It’s 10 minutes to midnight and the clock is ticking, for leaders who are yet to embrace tools to help them make decisions based on evidence in the form of data, rather than old-fashioned gut feeling.
Worryingly, research suggests a significant proportion of Australian executives are still relying on the latter, augmented by spreadsheets and expensive legacy tools, to inform their planning and decision-making processes.
Intuition was the basis of C-suite decision making in most organisations, with just 61% of those surveyed stating their process was ‘somewhat’ guided by data.
Their peers abroad have already gotten with the program, around half of all international respondents claimed their decision making was ‘highly data-driven’.
High stakes: Decision making for the digital era
As digital disruption continues to up-end a host of traditional industries, business models and ways of working, timely and well-informed decision making has never been more important.
International management consultancy Deloitte refers to the situation in Australia as a ‘short fuse, big bang’ situation. In its 2017 report of the same name, the firm predicted a third of the country’s economy faced imminent and major digital disruption.
The report stresses the importance of organisations understanding the implications of disruption and developing ‘specific, pragmatic and proportionate’ responses.
Sectors including finance, retail, media and ICT were first in the firing line, while heavy industries such as mining and construction, along with the education and healthcare sectors, had more time to plan and adapt.
No longer a one-off exercise
Not only do organisations need to plan for seismic change, they need to keep on doing it, not once, but continually.
Setting three and five-year plans and executing them without deviation is an inappropriate and risky approach in the digital era. At a time when new competitors can emerge overnight and change the game for good and all, planning needs to be more continuous fluid process than a one-off exercise.
Companies which can plan and execute on the fly stand a better chance of succeeding in a changing environment but it’s a tall order without tools to extract and assemble current data to support new strategies, programs and initiatives.
While intuition and gut feeling may have served experienced leaders very well in days of yore, their currency is questionable in the brave new world being ushered in by the fourth industrial revolution.
The planning and action disconnect
Businesses are moving in the right direction, albeit more slowly than they could be. Recent research showed that 74% of respondents were planning more frequently than they did five years ago.
Good news perhaps – except there’s a large gulf between thought and action. Even though businesses are planning more, they’re failing to convert strategy into action. Only 15% of respondents stated they were able to execute on all their plans while three quarters reported they could take months to incorporate market changes in their planning.
In fact, many companies appear to spend so long getting things exactly right that their plans are outdated before they begin – hardly a formula for a success in an era for which change at warp speed is a hallmark.
The right tools make it easier to exploit data and extract the insights necessary for cogent decision making, at speed. Organisations which recognise this and adopt a dynamic, intelligent and collaborative approach to planning will be well placed to withstand the risks and take advantage of the opportunities digital disruption presents. Those that fail to do so may find themselves at the back of the pack.
Article by Patrick Elliott, Anaplan A/NZ Regional VP