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In Search of Clarity: Unraveling the Complexities of Executive Decision Making
Decision Making is also known as :
Decision Making Techniques,
Useful Decision Making,
Decision Making Skills,
Ethical Decision Making,
Strategic Decision Making,
Decision Making Online,
Decision Making Styles,
Decision Making Process,
Effective Decision Making,
Decision Making Group,
Decision-making Tool,
Evidence Based Decision Making,
Career Decision Making,
Lesson Plan Decision Making,
Decision Making Marketing,
Business Decision Making,
Information Technology Decision Making,
Approach Decision Making,
Decision Making Steps.
Preface
In search of clarity: Unravelling the complexities of
executive decision-making is an Economist Intelligence
Unit white paper, sponsored by SAP BusinessObjects.
The Economist Intelligence Unit bears sole
responsibility for the content of this report. The
Economist Intelligence Unit’s editorial team executed
the survey, conducted the analysis and wrote the
report. The findings and views expressed in this report
do not necessarily reflect the views of the sponsor.
Our research drew on two main initiatives:
- We conducted a wide-ranging online survey in
March 2007. In all, 154 executives took part from
around the world.
- To supplement the survey results, we
also conducted in-depth interviews with
senior executives and independent experts
knowledgeable about decision-making at senior
management levels.
The author of the report was Paul Kielstra and
the editor was Denis McCauley. Mike Kenny was
responsible for design and layout.
Our sincere thanks go to the survey participants for
sharing their insights on this topic.
Executive summary
Decision-making is at the core of all business
activity, as executives set strategy and manage
operations by weighing a vast array of factors
to arrive at the desired balance of risk and reward. The
enormous growth of companies’ size and operations
in recent years—particularly across borders—is
making this process increasingly complex. It is cause
for alarm, then, that executives themselves perceive
the quality of decision-making at their companies as
mixed at best.
Well over half of executives surveyed for this
report—61%—characterise management decisionmaking
at their companies as moderately efficient
or worse, a figure which climbs to 72% for large
organisations. Nearly one in five—rising to over one
quarter in North America—thinks that management
frequently gets its decisions wrong. This may result in
part from the greater challenges of running a business
in a period of rapid growth, such as many of the
surveyed companies are experiencing, but it suggests
deeper problems as well.
This is the key finding of a major programme of
research, conducted by the Economist Intelligence
Unit and sponsored by SAP BusinessObjects, into how
senior executives in different regions make decisions
for their companies. It is based on a survey of 154
senior executives from around the world, as well
as a series of in-depth interviews conducted with
practitioners. Other major conclusions of the research
include the following:
Poor data leads to poor decisions.
By far the most
important input into decision-making identified
by surveyed executives is good data. As one expert
interviewed for this report remarks, “You cannot make
proper decisions without proper information.” But
the timeliness and quality of this information leaves
much to be desired. Less than one in ten executives
in the survey receive information when they need it,
and 46% assert that wading through huge volumes of
data impedes decision-making. Worse still, 56% are
often concerned about making poor choices because
of faulty, inaccurate or incomplete data.
Approaches to decision-making vary by region.
There are distinct geographic differences among
respondents when it comes to how they take
decisions, and to their reliance on technology in doing
so. For example, Asian executives appear more likely
than those in other regions to trust their own intuition
and judgement, while Europeans look more strongly
to the opinions of their peers. Asian executives also
make greater use of technology to support decisionmaking.
Companies need to take these cultural
differences into account as they seek to improve
decision-making tools and processes. Detailed,
uniform decision-making processes may be hard to
apply across different cultures; broad frameworks
describing missions and values may work better.
The challenge only increases as companies grow.
Executives at smaller companies are more confident
in the efficiency of their decision-making than peers
at larger companies, more reliant on people over
process, more consultative, and less worried about
data overload. This is an advantage of being small.
The ability to retain these qualities is an important
management challenge for companies in a period of
rapid growth.
Too much art, not enough science?
Senior
management decision-making at the majority of
surveyed companies (55%) is largely informal and
unstructured, with executives consulting others
largely on an ad hoc basis. Most executives seem
comfortable with these arrangements: only 29%
think poor decision-making structures are a common
cause of bad choices. This reflects a view expressed by
several interviewees that strategic decisions always
require a strong element of intuition or judgement.
Nevertheless, there can be no doubt that better data
and processes would take some of the guesswork out
of decision-making. Common metrics and greater use
of automated information tools such as dashboards
would also help to support better quality decisions.
