Maybe Sherlock Holmes was alluding to boardroom decision-making when he said, “It is a capital mistake to theorise before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” (Author: Arthur Conan Doyle)
Despite advances in analytical tools, many business leaders are still playing this dangerous game when it comes to evaluating their current business situation, risks and opportunities. In the absence of data, strategies are often based on limited intelligence, gut feel and the power of influence wielded by certain individuals.
Even when more comprehensive information is insisted upon, the process can be exhaustive. Executives are often forced to suffer long review cycles or to reconvene days (maybe even weeks) later, when critical insights have finally been pulled together. And then there’s the unspoken truth - sometimes data can be too easily manipulated to support specific points of view or to avoid the real truth from being exposed.
In a highly competitive, fast-moving economy, the luxury of ‘decision time’ is diminishing rapidly just as bad decisions are becoming harder to recover from. Today, C-level executives need key insights delivered in real time to drive the strategic choices that will determine the success (or failure) of their business.
The underlying problem
Today, many organisations continue to run board meetings using traditional management reporting packs. These weighty documents are often printed out, built in MS Office applications (typically Excel or PowerPoint) and have gone through a long drawn-out, manual process to be produced. Frankly, it’s astonishing to see the volumes of paper-based reports that still drive today’s boardroom agendas.
There are three key reasons why this antiquated approach is potentially harmful to your business:
- The information isn’t real-time: With static reporting packs there’s no ability to access data in a live environment and the data itself is often produced well in advance of your meeting. By the time the conversation starts, you can be making decisions using data that is out-of-date.
- The important conversations are constrained: Decisions are being made using only the information available in your pack. There’s no ability to drill down into the data in an ad hoc fashion, or to intuitively explore it – for example, carrying out ‘what if?’ analysis.
- The presentation isn’t engaging: Without a simplified view of the data it will inevitably be presented all at once, producing a ‘wall of numbers’ type layout. Key insights can be easily missed and the whole approach fails to stimulate healthy discussion.
These drawbacks have a significant impact on the speed and quality of decision-making in the boardroom. In situations where your packs don’t contain all of the information, and particularly where ad-hoc questions are asked or scenario planning activities are required, decisions are either not made or deferred until the information is made available.
In the rapidly changing world in which most companies now operate, who can afford to wait? For those that do, there’s an increasing risk of lost business opportunities, both for generating revenue and reducing cost.
Transitioning from 'Pack to Pad'
To create a real-time boardroom, one of the first steps executives can take is making the transition towards modern analytical applications and approaches. This doesn’t just mean analytical content being digitised and available on a tablet. It’s more about ensuring that the key decision makers have access to live information across the entire business. In other words, a 360° view with the ability to understand the current position as well as look forward and make fact-based predictions. With exception-driven reporting, root-cause navigation and self-service ad-hoc analysis, you and your executive team can get to the heart of the issues that need addressing and fast.
The justification for investing is this approach should be based on the radically improved access to real-time information, as well as the efficiency saving made through automation - removing the need for manual, duplicated activities. This also frees up the key individuals, who, in the past, have normally produced the traditional reporting packs, such as management accountants or business partners. Their time can now be used to support the execution of key board-level actions, rather than chasing data and preparing reports.
Real-time facts bring unparalleled transparency
Winning businesses are already making decisions based on facts, not assumptions or the subjective theories of key individuals. Business leaders of these successful companies have a clear line of sight and know exactly what is happening in their organisations at all times. Data cannot be massaged or kept out of the picture. As such, operating in such a real-time enterprise means greater accountability and responsibility. Getting there undoubtedly requires change, but it’s a transition that is absolutely necessary, as this level of transparency will increasingly become a key success factor in future.
Pic: 'The Boardroom' - Sofitel Dubai (Creative Commons)