Management information is the result of the process whereby technology or manually driven captured data is delivered across the value chain of an organisation to produce manual and/ or automated reports. The reports can be in different formats, to different levels of managers and leaders to enable proactive decision making based on historic, current and future trends, derived from the interpretation of the information.
One of the most common challenges is how to migrate from operational silo reporting to integrated enterprise wide (across the value chain) management information solution. Such integrated enterprise management information systems (EMIS) should be linked to the business strategy and its chosen value drivers. This statement assumes leaders are definitively clear on their business strategy, the underpinning value drivers across the value chain, in take an integrated perspective on the information and the interdependencies at play.
The underlying premise of this article is the fundamental truth that, as the human body cannot survive without blood being the carrier of oxygen, so is it equally unlikely that businesses and companies can survive without accurate, accessible and relevant management information (MI).
The diagram below depicts the levels of MI reporting and the value add to happen along the path of data conversion
The migration to a higher level of value unlocking and driving better and faster decisions can only occur through integrated management information, inclusive of:
- A deep understanding of the compound impact across the upstream and downstream processes (positive or negative) in a specific value chain of a specific industry;
- The enabling power of integrated data, information, knowledge and intelligence sets across the value chain; and
- The conversion of data, information, knowledge and intelligence in visualised format.
It is also factually one of the most contemporary developments in the world of business to optimise MI solutions to migrate from clinical data to intelligent knowledge in many dimensions inclusive of 3D modelling and the concept of digital twins within the frame of artificial intelligence.
Where MI has been disregarded
Despite all the progress made with world class MI solutions there are a myriad of examples where leaders and managers disregard MI with sometimes disastrous consequences. Some recent examples include a hurricane disaster in the USA, as well as recent major airline disasters, and corporate collapses in south Africa in the financial services and retail related industries.
There are obvious many reasons for the occurrence of this “disregarded phenomena’ but the common denominator was that sufficient information was available for management and leaders to react to at least soften the blow and or to prevent the occurrence thereof:
- MI with warning signals was available;
- It was formally / informally tabled;
- The evidence was available but rejected with counter arguments;
- The facts were discussed in formal /informal reviews but never act upon; and/or
- Messengers were discredited as prophets of doom.
Leadership mind-sets can disable the inherent value of MI.
The fundamental question is why leaders and managers chose to disregard MI? Some of the reasons for this are related to what is called “cognitive” and “social biases”. Some of these are highlighted below.
There are many well-documented biases, but these are among the most dangerous in the strategy room1.
- Overconfidence: Experts become more confident as they gather more data—even though the additional data might not make their projections any more accurate. Overconfidence is self-reinforcing, too. It leads people to ignore contradictory information, which makes them more confident, which makes them more likely to ignore contradictory information. We convince ourselves that we have a winning strategy this year even though we continue doing pretty much what we’ve always done.
- Confirmation bias: When you bring together a bunch of people with shared experiences and goals, they typically wind up telling themselves stories, generally favourable ones. One study found, for instance, that 80% of executives believe that their product stands out against the competition—but only 8% of customers agree.
- Survival bias: This is one to which the strategy processes is particularly prone, because we only see what happened, not what didn’t happen. We can precisely measure the behaviour of the customers we have, but what about the silent voices of the customers we don’t have?
- Attribution bias: This one often kicks in when a target is missed, with blame piled on the most convenient cause available, usually some one-off event—unseasonable weather, an IT outage, etc.—even though such one-off occurrences seem to happen every year. With failure dismissed as an externality, the management team closes ranks and decides to double down and re-establish the goal. “We lost a year, but we’re going to get back on track.”
- Pattern recognition: The process which integrates information from as many as 30 parts of the brain leading us to make assumptions based on previous experiences and judgements
- Emotional tagging: The process by which emotional information attaches itself to the thoughts and experiences stored in our memories.
- Sandbagging: “I’m only going to agree to a plan that I know for sure I can deliver. My reputation is on the line, and I can’t risk being the one division that misses budget.” Individuals will often have a different attitude to risk than their overall enterprise does.
- The short game: “Someone else will be running this division in three years, anyway. I just need to milk performance for the next couple of years, get a good bonus and the next promotion— or maybe get poached by our competitor.” The motivations of the executive are not automatically aligned with those of the owners.
- My way or your problem: “I know this business and industry better than the CEO and better than the board. They’ll just have to believe what I tell them. If I don’t get the resources I ask for, then there’s my excuse for not delivering.” The line executive has inside knowledge, and often the CEO and board have little choice but to accept their version of the truth. Market share can be defined favourably by excluding geographies or segments where the presenter’s business unit is weak.
- I am my numbers: “I get judged by my numbers, not by how I spend my time. I’m just going to work hard enough to hit my targets, but not a lot more.” One’s supervisor can’t directly observe the quality of effort, and results can be noisy signals. Were those poor results a noble failure? Were those great results dumb luck?
Shifting biases working against MI
Some practical ways in which the avoidance of MY can be addressed include:
- Injecting fresh experience or analysis;
- Introducing further debate and challenge;
- Imposing stronger governance;
- Laying out the range of options;
- Listing the main decision makers:
- Choose one decision maker to focus on;
- Repeat the analysis with the next most influential person;
- Do on-purpose debriefings and learn from post-mortems;
- Apply scenario development to stress-test potential outcomes; and o Review the list of identified thresholds – red flags you have identified,
A global company tackled bias head on. They started a cultural-change program early in their strategy journey, to address the need for a different management mind-set in light of an increasingly uncertain future. A big component of that was mindfulness—becoming aware of not only individual cognitive patterns, but also the likely ones of the people you work with. It was equally important to start to create an atmosphere in which people are comfortable with a certain degree of conflict, where there is an obligation to dissent. This had to be pushed forward and safeguarded, because as soon as hierarchy prevails, it can be easily discouraged.
Management Information is not about technology only
It is very easy for business leaders to be swept up in the excitement and opportunities created by some quite incredible advances in technologies. Through our own work with client systems it has however become quite evident that for technology to deliver on its promise, a much wider systemic perspective needs to be taken on enterprise evolution. To this end, the thinking framework adopted is the Business Value ModelÔ as shown in the following diagram.
The essential aspects of this framework are that any and all forms of technology should not be viewed from an Organisation Capacity perspective only, but that:
- There should be clear thinking on how technology should be framed by our strategic intent;
- Such technology adoption should be enabled and supported by our organisation culture and people (talent) profile; and
- That the key business benefit to be realised specifically should include how we will increase customer / stakeholder value.
As human beings we are all victim of cognitive and social biases working against the effective and efficient leveraging of MI. The following table summarises some of the “antidotes”.
|Corporate politics||Objective assessment|
|Ego and self-interest||Purpose beyond the self|
|Blind loyalty||Informed authenticity|
|Unconscious biases||Conscious mindfulness|
|Legacy of the past dictates||Potential of the future pull|
If you are interested in a conversation about this topics, please contact
Dr Henk Greeff (email@example.com)
1. Chris Bradley. January 18, 2018. How biases, politics and egos trump good strategy.
2. McKinsey Quarterly. May 2017. A case study in combating bias.
4. Martin .January 2017.Mangement Information Systems (MIS) Definition and how it works.
5. German Lopez. August 2015 .Hurricane Katrina, in 7 essential facts.
6. Darryl Campbell: March 2019.Redline: The many human errors that brought down the Boeing 737 Max.
7. Peter Barron Stark .2015.Why good leaders make bad decisions.
8. Andrew Campbell.Jo whitehead and Sidney Finkelstein .Harvard business review .2009.Why Good Leaders
Make Bad Decisions