Decision support tools need to be easier to use.
Executives believe that technology can play a key role
in improving decision-making, by making it quicker
and easier to access and organise large amounts of
information. This is hugely important as companies
become larger and more complex and as the volume
of data available rises. At the moment, however,
too many executives do not feel comfortable using
dashboards and other IT tools that could sharpen
their decision-making. Companies therefore need to
develop decision-making tools that are sufficiently
reliable and user-friendly to appeal to even the less
technology-savvy members of the management team
and wider workforce.
Five ingredients of good decision-making
1. High-quality data
This a prerequisite for consistently sound decisionmaking.
The greater your understanding of your
company, your competitors and your environment, the
more you can move from guesswork to making strategic
choices.
2. Employees need access to good technology
and training
Access to advanced information systems is crucial to
improved decision-making, as is training in helping
employees to make full use of them. Such tools must
also be easy to use. There is no point in spending on
new technology if people do not use it.
3. Sound judgment
Decision-making processes, whether formal or not, need
to leverage the strengths of human intuition. Data does
not run companies; people do.
4. Trust
To gain employees’ confidence in management decisions,
establishing transparency and trust is at least as
essential as a good track record.
5. Flexibility
Approaches to decision-making, and even to the use of
data, need to reflect the fact that the world is a diverse
place, and one size does not always fit all.
Who took the survey?
A total of 154 executives from around the world took part in the Executive
decision-making survey, conducted by the Economist Intelligence Unit in
March 2007. The survey sample was cosmopolitan: 40% of respondents
hailed from Europe, 31% from North America and 23% from Asia-Pacific. It
was also senior—50% of respondents were C-level executives such as CEOs,
CFOs and CIOs or board members, with the rest consisting of heads of business
units and other senior managers. The majority of organisations were
large: 53% had annual revenue of over US$500m, and 25% earned more
than US$5bn. The main industry sectors represented were manufacturing
(16%), technology (16%) and financial services (14%). For more detail on
the sample and results, see the Appendix to this report.
Decision-making and the challenges of growth
In the popular imagination, corporate decisionmaking
is hard-nosed, calculating and, above
all, efficient. Cold and calculating it may be, but
business leaders have only limited confidence in the
efficiency of their companies’ decision-making: some
61% of executives participating in our survey think it
only moderately efficient or worse, a figure rising to
72% for large companies. Confidence is particularly
low among line-of-business and other senior
managers: 70% rate decision-making at their firms
as moderately efficient or worse, compared with 52%
of their C-level superiors. The implication: decisionmaking
efficiency is worse at many firms than the
executive suite imagines.
Faith in the quality of these decisions is equally
equivocal. A large majority (78%) of respondents think
senior management decisions at their companies are
incorrect at least some of the time. More alarmingly,
nearly one in five, and 26% in North America, think
that these managers frequently or always get it wrong.
Business is a world of uncertainty and risk.
Strategic and operational choices are based on partial
information: mistakes are inevitable. Nevertheless,
moderate efficiency and over-frequent error is not
a recipe for success in highly competitive markets.
Companies need to raise the bar, and doing so
requires a better understanding of the environment
and inputs which shape decisions.
Ironically, part of the difficulty may arise simply
from the challenges of good economic conditions:
80% of survey respondents report rapidly or steadily
increasing revenue and 75% a similarly growing
customer base.
Great opportunity, however welcome, can
complicate strategic and operational choices. Lord
Bilimoria, founder and CEO of Cobra Beer, an Anglo-
Indian firm, notes that the biggest challenge for
management in situations of rapid growth is that “it
is all moving so quickly”; he compares the difference
between such conditions and those of slow growth to
“a rifle range versus a moving target.”
Tobias Becker, head of strategy at engineering
giant ABB, cites three ways in which the complexity
of decision-making increases in periods of rapid
growth. First, direct decisions frequently need to be
taken, such as whether or not to bid on a contract.
These opportunities then lead to structural choices
about whether to expand capacity or forego possible
revenue. Finally, success “brings so much cash into
the cash register that new options begin to unfold,”
ranging from major technology upgrades to new R&D
initiatives to mergers and acquisitions (M&A) and
other forms of inorganic growth.
Amid these challenges, efficient decision-making
is a distinct advantage. It may be no accident that
companies in the survey claiming more efficient
decision-making than the average are also
experiencing more rapid revenue and customer
growth. A better test of their decision-making is likely
to come, however, when business conditions get
tough. It would therefore be timely for them to assess
their decision-making processes and inputs now.
