The Problem and The Solution
Managing a business is a great intellectual challenge. Whether you own your business, are a business leader, or help to manage a business, you have to handle an intensifying torrent of data.
The challenge in today’s environment is to be able to turn data into information and transform information into knowledge.
Many managers do not feel capable of doing everything they’d like to with their data for various reasons:
… because the information management tools available make it difficult or impossible;
… because they have to rely on broad teams of people to make decisions – and these teams (permanent or temporary, multi-level, multi-country, multi-divisional, multi-product, and multi-everything) don’t have the tools they need either;
… because new technologies mean the amount and variety of information that management has to process is growing exponentially.
So something’s not getting done – yet this is about key business drivers:
… identifying what depends on what, and how it is sensitive to business performance;
… knowing how this will develop over time;
… understanding what it takes to manage your drivers;
… sending clear sub-goals to other BMP processes; and most importantly;
… unifying the entire organisation around your drivers.
Of all the smart business leaders that I have met, the most successful build their decisions around the business drivers, having ‘in-time’ thinking. They make decisions only after considering:
1. historical business performance (financials showing how they got where they are)
2. probable future development of the company (what financials will look like under various ‘what if’ scenarios)
3. what’s happening with their market (which ‘what if’ to focus on)
Managers that make decisions taking into account only past performance, with no clear idea of the decision’s impact on the future, will be wrong 8 out of 10 times.