Study Cites Lack of Data, Leadership Problems and ill-Defined Processes as Major Factors Behind Decision Dysfunction

Executives admit to significant shortcomings in their companies’ decision-making capabilities, yet few have formal practices and policies in place, says a comprehensive BPM Forum report

PALO ALTO, CA – January 22, 2023 – As business executives face ever-mounting pressure to deliver optimal results to the board and shareholders, a new study shows that a significant percentage of executives are unsatisfied with their companies’ decision making abilities, yet a clear majority have not taken formal steps to improve the process.

In a business environment driven by market globalization and data overload, decisions are more complex, faster and have greater cost implications than ever before. Yet, as illustrated above, the decision making process may be one of the least understood or defined processes in the enterprise; seldom analyzed and almost never enhanced by learning from mistakes and developing best practices.

In Q2 2006, the DecisionROI Institute, a special interest group created by the Business Performance Management (BPM) Forum™ launched an initiative, Business Traction From Better Decision Action, to explore the current state of decision making within the enterprise with suggestions for best practices. The research was underwritten by Cognos, a leader in business intelligence and performance management solutions. The Business Traction report can be downloaded at: http://www.bpmforum.org/reports_list.htm

The study’s findings, compiled via comprehensive qualitative and quantitative research, show dissatisfaction among executives with their companies’ decision making processes and practices. Specifically, those findings include:

  • More than 40 percent of respondents said their companies have “significant” shortcomings when it comes to making decisions
  • More than 70 percent of respondents said bad decisions had either a significant, alarming or degrading impact on their company’s performance
  • There’s a huge confidence gap between C-level titles and the management team: More than 60 percent of C-level execs said they are confident in their decision-making capabilities vs. less than 22 percent for VP/Director/Managers
  • Only 26 percent of organizations surveyed have a decision-making process or policy in place
  • The lead root causes of poor decision making fall primarily in the corporate arena. They are identified as:
    • Poorly defined processes and practices
    • Unclear corporate vision, mission and goals
    • Unwillingness of leaders to take responsibility
    • A lack of reliable, timely information
  • While qualitative discussions with senior executives from a variety of industries and company sizes yield similar decision concerns, they also reveal some robust decision-making policies and processes, but those appear to be a minority

“This Business Traction study tells us that many companies are failing to establish sound practices around people, process and technology,” says Dave Laverty, senior vice president and chief marketing officer at Cognos and DecisionROI Advisory Board member. “Cultural, structural and technological issues are hindering the ability for stakeholders to receive clean and consistent data that enables informed decision making.”

Business Traction From Better Decision Action mines insights of business executives across a wide variety of industries and company sizes. Extensive qualitative interviews were done with 14 DecisionROI Advisory Board members, gaining their perspectives on decision-making obstacles, approaches, processes and best practices. Researchers then queried more than 300 people, from C-level to VP to manager titles via a comprehensive online survey distributed by media and association partners including Executive Decision magazine; Business Trends Quarterly (BTQ); Quality Portal International (QPI); Internet Strategy Forum (ISF); GMI; and the American Strategic Management Institute (ASMI).

About the Business Performance Management (BPM) Forum
The BPM Forum was organized in 2003 and provides support to thousands of senior executives and practitioners representing global enterprises with more than $500 billion in combined annual revenues. The forum’s knowledgeable and influential members excel in strategy, operations, finance, technology, business innovation and boardroom roles. Visit www.BPMForum.org for more information about BPM Forum intellectual capital initiatives, programs, membership, networking services and sponsorship.

About Cognos
Cognos, the world leader in business intelligence and performance management solutions, provides world-class enterprise planning and BI software and services to help companies plan, understand and manage financial and operational performance. Cognos brings together technology, analytical applications, best practices, and a broad network of partners to give customers a complete performance system. The Cognos performance system is an open and adaptive solution that leverages an organization’s ERP, packaged applications, and database investments.  

Cognos serves more than 23,000 customers in more than 135 countries, and its top 100 enterprise customers consistently outperform market indexes. Cognos performance management solutions and services are also available from more than 3,000 worldwide partners and resellers. For more information, visit the Cognos Web site at www.cognos.com.