How efficient do you consider executive decision-making to be in your organisation?
The crucial role of data
There are numerous inputs to decision-making.
Executives frequently seek the opinions of their
peers in the organisation, for example, or of
external advisers. Many rely primarily on personal
intuition. But good data is the most critical input of
all. As Lord Bilimoria observes: “You cannot make
proper decisions without proper information.”
Whether the decisions are strategic or operational
in nature, survey respondents state emphatically
that data is the single most important input: 78%
rank it critical or nearly so for strategic matters
and 79% for operational ones. And when it comes
to what attributes executives seek most from their
information, the dominant response is quality, ahead
of other important ones as timeliness and sufficiency.
It is cause for alarm, then, that the quality of data
channelled to executives leaves much to be desired
at most companies. Fully 56% of respondents say
they are often concerned about making poor choices
because of faulty, inaccurate or incomplete data.
Generally speaking, their confidence in the quality of
information emanating from within the organisation
is high only when it comes from finance. There is a
good deal less satisfaction with information coming
from HR and IT, as well as from regional and country
head offices. Line-of-business heads and other senior
managers are more wary about the decision-making
data at their disposal than C-level executives.
Timeliness is also a problem. Only 10% of
executives report that information to make a decision
is usually there as needed, with more than one-third
admitting it is only available after a long delay or
not at all. Another 40% also say that waiting for
information to be updated is a common cause of delay
in their decision-making. And 46% agree that having
to process huge volumes of data slows decisionmaking
at their companies.
Efficient decision-making companies perform better
in data quality and timeliness than their peers. Some
17% of this group, for example, have the data when
they need it to make decisions, and only 24% face long
delays or failure to get the needed information. Overall
they also show somewhat greater faith in information
from different functions and business units.
Nonetheless, this is not a substantial improvement
from the average; the data for all groups of companies
clearly show plenty of room for improvement.
When senior executives make strategic decisions for your organisation (eg, major investments, entering new geographic/product
markets) how important are the following factors? Rate on a scale of 1 to 5, where 1=Critical and 5=Not important.
When senior executives make operational decisions for your organisation (eg, involving marketing, supply chain)
how important are the following factors? Rate on a scale of 1 to 5, where 1=Critical and 5=Not important.
How strongly would you agree or disagree with the following
statement: “We are often concerned about making poor
decisions because of faulty, inaccurate or incomplete data”?
Technology helps—to a point
“New technology is making it easier to be good and
easier to be bad,” says Royce Bell, CEO of Accenture
Information Management Services. “It helps
companies who have a well-thought-out strategy
and follow it,” he maintains, but it can also give bad
management more effective control with which to
implement bad decisions.
Good information systems can help companies
improve data quality and timeliness, although
limits exist. Phil Papesh, director of regulatory and
administrative systems at the Chicago Mercantile
Exchange (CME), notes that even at companies with
cutting-edge systems, there are trade-offs between
data speed and quality. “We can answer most of your
questions, but as we get richer data, the practicality of
answering any question you have is a problem.”
More advanced systems could go some way to
reducing this difficulty, but Mr Papesh also says
that there are misperceptions “about the level of
information and data that IT necessarily has. The
expectation is that we have information we don’t, and
this causes frustration.” For example, self-reported
data from customers is not necessarily of consistent
accuracy, so analysis of it may not yield useful
insights.
To what extent are the metrics used in decision-making
(operational and management) standardised throughout your
organisation?
Another issue is that of metrics. Historically,
at most companies different units have developed
their own metrics suited to their specific functions.
Meaningful data aggregation, though, requires
a common set of definitions. Even agreement on
something as apparently simple as what a customer is,
says Mr Papesh, can require a big effort. Little wonder
that at 57% of surveyed companies senior executives
do not have a common set of metrics to work with,
which is a typical cause of delays at one-third of all
companies.
The problem with adopting standardised
measurements, as distinct from common definitions,
is that however much they help on the corporate level,
they may impede the work of individual departments.
Mr Bell explains that, for this reason, “I am not a
huge fan of common measurements. Each function
understands what it needs to do, and knows how to
measure it.” In carrying out the essential work of data
collection and aggregation, companies have to take
care not to limit the usefulness of the information
itself.
