Organisations understand that decision making is a distributed function, involving lots of different people throughout their hierarchies. But they also recognise that there are two executives with the knowledge to help their organisations improve decision making: Chief Financial Officers (CFOs) and Chief Information Officers (CIOs).
The dynamics of decision-making
Bad decisions are made in organisations every day. Whether it's squishy goals, competing interests, bad assumptions, not enough time, insufficient information, or simply not enough talent, there are countless ways to miss the mark. And when you add in the complexity of post-digital disruption – the deluge of data enabled by social, mobile, and cloud technologies – the decisions that matter may become more complicated than ever.
Decision quality: Point of impact for CFOs and CIOs
Of course, many decisions that matter involve using information from many different sources. To implement an effective pricing strategy, for example, requires assessing information from a multitude of competitors. To set appropriate targets for future hiring requires developing adequate estimates for growth. And making new capital investments depends on making assumptions about timing, markets, and the cost of capital.
Yet, while every organisation is different, it is possible to construct a working list of typical decisions that matter across organisations and see where input from both CFOs and CIOs could thwart potential biases and blind spots. And while CFOs and CIOs are not personally responsible for every area of the business, their roles can significantly influence those who are.
The CIO connection
Many CFOs have found a willing partner in the CIO – a person who can bring several specific, powerful capabilities to the table. Central to those capabilities is the ability to identify and deliver the right data at the right time to run the business. Not only do CIOs traffic in the currency of data every day, they typically bring a completely different way of thinking about that information. For CFOs itching to eliminate their blind spots, CIOs can be instrumental, particularly in the following areas:
- Big data
As business leaders try to crack the code on big data, the tools and skills at the CIO's disposal have begun to take on new relevance. Whether the challenge is to simply capture these immense and complex data sets, or to analyse and visualise the underlying data in new ways, CIOs can be instrumental. When it comes to making smarter, more informed decisions, big data represents a potential windfall – but only if you know what to do with it. - Information visualisation
Information visualisation is another area where CIOs can bring a lot of value. As organisations push decision-making information out to the broader workforce, they should improve how that information is presented. CIOs are at the forefront of visualisation and user experience. - Predictive analytics
The practice of business analytics is moving quickly from hindsight to insight to foresight – particularly the ability to predict what will likely happen, using a mix of current and historical data, as well as information from external sources. While this is certainly not only a technological challenge, technology has a big role to play, and CIOs are important partners to the CFO in effectively leveraging data management and business-intelligence techniques for fact-based and predictive decision-making.
A call to excellence
The cost of poor business decision-making affects companies every day. Even organisations with leaders who know better often fail to avoid some of the most basic errors. Moreover, individuals and groups tasked with making decisions are sometimes simply not able to self-correct for their biases. For CFOs looking to improve the quality of decision-making in their organisations, there are plenty of peers who can help. But there may be no better door to knock on first than the one that says "CIO."
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