How can we expect the leadership of our organizations to engage in strategic thinking, if they don’t have the relevant information that would feed it?
When I start working with a strategy client, I will ask for five years of data for financials, membership, and so on.
And a lot of clients struggle to find that for me. They have it, but it’s buried in their systems. They may use data a great deal, but they are often focused on the current and immediate past, and if I produce a five-year graph, it’s sometimes the first time that’s happened.
Similarly, when I’ve sat on a board, I’ve been provided with financials, but typically only seeing this year (year-to-date or actual), and last year. Maybe during a planning process, we’d look back a few more years to get program and financial data over time.
If my practice and experience is anything to go by, it’s just not as a common a habit as it should be for leadership – boards, management teams – to look at quantitative data over a longer period than a year or two.
Why is that a problem?
- Short-term data encourages short-term thinking. If you have a board that tends to go in the weeds, or a management team that has trouble thinking beyond the current budget year, maybe this is part of the issue.
- Stewardship is a long-term responsibility. Unless your organization is teetering on the brink of bankruptcy, stewardship requires thinking beyond the current year. It requires building for the future, maybe farther out than the tenure of anyone on the board right now. Boards have a duty of foresight, and this doesn’t mean just next month.
- Staff want to be seen as strategic thinkers. In some organizations, staff are seen as more purely administrative, with the board taking on all the strategic thinking. If this is the case, and you want to change that, one way is to provide strategic-level data. Staff are the ones who can connect the week-over-week data to the long-term trends most efficiently, but only if you actually look at the data that way yourself, and then share your findings with the board.
- There’s a risk of overreacting to temporary impacts. What is going on this year? Is it a blip or a trend? You know that partly by applying your judgement, and partly by knowing the trends – internal and external. Without knowing the longer-term trends, there is not a shared understanding of what the current numbers mean.
The need to feed…
Now, I worked for a long time at the headquarters of a major bank. Nobody appreciates data like banking executives, I can tell you. And, especially for a smaller organization, there is a risk of spending too much time on data reporting and not enough time on thinking about the implications of the data we already see. (And not enough time doing.) So there are indeed risks of overreporting. (This is why the right metrics are crucial.)
But how can we expect strategic thinking if we don’t provide information on a strategic level?
If you’d like to discuss how we can help you use your data to make good strategic decisions, please get in touch.