Report: Corporate Leaders Need Better Decision-Making Processes

By:
Chris Gaetano
Published Date:
Apr 28, 2016
Maze with marblesA joint report from the AICPA and the Chartered Institute of Management Accountants says that corporate leaders need better decision-making tools better adapted to the 21st century. The report, which drew on a survey of 300 C-level executives in 16 countries, "found a number of major flaws in companies’ decision making, which is costing them dearly. It paints a compelling picture of decision-making models that are no longer fit for purpose," according to the executive summary. 
For one, 29 percent of executives think their organizational bureaucracy has become too siloed into individual components that have trouble coordinating with each other. This makes it more difficult for companies to make decisions quickly, much to their own detriment: 72 percent said that their company has had at least one strategic initiative fail due to decision making delays, while a further 42 percent said they lost competitive advantage because it takes them so long to make a decision. 

Perhaps one reason it's difficult to coordinate decisions in a large organizations is that executives themselves don't trust each other as much as they could: 43 percent of C-suite leaders polled said trust with other executives could be improved. 

A third of poll respondents also said that data analytics hasn't really helped that much either: 32 percent of executives said that the era of big data has made decision making worse, not better. It could be because there's too much information to effectively process: 36 percent of C-suiters said their organization is not handling information overload very well. However, there are slightly more that are confident in the future of data analytics at their companies, with 37 percent saying its use has improved decision making at their organization. 

To face these issues, the report said that organizations must: 

Overcome bureaucracy and achieve agile decision making;
* b
uild greater levels of trust and improve collaboration;
* t
ake a long-term view and define the right metrics;
* turn huge volumes of data into strategic insight; and
* build the decision-making skills of senior leaders.

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