Trusting the technology, and the data
Building trust in the systems used to deliver data—
and the data itself—is an essential, if long-term,
project. Establishing common definitions are a first
step, but raising executive comfort levels with the
technology is also vital. In the experience of ABB’s Mr
Becker, it takes about six months from introduction
of a new information system to its acceptance
by executives. He also finds that it helps to give
executives models in which they can manipulate the
input factors themselves—giving users a sense of
control tends to speed adoption.
But building their confidence in the data generated
by these systems, Mr Becker warns, is much more of
an uphill struggle. Managers who think the figures
do not correspond to their experience will distrust
them. Here, he says, “it takes two years to move from
the first decent system—what you might call a 1.0
version—to finally having something to which all the
key managers have signed up.”
But building their confidence in the data generated
by these systems, Mr Becker warns, is much more of
an uphill struggle. Managers who think the figures
do not correspond to their experience will distrust
them. Here, he says, “it takes two years to move from
the first decent system—what you might call a 1.0
version—to finally having something to which all the
key managers have signed up.”
The personal element is essential, according to Mr
Papesh: “If executives are more used to managing
on intuition than data, then if it doesn’t look right
they aren’t going to trust it.” His colleague, Jabir
Patel, a project manager involved with CME’s business
intelligence platform, believes that IT needs to
deliver not just the product, but “a lot of education,
awareness and customer service” so users can adapt
the system to their needs.
As they spread and comfort levels increase,
dashboards, databases and similar products are
likely to play a larger role in informing corporate
decision-making than the survey shows is currently
the case. But bringing this about will require as much
management of human beings as IT systems.
The human factor
The need to increase executive comfort with
information tools points to a central issue
in decision-making: although good data is
essential, ultimately guiding a company remains a
human activity.
At most companies (55%), although some
formalised, process-based decision-making may take
place, the norm is for executives to make choices
on an informal basis with ad hoc consultation.
Respondents seem comfortable with this. When
decisions turn out badly, respondents most
frequently cite poor implementation as the likely
cause (at 56% of companies) rather than poor
processes or structures (29%). At organisations
where executives say decision-making is efficient,
only 10% say processes and structures are the
reason. (Among all firms, C-level respondents
tend to cite data insufficiency first, ahead of
implementation problems, while other senior
executives focus on the latter.)
The survey findings confirm the reality that, while
solid data is a prerequisite for good decision-making,
at a certain, advanced stage, human ability to weigh
intangibles and ambiguity needs to take over.
According to Mr Becker: “Ultimately it comes down
to the philosophical question: ‘How much science do
you want to put in it, and how much art do you want
to leave in it.’ You need to leave in intuition and gut
feeling: mechanised decision-making squeezes out
entrepreneurial spirit.”
Mr Becker cites, as an example, decisions on
the location of new production or engineering
facilities—a choice ABB has to make several times a
year. A process-driven prioritisation model taking into
account 14 risk and benefit factors narrows down the
number of top choices to a handful. Then, however,
management has to make a “gut feel” decision
based on intangible tradeoffs, such as whether a
government will really build a promised highway to a
prospective location or not. “At the end of the day, I
need to make a bet. You can’t model this.”
This does not preclude a bigger role for technology
and processes. Mr Papesh notes that at the Chicago
Mercantile Exchange, the information systems help
with presentation: “How do you determine what is
important? How do you churn through a large amount
of data in a timely way and present executives with
the essence? This is not just processing; information is
distilled down to something meaningful.”
Choices on what data is meaningful or important
is in itself a crucial type of decision. Faced with huge
amounts of information, Accenture’s Mr Bell expects
a move among large companies toward greater data
control, more formal processes and, where possible,
automation of decision-making. But he also feels
that companies have moved away from the 1990s
tendency “to load every bit of data into a database
and expect wisdom to come forth like Athena.” In
the end, he argues, business needs “to understand
better how human beings work, and educate people
more about the psychology of decision-making. Given
we [humans] are the most important piece in the
enterprise, our understanding is pretty terrible.”
When decisions go wrong in your organisation, which of the
following factors are most likely to be involved?
Select all that apply.
Please indicate whether you agree or disagree with the following statements about decision-making at senior management
levels in your organisation.
(% of respondents)
The virtues—and
limitations—of scenariobuilding
All decisions ‘live’ in the future. To some
extent, therefore, decisions need to anticipate,
or even change, the future. Not surprisingly,
24% of survey respondents rely
mainly on some sort of prediction in making
their choices, while only 8% look primarily
to historical information—with the rest
using some combination.
