For the last twenty years, professionals in business intelligence, data warehousing, and lately enterprise performance management have complained that their work deserves more executive attention. In fact, it should rank first on the CEO agenda, we claim. After all, isn't the CEO busy with decision-making every day? And can't he or she use all the help and support that’s available?
After all this time, though, you have to wonder whether the fundamental problem is not executives’ ignorance of all the wonderful things you can do with the technologies, processes and methodologies attached to performance management. Perhaps it’s the other way around. Could it be that we professionals actually don't really understand what executive decision-making is all about?
A few years ago I decided to research executive decision-making to try to understand it a little bit better. I found that the more strategic decision-making gets, the more it’s fraught with dilemmas. A dilemma is a difficult choice of some sort, and there are multiple types:
• “This-versus-that” dilemmas are about resource constraints. There’s simply not enough money, time or manpower to tackle all business opportunities — which one to choose?
• “You-versus-me” dilemmas are about the needs of the stakeholders in the company. Shareholder requirements do not necessarily match the needs of employees. Consumers pose difficult dilemmas, too: They require the lowest possible price, but they also increasingly demand that a company should be socially responsible and have a green approach as well.
• “Now-versus-later” dilemmas are about the need to find a way to satisfy short-term requirements, such as quarterly profitability, while ensuring long-term success, for example by investing in innovation.
In our profession, decision support (or give it any fancy name you want), we have focused mostly on an analytical approach. We talk about about simple analytics, such as variance analysis, drill-down, and management by exception, and we discuss more complex approaches such as data mining and predictive analytics. Yet, important as these techniques are, analytics are not very helpful in dealing with dilemmas. Analysis — the art of taking things apart until you understand how they work — only confirms and strengthens dilemmas. No wonder that executives tend to value business intelligence only for tactical issues.
A different toolkit is needed for strategic decision-making: not analysis, but the opposite, synthesis. Synthesis is the process of taking multiple, often contradictory, ideas and fusing them to create a single picture. By bringing together opposite positions, you fundamentally solve business problems, and you raise your organization to a new level of insight.
Think about this example: Most organizations have been centralizing and decentralizing for decades, without fundamentally moving forward. All they achieved was to exchange one set of problems for another, eventually reverting to the original set. The pendulum keeps swinging, and a stable synthesis between centralization and decentralization is never reached.