequences of a board director or manager making a decision relying on data that is incomplete, wrong, not studied sufficiently, or not studied at all, can be costly, disastrous, even fatal. At worse, for the individuals involved, it can even lead to criminal lability. The horror stories of decisions made without sufficient information and study abound. There is the case of a board of directors of a manutacturing company that increased the price of the company's product without the required information on the price sensitivity of its market, The price increase caused the loss of customers to competitors and the company’s later decision to roll back the price to its former level did not recover whal was lost. Loyal customers were also disappointed at the insensitivity of the manutlacturer to their needs. veelA school board that raised its tuition fees without having accurate information about the fees charged by competing schools offering the same quality of education greatly reduced the number of new entrants to the institution. financial institution granted a huge loan to a borrower who had loans outside of the usual banking circles which were hidden in their books. The lack of sufficient credit check and analysis made the board grant a loan to this company that collapsed in less than a year after the loan was released. A consumer company launched a new product for a very specific age market segment. The information provided by the corporate planning stall, not validated well by both the board and top management, was wrong. The market was much, much smaller. Sales were well below estimated volume, resulting in the product's eventual withdrawal from the market due to unprofitability. There is also the case of a corporate board that decided to enter a new market, All the information required for a thorough study of the issue was on hand. However, the papers were given only at the board meeting. The decision to enter the new market stretched the company's resources, resulting in cash flow problems. The problem could have been avoided if ‘the board of directors had received the documents well in advance, giving them enough time to study the issue well and prevent the problem from occurring. ‘On the other hand, there are instances when the information required for decision-making are complete, correct, and submitted with sufficient lead time for study. However, the board director or manager, because of a hectic schedule is still unable to find enough time to study the information well, particularly if it is raw and unprocessed information. A board of a service company secured a loan to finance what it considered a lucrative contract. However, the spread per service rendered was minimal and the burden of the financing cost practically zeroed out the gain onthe contract. All the information was on hand, but was unprocessed. The members of the board did not devote time to do some pencil pushing and really study the profitability of the contract, while management was too busy with everyday operational concerns to do the same. The contract ‘caused opportunity losses for the company. Both the board ol directors and management could have studied how to try to reduce costs to get a better return or goitten into other more profitable ventures. Studying issues and problems, particularly complex ones, always takes time. There are board directors and managers who really spend time Studying each and every case. Despite their diligence, there are many times that they are unable to cover all the items on the agenda, simply because of time constraints. “2 leesA bank director friend goes over each and every loan on the agenda. However, he complains that he is seldom ever able to finish everything because there is “not enough time.” Thus, in board discussions, he is only able to participate actively and discuss well on issues that he has studied, and is usually weak on all the rest. Amanager of an agricultural company spent most of his time analyzing ‘the technical part of the company's business, not being able to attend much to the other functional areas of the firm, also because there is “not enough time." This resulted in the firm having very good products but low sales due to poor marketing and high cost. Both the bank director and the manager of the agricultural company mentioned were not thal effective and efficient, because they were unable to look at and study alfissues. Governance and management are never piecemeal and partial. They must always be total and holistic. The public or government sector also has its share of stories of decisions made without sufficient information and study. Decisions made in the public sector have to be made even more prudently because of the fact that public funds are involved, and the stakeholders of a public institution are more numerous than that of a regular private organization. In one government institution, a newly-appointed CEO was surprised to find oul thal a program was set up and implemented without the benefit ‘of an honest-to-goodness analysis of its feasibility and sustainability. The financial projections for the program indicated net incomes for the first five years. Had the projections been conducted for the entire life of the program, the institution would have been forewamed about the net loss that it would incur atter the first five years. In another government corporation, the President was heard complaining about memoranda sent to his office which did not give clear recommendations or slate concrete actions that needed to be taken about a Current issue they faced, In the end, he had to ask his own office to undertake the necessary research work and to prepare the documents that should be signed. In another instance, a high-ranking government official was giving a speech on government projects in a certain local government unit. In the middle of the speech. a staff member sent him a note stating that a highly desired project for the area had been approved and funded. Elated, the official immediately made the announcement — to the great joy of many in the audience. After the speech, it turned out that the information had not been verified and was incorrect. The office of the high-ranking official had to issue a clarification to the media to correct the mistake. This kind of embarrassment could have been avoided if the official's stall checked the veracity of the information before having it announced. woe 2The experiences in both the private and public sectors have shown how costly uninformed or misinformed decisions can be, It is also a fact that the members of the board and top management of an organization, given their numerous concems, will seldom have enough time to gather all the data required and study all the problems and issues themselves. There is aneed for competent staff to collate information and undertake the studies for the board directors and top management. The staff members in turn need to employ an elfective and efficient system for undertaking studies on issues to be decided on. The system exists. The military has long employed a tried and tested system which staff officers use to study issues brought up to the commander for decision. The system has also been employed effectively in civilian government and is increasingly being used in the private sector. Itis called Completed Staff Work (CSW). (llustrations by Icon V. De Jesus)CHAPTER 2 ee What Is Completed Staff Work Completed Staff Work (CSW) is the process by which a staff member ‘or organization officer thoroughly studies a problem or issue requiring a decision by a superior officer and makes a recommendation of the best ‘solution or option, such that all that remains to be done on the part of the decision-maker is to indicate approval or disapproval of the recommended action. Its formal output is the CSW study, a formal paper with a thorough, holistic, and concise analysis of a problem or issue with its recommended ‘solution or option. Staff work is a tool for timely and informed decision-making, and an aid to good governance and management. It provides the decision- maker with answers to specific problems or issues. It protects him from having an inadequate analysis of the problem and saves him the time and etfort of having to go through voluminous documents and unprocessed information. The doctrine of completed staff work states that it is the duty of the ‘Staff member or officer out the details and not bother the decision- maker with having to sift through documents and process the details. It is the job of the staff member to advise the decision-maker on what he ought to do, and not to ask him what he (the staff member) ought to do. The decision-maker needs answers, not questions. Itis a basic tenet in CSW that the staff member or subordinate officer has no right to pass.on a problem to his superior, or worse, to be the problem himself. Instead, it is the staff member's duty to provide a solution to the prablem. The staff member should research the problem or issue in detail, look at all the relevant facts and make an informed discussion of alternatives. He should thoroughly study the options available and propose the adoption of the best course of action. The CSW study must be clear, brief, accurate, coherent, and complete so that all that will be required from the decision- maker will be to approve or disapprove the recommended course of action. Completed staff work includes the preparation of implementing instruments such as board resolutions, memoranda and the like that will formalize and cause the implementation of the decision. This prevents either ‘the non-implementation, or a delay in the implementation, of the decision. CSW does not end with the submission of the study for decision. It goes on to the communication of the decision and the monitoring of such. ee St