But how should companies think about
the future in a highly uncertain world?
One approach followed by a number of
companies, notably the energy firm Royal
Dutch Shell, is to use scenarios. These are
sets of stories about possible futures based
on the identification of predetermined
elements and key uncertainties considered
most likely to shape conditions going
forward; a rigorous analysis of the directions
that might unfold; and the creative
generation of stories which look at how
such different outcomes might interact to
shape future reality. The goal is not a set of
predictions but a deeper understanding of
the interaction of the key drivers of change.
Angela Wilkinson, director of scenarioplanning
and futures research at Oxford
University’s Saïd Business School, and until
recently a senior member of Shell’s Global
Business Environment Team—its scenario
builders—warns that there are many
existing approaches to scenario-building, a
situation which has created “methodological
incoherence”. Amid the confusion, the
“intuitive logics school”, on which Shell
relies, has several advantages. Rather than
generating a series of predictions with
given probabilities, this approach is “about
embracing uncertainty and appreciating
multiple interpretations of current reality.”
The resultant scenarios can become
central not just to forward planning, but to
how an organisation learns and structures
knowledge and wisdom. Any scenario set
gives a diverse range of contexts with
which to see the possible relevance of new
information and the challenges it might
pose for strategy-makers. Ms Wilkinson
asserts that a scenario-based approach
can help executives face the deluge of
information about which so many of
them worry: “Intuitive logic works on the
assumption there is too much information
that has to be made sense of,” not too little.
Another benefit of using scenarios, says
Ms Wilkinson, is that they can combine
human intuition and hard analysis, two
elements which are the bedrock of all
good decision-making. “Human beings
are inherently scenario thinkers,” she
observes, but “decision-making processes
can be dominated by upfront numerical
analysis”. She refers to scenario-building as
“disciplined imagination, a combination of
analysis, creativity, and discussion.”
Scenarios do not make the decisions;
rather they provide a common intellectual
background against which choices can be
discussed, tested and agreed, and not just at
the senior level but across the organisation.
The resultant decisions benefit from
increased understanding and communication
within the company, not because they
are inevitably correct, but because the
organisation, as a whole, becomes attuned
to looking for signals of significant changes.
Ms Wilkinson points out that, in turbulent
times, people are looking for “flexibility
and resilience” in strategy to meet rapid
change—something which scenario-building
can be designed to address.
Building confidence
Psychology also comes into play in the critical process
of building the organisation’s confidence in executive
decision-making. Lord Bilimoria of Cobra Beer believes
“the most important thing [in decision-making] is
having an open atmosphere in the organisation of
trust and respect, which enables you to make the
best decisions and allows everyone to participate.
Leadership, after all, is about deciding where to go and
getting everyone to go along with you.”
ABB is a much larger company than Cobra, but the
prescription there is similar. According to ABB head
of strategy Mr Becker, ”It is paramount to explain
how decisions are made and what is behind them, in
order to create trust in the decision-making process.”
Otherwise, he says, people will leave decisions
unimplemented on the assumption that someone else
will come along and change the strategy. This was
ABB’s “big disease” in the 1990s: “The captain turns the
rudder, but the rest of the organisation does nothing,
and the ship doesn’t turn.”
A major factor in distrust, believes Mr Becker,
is the frequent discrepancy between how senior
management and employees down the line see reality.
But “when we explain” to employees the data and
models used in strategic decision-making, he says,
“then we get direct feedback and lots of emails which
says trust has been re-established. It is almost like
breaking a dam.”
Building such trust also allows organisations to
learn from instances when decisions go wrong, which
according to the survey happens all too frequently.
Part of good decision-making, affirms Lord Bilimoria,
is learning from one’s mistakes. “Good judgement
comes from experience, and experience comes from
bad judgement.” Companies need to be prepared for
that failure and able to learn from it.
Culture and process
There is little global uniformity in decisionmaking
perspectives: executives’ beliefs on
the appropriate method for arriving at and
implementing decisions vary widely from region to
region. This is partly explained by the deeply human
element in decision-making discussed above. Asia-
Pacific-based executives in the survey, for example,
place greater value than European and North
American peers on personal intuition in strategic
decision-making, and less on the opinion of peers and
lower level managers, which European executives tend
to favour.
Asia-Pacific executives also seem more satisfied
with their data. They are far less likely than their
counterparts to blame bad outcomes on insufficient
or poor quality data, and twice as many as the global
average have information when they need it to make
decisions.
