Executive comittee

Management board: what is at stake ?

 

Because of the increased complexity of corporate and business environment, senior managers progressively rely on other managers for decisionnal tasks and focus on creating a favorable environment for decisions making. It implies managing decision process quality and legitimating decision against the whole corporation. Such an evolution raises new concerns on decision making about:

  •     The increased specialization of management. It requires involving an increased number of managers to decision making. For example, pricing decision requires a close cooperation between market analysts, product managers, sales managers, production managers and management controllers. The same transversal issue on decision making progresses in all decision making fields: cash requirements, budgeting, business cases, recruitment strategy, ..
  •     The increased decision making complexity. If this subject is not properly addressed, decision making becomes heavy, rigid , frustrating and time consuming. In contrary dealing with it requires simplified decision making processes. Some of the methodologies are:
 
  • Simpler decision steps: An example is to divide budgeting process in a first step aiming at deciding main hypothesis such as resources allocation pricing plan, and investment and a second step aiming at fixing operational objectives and calculating standard costs.
 
  • Incremental decisions: An example could be to change progressively product offers rather that making radical change.
 
  • Business risk coverage: In other words to anticipate on major changes in order to avoid dead end type situations. An approach could be to invest on a diversified technology portfolio to deal with technology uncertainties.
 
  • Reversible decisions: To invest in a way investment could, if necessary, benefit to other projects.
  •     The increased number and strength of stakeholders. Coping with this situation necessitates to communicate more on decision and their rationale. By example shareholders and bankers want more details on cash generation (business plan), customer asks more explanation on the ROI of their purchase, environmentalists want more information concerning carbon emission...
  •     A scattered decisions making due to the increased wingspan of the corporation. To managed it, decisions guide-line have to be enforced : decision preparation methodology, risk exposure policy, decision performances evaluation criteria.

Decision processes organization implementation and forecasting model tools appear as the solutions to those concerns. They enable decision sharing, lower senior management time per decision and finally increase decision reactivity.