Joining the Dots

High-quality decision making has never been more important — or more difficult. Leading in a new era requires the ability to join the dots, connecting the most relevant information and people from across the organisation when making decisions.

By CIMA

 

In today’s ‘VUCA’ world—characterised by volatility, uncertainty, complexity and ambiguity— strategic decision making is increasingly critical. It is also becoming harder and harder to get right. As discontinuity becomes the norm and the most established business models come under threat, organisations need to make good strategic decisions quickly—and then deliver on their choices.

 

Senior leaders are struggling to make the right decisions, with 72% of organisations admitting to at least one strategic initiative failing in the last three years as a result of flaws in their decision making process, according to research from the Chartered Institute of Management Accountants (CIMA) and the American Institute of CPAs (AICPA). Information overload, excessive bureaucracy, lack of trust and incentives that aren’t aligned with goals were all cited as contributors to poor decision making in businesses globally.

 

The ‘Joining the Dots: Decision making for a new era’ report surveyed board-level executives at large organisations from 16 countries and revealed that not only do executives admit to poor decision making, more than three quarters (80%) say flawed information has been used to make strategic decisions, with 42% admitting their organisation lost a competitive advantage because they were slow to make decisions. 

 

The top causes of poor decision making identified in the report are:
 

  • Information overload:  36% say their organisation is not coping with information overload, and 32% say big data has actually made things worse, while 37% say it has helped. For those that can gain greater mastery of big data, there is a significant opportunity to gain a competitive advantage. Among high performing organisations, 86% are already assessing the management information they need by focusing on the key value drivers of the business model.
     
  • Bureaucracy: nearly a third, 29%, say the single biggest barrier to more effective decision making is coordination problems caused by organisational silos and bureaucracy.
     
  • Trust and collaboration: 43% say their level of trust in fellow executives needed improvement and 57% said more active collaboration was required to improve decision making.
     
  • Incentive structures: 61% of bosses admit their organization’s incentive structures aren’t encouraging the right sort of decisions for short, medium and long-term value.

 

Click here to read the full report by CIMA. 

 

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