Productivity is big news. Particularly in the UK, where the productivity crisis has stifled economic growth, and led to government initiatives to counter the problem. Against a backdrop of ever-changing economic, technological, and political conditions, how are managers gathering information, using what they know and making critical decisions for their organisation to be successful? We set out on a significant fact-finding mission to investigate what is fuelling, and inhibiting, business growth. After speaking to over 1,000 managers across Europe, the Middle East, and Africa, we found some interesting things. Our findings paint a mixed picture for business leaders. Optimism for growth is high – particularly in the UK – where 63 per cent of managers expect their organisations to grow in the next two years. However, the research also highlights a concerning trend. Managers are experiencing an unhealthy relationship with internal and external data sources, creating pressure in the decision making process and making it difficult to adapt to change.
Data pressure is real and is limiting decision making capabilities
When it comes to making significant decisions, the survey shows that 78 per cent of managers feel more anxious about big decisions at work than critical decisions at home that impact their family. More broadly, 94 per cent are generally overwhelmed by data when making decisions. Aside from hindering employee satisfaction, business leaders need to understand the important links between data, decision making, and growth. Gartner states that by 2022, 90 per cent of corporate strategies will recognise ‘information’ as a critical enterprise asset. Meanwhile, analytics will be seen as an essential competency. Therefore, adding data pressure – and the feeling of being overwhelmed – is going to have a limiting impact on future success. The research also shows the problem of information pressure is inextricably tied up in the level of data within managers’ organisations, and their ability to process and use it. Eighteen per cent don’t feel they have the tools they need to do their job, while 19 per cent don’t think they have the right data. Technology has taken giant leaps forward in recent years, enabling the ability to collect, organise and analyse larger amounts of information than ever before. Yet these advances have created an unexpected problem of information overload, with managers feeling ill-equipped to extract any meaning from the data they now have.
Avoiding decision making risk is damaging potential
Another prominent finding is that managers are hesitant to take risks. In fact, 28 per cent of managers are actively making risk-averse decisions, even if they know that decision may not be as successful. When it comes to making big choices around launching new products or services, expanding into new markets, launching new campaigns and making investments, managers are experiencing a form of ‘analysis paralysis’ in which they are simply trying to avoid the repercussions of decisions. Fears about negatively impacting revenue (40 per cent), damaging personal reputation (22 per cent), losing their job (17 per cent), and adversely impacting co-workers (13 per cent) are the top four areas managers are concerned about. Risk aversion is even higher amongst organisations that define themselves as high performers – with 62 per cent admitting they actively make cautious decisions. For businesses leaders, alarm bells should be ringing from these INNOVATION 23 findings. The old adage of fail fast, fail often, and learn from your mistakes is no longer the case. Business leaders need to alleviate the burden of decision making and empower staff to make critical decisions. This means establishing a culture of trust, and employees feeling confident that the information they have is useful. Too many organisations have data sitting in different places, in a kind of data hairball. Siloed data means the data cannot be analysed together, which causes inefficient processes and not having the right information to make the best decisions, leading to outcomes such as risk aversion.
Driving a culture of data relevance
The issue of data relevance goes a long way to explaining this culture of decision making pressure. I speak to a lot of organisations about their objectives, and one of the things I hear most often is the challenge of presenting the right type of information for different functions. We often hear that information is being presented too inaccurately. This is a problem when you consider what managers in the survey identified as a major objective for their organisations. Thirty-three per cent think generating more sales from existing customers demonstrates their best opportunity for driving growth. These ambitions therefore have an impact on the data types needed across department functions. For example, does the commercial team have access to data to help identify where possible upsell opportunities exist? Has the finance department been able to forecast whether engaging existing customers will help meet growth targets? Does the marketing department have insights into what customers want to be able to market to them effectively? www.theglobalrecruiter.com Harnessing intuition, experience and ‘gut feel’ We know that time pressure and more complex processes are also making decision making harder. Twenty-seven per cent of managers have had less time to focus on critical decisions in the last year and 28 per cent note more people have become involved in the process. As a result, 21 per cent are relying on gut feel and intuition to make critical decisions. The problem is this – intuition alone doesn’t provide a platform for growth. In fact, 55 per cent of the organisations that said they were exceeding growth targets identified themselves as highly data-driven. But it’s not a case of removing human intuition altogether. Organisations need to be data-driven and blend information with uniquely human insights to create strategy. We need to harness a virtuous cycle whereby data informs intuition, and intuition is applied to make sense of data. For example, companies can use software platforms to identify supply chain trends, flagging suppliers that don’t deliver on time or consistently late-paying customers. But human intervention is needed, as there may be a valid explanation for late payment or another reason why chasing them would potentially damage the business relationship.
Leveraging the right data and a culture of trust
Wherever organisations operate, business leaders must instil a culture of willingness to explore new opportunities. This must be underpinned by external data sources to help analyse and plan. A combination of these sources – analyst reports, research, industry associations, trade publications – and internal data sources can help managers identify the best ways to grow their business. Each day, this becomes more important. Every minute, online and digital interactions are creating data and adding to the information available about an organisation’s consumers and their behaviour. Business leaders also need to focus on inclusivity. Almost three quarters (74 per cent) of managers say their organisation is good at capitalising on new opportunities, but there are serious concerns about the planning process. Only 31 per cent say they are proficient at adjusting business plans based on data analysis and almost one quarter (24 per cent) do not think senior management provides a clear plan for success. That means bringing employees along on the planning and strategy process, and making people feel included is vital. Encouraging knowledge sharing and ensuring individuals feel they belong to the collective are critical when it comes to promoting trust. Engaged employees invest more discretionary effort, progress faster and stay longer. Developing engaged and happy employees that can harness information is not only good business practice, it is a critical route to employee satisfaction and wellbeing at a time when more data is flowing through the organisation than ever before.