One would hope that a desire to continuously improve would be motivation enough to improve decision-making skills. For companies that need external motivation to improve in this area, however, the recession has provided it. According to a new study from the Economist Intelligence Unit, many executives are changing their decision-making processes in light of the current economic realities.
For instance, many are seeking a greater diversity in their sources of information, according to survey results summarized in the study "Management magnified: Getting ahead in a recession by making better decisions." According to the study, "The more diverse the inputs, the more nuanced the decisions."
The survey of 229 executives worldwide was conducted in May.
The survey results show 46% of respondents are seeking greater insights from middle managers, 57% cited the importance of customers and 33% mentioned capital providers. Other key results show:
- Two-thirds of those surveyed said the most important source for good decision-making came from the financial and operational information held by the finance function and interpreted by the CFO. Why? The report states, "This is not just because finance tracks and aggregates the company's financial and operational information. It also reflects a particular way of seeing things: CFOs tend to have a conservative and skeptical attitude that is essential for companies struggling to survive as well as for those considering new initiatives."
- Decisions at the worst-hit companies focused on short-term, tactical moves rather than on long-term strategy. That said, "Executing a long-term strategy is not a luxury reserved for times of economic growth. Companies cannot make tactical decisions without a vision of where they want to be in the long term," the report authors note.
- The recession has led 53% of respondents to focus more closely on key customers.
- 45% of survey respondents report that decision-making in their companies has become more centralized during the recession.
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