Management Misinformation
Information can misinform decisions as easily as it can inform them. Make sure you know what you have…
I’m watching an organisation gather data for information purposes (I’m not advising them) and am beginning to wonder what they hope to achieve.
The reason that I’m wondering is that there are several questions that you need to ask before you start sending out requests to lots of people for lots of data.
“What do we actually need?”
What can be measured doesn’t always count. Why are you doing this in the first place? What action will you take on receipt of the information? Don’t just invent reports for the sake of it. If you have to, can they replace previous reports (perhaps the ones that are filed “just in case”)?
“Can it be counted?”
What counts can’t always be measured. Can you actually get the data you need? If so, will it be a long, tedious process? Will the results be worth it? If they’re all just “best guesses”, are they worth it?
“What do we want to achieve?”
Seems obvious, but failing to ask this results in requests to submit different data in different formats or from different time periods and a lot of time and money wasted in repeat requests or clarifications.
“How often do we need the data?”
Are you looking at quarterly, half-yearly or annual collections? The more often, the more time, effort (and money) spent, particularly if it’s a manual process.
“How quickly do we need it?”
Often, information is useful only if you get it quickly. If your profit and loss report comes out 3 months after the end of the period, you’ve lost 3 months to take corrective action. What do you need now and what can wait?
“Can it be automated?”
The more data is gathered manually, the more the potential for mistakes. Result: “Rubbish in, rubbish out”. The more you can automate, the better (and the more trustworthy the data, potentially).
“What explanations/clarifications/guidance must we provide?”
Don’t assume that people understand things the way you do. If you allow people to make their own assumptions, you’ll get flawed data.
“Can it be trusted?
If people can credibly claim that the data can’t be trusted, you’ve wasted your time. Where comparisons are involved, are you comparing “like with like”? Is all comparative data gathered using the same methodology, from the same time periods, etc?
”Who’ll provide it and how?”
Knowing who will be accountable for producing your data means you can focus more clearly on their needs in terms of guidance and notice (see below).
“How much notice is needed?”
If all the data is gathered automatically, no problem. If you want lots of numbers gathered manually at the financial year-end, you need to provide enough notice so that people can factor it into their workload. Saying “The Chairman/woman wants it now.” doesn’t justify insufficient notice.
Not addressing these issues means:
Distorted data leading to…
Inconsistent/distorted information leading to…
Misinformation leading to…
Poor decisions based on inconsistent data.
When reviewing data, be aware of any underlying assumptions and/or calculation methods. What you think happened may not be what actually did happen. Check assumptions and ask questions.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy to offer solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website provides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Financial, Leadership, Productivity, Strategy
posted by William Martin @ 11:01
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