Your CEO calls you into his office and informs you that the management reports he receives are inaccurate and the reports that support cross functional organization needs must be manually...

Your CEO calls you into his office and informs you that the management reports he receives are inaccurate and the reports that support cross functional organization needs must be manually prepared.  The CEO would like you to provide an explanation of possible causes for lack of cross functional data and the possible causes for the information deficiencies.  He would like you to provide a recommendation to resolve these issues.

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Stephen Holliday | College Teacher | (Level 1) Distinguished Educator

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As your question implies, upper-level management within an organization almost routinely complains about either the quality of information passed up through the management chain or the timeliness of such information.  Management reports, which usually contain information necessary to understand how a company is doing within its business sector during a given period, almost always have errors or apparent discrepancies (the reasons for which I'll discuss below) and cross-functional reports--that is, reports that indicate how groups within companies interact with each other and what they need to function--are equally problematic.  Both problems plague virtually every industry and most companies, but they are, if not completely resolvable, at least mitigated.

In many industries, management data comes from a variety of sources, both internal and external.  In the financial industry, for example, most data that a company needs to operate is generated externally, sometimes by government entities, sometimes by competitors, and often by information vendors--that is, companies that aggregate and then sell or provide information.  The inherent problem is that much of this information is based on different timelines--some of the information considered current is 30 days old; other information considered current is 60 days old; some information considered current is even 90 days old.  Upper-level management often does not understand the un-evenness of the timeline for this information, so when a CEO or COO looks at a report, he or she does not realize that, instead of comparing apples to apples (all information is 30 days old), he or she is comparing apples (30-day-old information) to oranges (60-day-old information).  Everyone in the management chain must understand how and when the information is generated in order to fully understand how to react to the information.  This problem is constant in any information-driven organization.

Often, one cannot do anything to resolve the way information flows into an organization.  The best solution is to ensure that everyone who is looking at and depending upon the information understands what "current" information is--it may be a week in arrears, a month, two months or longer.  Once decision-makers understand the currency (or delinquency) of the information, decisions can be made on a reasonable basis simply because a common understanding exists about the time period represented by critical information.  In many cases, senior management can then request tailored reports that use only information generated on the same timeline--a true "apples to apples" approach.

Information that supports the function of several departments within a company poses unique problems.  In many situations in which cross-functional organization is not working well, the problem is that individual groups are withholding information necessary for another group to thrive and succeed--usually on the theory that knowledge is power, and many groups try to grab more power than others.  The easiest fix for this problem is for senior management to require functional groups to meet regularly to share 100% of the information that has been requested by another group.  Senior management, as opposed to the heads of functional groups, has the power to make this happen.  More importantly, senior management can punish those who do not comply with this effort.  This may sound simplistic, but this solution is used every day in most corporations that rely on timely information to operate.  In many cases, this problem results not from power plays but from ignorance--groups simply are unaware of what other groups need to know.  The solution is for group or functional managers to understand what information must be shared in order for another group to carry out its tasks in a timely manner.  In short, groups need to talk to each other.

In an ideal corporate world, everyone in a corporation is driven by the same goal--usually profit--but many people within corporations seek power as much as profit, and information is, for better or worse, power.  To mitigate the influence of the power-mongers, the corporation must understand how its critical information comes into the company, who has access to it, and then who is responsible for distributing the information both up the chain of management and among functional groups.  Lastly, everyone involved must understand that a break in the chain leads to a broken company.

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