Keith Willey, professor of entrepreneurship at
London Business School, describes the impact
of culture on how decisions are made as “huge”,
contrasting even Britain and continental Europe, let
alone larger differences with Asia and North America.
In multinational companies, this can cause
problems for universalising even apparently
straightforward processes. In a 2003 study
addressing human resources management, Mark
Fenton-O’Creevy, a university-based authority on
organisational behaviour, cited the example of a US
firm’s Chinese subsidiary in which managers formally
comply with an appraisal-based annual bonus system
but construct the appraisal profiles retrospectively to
fit decisions about bonuses made on different criteria.
At a more strategic levels, differing cultural
biases can impede important strategic discussions.
Mr Becker, for example, notes that ABB’s policy of
reviewing, and sometimes correcting, key decisions
in the light of changing circumstances or new
information is viewed as flexibility in some parts of the
world but is stigmatised in others as an admission that
the original decision was wrong.
Lord Bilimoria of Cobra Beer, which has offices in
India and South Africa along with its UK headquarters
in London, explains that cultural diversity requires a
globalised model of decision-making, rather than one
controlled entirely by corporate headquarters. “What
you try and share internationally are the fundamental
principles and values of your business, its basic
mission and vision. After that, you need to be flexible
because of the cultural differences. You have to allow
teams to get on with it.”
That autonomy leads to better results, asserts
Lord Bilimoria, as the way things work on the ground
between Britain and India can be very different.
Little wonder that survey respondents indicate their
country head offices abroad usually share the same ad
hoc decision-making processes—or lack thereof—as
corporate HQ.
When needing to make an important business decision, how
easy do you feel it is to find the information necessary to
support the decision?
(% respondents)
% of respondents from each region stating that personal
intuition is critical, or very important, in strategic decisions
Size matters, too
Another clear cultural divide within our survey is
that between larger and smaller companies—the
latter of which includes both midsize and small
businesses (companies earning less than US$500m
annually in revenue). Over half (51%) of smaller
companies consider their decision-making to be
largely or extremely efficient, against just 28% of large
companies. There is also greater confidence in the
results: 26% of respondents from smaller companies
think management rarely or never gets decisions
wrong, contrasted with 16% at bigger companies.
Scale clearly matters: smaller companies generate
less data and allow more personal control. Executives
at these organisations are less likely than peers at
larger ones to suffer delays from huge volumes of
information, although data insufficiency is a far more
likely culprit when decisions go wrong. Personal
intuition plays an important role in strategic decisions
far more frequently at smaller companies (64%
compared with 44%), and executives there are also
more likely to consult lower level management or rely
on conversations with colleagues in areas such as
assessing risk factors.
Personal, hands-on management, has its benefits.
As Lord Bilimoria points out, executives at smaller
companies have the “huge advantage that they can
make decisions and put them into action much more
quickly,” in part because personal contact is easier.
“The amount achieved in one face-to-face meeting,”
he says, “beats hundreds of emails and telephone
calls.”
Mr Willey points out, on the other hand, that small
company confidence could simply rest on “blissful
ignorance”. Often focussed on their own niches—and
possibly even having made conscious decisions not to
grow—executives of smaller firms may be unaware of
broader threats or opportunities, he believes.
Most companies aspire to growth, however, and
to accommodate it entrepreneur- or family-led
companies need to shift management decisionmaking
to a more professional level, where gut
instinct no longer overrides objective analysis—a
difficult transition to make.
Conclusion
Decision-making by companies has enormous
room to improve both in terms of efficiency and
quality; it will have to for companies to keep
pace in an increasingly competitive global business
environment. This study finds two broad areas where
businesses should focus in order to achieve this.
The first is in obtaining, filtering and verifying the
necessary data needed for decision-makers. This is
where technology comes into play, and where the
optimal use of dashboards, analytics and business
intelligence applications can make a big difference.
The other is to understand how human beings fit
into the process. The best technology in the world will
not help a company if executives do not trust it, find it
difficult to use or are disposed for some other reason
not to use it. In the end there is an inevitable tension
between formalising processes and trying to benefit
from intuition, but a company which understands
the uses and limits of both will gain an important
competitive edge.
Appendix
In March 2007, the Economist Intelligence Unit conducted a survey of 154 executives of companies from across
the globe. Our sincere thanks go to all those who took part in the survey. Please note that not all answers add up
to 100%, because of rounding or because respondents were able to provide multiple answers to some questions.