Did you screw up your last strategic initiative? Relax.
You are not alone.
New research out today from the London-based Chartered Institute of Management Accountants (CIMA) and the Durham, N.C.-based American Institute of CPAs (AICPA) found that senior leaders are struggling to make the right decisions — and 72 percent of organizations admit to at least one failed strategic initiative in the past three years.
The execs blame the failures on flaws in their decision making process, specifically citing information overload, excessive bureaucracy, lack of trust and "incentives that aren’t aligned with goals."
The report, Joining the Dots: Decision Making for a New Era surveyed 300 C-level executives at large organizations from 16 countries. Commissioned by CIMA and the AICPA and conducted by Longitude Research, it also included in-depth interviews with C-suite executives from companies such as Diageo, Rothschild and EY.
Overall, it doesn't paint a pretty picture. “Bad decisions make for bad business, so these findings are a cause for great concern," said CIMA CEO Charles Tilley.
Bad Data, Slow Processes
It’s hard to make good decisions with bad data — and 80 percent of the executives surveyed said that was exactly what they often get. They admitted flawed information has been used to make decisions. It's not surprising: Only 32 percent rate their organization as highly effective in delivering relevant and timely information to decision makers.
In addition, 42 percent said they were slow to make decisions, and lost competitive advantage as a result. The biggest problems, cited by nearly three in 10 respondents: organizational silos and bureaucracy create coordination problems.
So let's dig a little deeper into those causes of poor decision-making:
Information overload:The vast majority, 64 percent, said their organization is coping with information overload. And 32 percent think big data has made things worse.
Trust and collaboration: 43 percent don't really trust their fellow executives and 57 percent agree more active collaboration is required to improve decision making.
Incentive structures: 61 percent of bosses admit their organization’s incentive structures aren’t encouraging the right sort of decisions for short, medium and long-term value.
"Strategic alignment was the ideal that if business units shared the same goals, then if they all broke down their business processes into individualized segments, they could automate some of those segments and give each other greater opportunities to work towards those goals," Fulton wrote.
The professors believed that various business units would naturally begin to work together once these automated components of work "became so atomic that everyone could perceive themselves as being responsible for any part of it."
That hasn't been the case in most organizations. As Fulton opined, "Over the last quarter-century, it’s just as difficult as it ever was for the people in these various groups to get together in the same cafeteria."
Now we have research that proves it.
For More Information:
- The Whole Bit About Strategic Alignment
- Strategic Leadership Sets CMOs Apart from Heads of Marketing
- Bad Company Culture? Blame Senior Leadership
- Is Email the Solution to Information Overload?
Title image by Ryan McGuire