The CFO at a $multi-billion manufacturing company gave me this awesome analogy:
"Picture yourself on the bridge of an ocean-going freighter. As Captain, it's your job to guide that ship out of harbour and to sail it to New York. You're allowed a map and its got the voyage plotted but once you're given a look at the map, all the forward-facing windows are blacked out. You can't see where you're going, you can only see where you've been. The freighter moves forwards. You get access to radar but it has a limited field and you only get that information once a month; and at best it's between 5 and 20 days old."
In this analogy, organisations trying to make or profit are the freighter. Chances are, a budget (the map) is set at the beginning of the financial year and everyone in the organisation tries to hit the budget by the end of the year â€“ just like the freighter hoping to get to New York. Like the freighter, most organisations have no visibility of the future. They don't know what they need to change when, which direction or market segment should be targeted, what impeding events might mean a change in the current course. Many CEO's are given a limited view (radar) of the organisations immediate future so decision making is run on gut feel alone (heard of the titanic anyone?). So for many organisations, the last month's results are all they have to help predict what their next move should be. This data however is rear-view and already out of date information.
So how do you stop this behaviour, break free and give your decisions-makers better information for their decision making? Here's our top 6 things to do to create an environment for better decision making, whether you're a CEO, CFO , Controller or Captain.
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