Do Your Senior Managers Need Real-Time Information? - David Goldstein

Most senior managers could run their organizations more effectively if they had real-time access to a few key pieces of information. Ken McGee of the Gartner Group interviewed dozens of senior executives at Fortune 1000 companies and found that nearly all of them could list one to three pieces of information that, if available in real-time, would help them run their company far better. McGee documented his findings in Heads Up: How to Anticipate Business Surprises and Seize Opportunities First, Harvard Business School Press, 2004.

What Will They Do with Real-Time Information?

Real-time information allows managers to predict the present. Managers can learn more quickly of events that could influence business performance and react to these events. They can take actions more quickly and these actions can significantly improve organizational performance.

For many organizations, monitoring the sales pipeline is critical. Consider an executive dashboard that provides senior managers with daily information on sales by product line and channel compared to plan. The VP of Sales notes that she is falling behind her monthly target. She drills down to identify the product line and region that is falling short. She reallocates resources, moving them from long-term projects to working with the regional sales reps to increase sales to meet the monthly target.

Given the right real-time information, senior managers will learn of problems sooner, determine why these problems occur, and make better decisions. Haeckel and Nolan call this the “business learning loop (see Managing by Wire, HBR, 1993) and draw an analogy between managers and fighter pilots. Managers sense, interpret, decide and act. Fighter pilots observe, orient, decide and act.

The Business Learning Loop

Managers must first sense changes in the environment, typically by receiving a phone call or e-mail or possibly by reviewing a management report. Next, they interpret these changes, often by drilling down to their root cause, again through a combination of interactions with colleagues and analysis of data. Then they decide on a course of action based on these new insights and act to implement this course of action. This learning loop—sense, interpret, decide and act—repeats itself over and over again in organizations.

Having the right information at the right time to sense changes and to interpret them allows managers to execute this loop faster. The faster managers execute the business learning loop, the better they respond to changes in the environment, and the more profitable their organizations are.

What Does Real-Time Mean for Senior Managers?

For fighter pilots, real-time information must be received within fractions of a second of when the event occurs. For most managers, however, daily or even weekly information is ‘real-time enough.’ McGee found that typically managers are not receiving the data on critical business processes they need to effectively execute the business learning loop. In most cases, the real-time information senior managers need to make informed decisions is already being collected in their organization’s transaction processing systems. By aggregating and summarizing the vast amount of data into relevant information for senior managers, today’s IT managers have the opportunity to make a significant impact on the performance of their organization.

Want to Learn More?

KMA and Microsoft will be sponsoring an Executive Breakfast on December 8 at the Cambridge Marriott, entitled “Make Real-Time Information Work for Your Organization.” At the session you will learn how to deliver real-time information to your organization’s senior management team. At the event, you will also receive a complimentary copy of Heads Up. If you have any questions or comments on this article or on the Executive Breakfast, please send me an e-mail (david@kmainc.com).