CEOs Must Address The Flow Of Information Within Their Company

I’m a huge fan of the pragmatic ideas and tools Michael Watkins offers in his book, The First 90 Days. It’s a terrific resource for new leaders at all levels. Plus, it’s equally useful for new hires, current staff taking on new roles, and accelerating the development of internal high performers. For me, there’s simply no better or more comprehensive resource to navigate a new role.

Yet, I’ve discovered there’s something missing, particularly for CEOs. And that missing piece in Watkins’ book has a huge impact on how well the CEO leads the organization in executing strategy.

Research by Gary Neilson, Karla Martin, and Elizabeth Powers revealed that “enterprises fail at execution because they…neglect the most powerful drivers of effectiveness – decision rights and information flow”. (Harvard Business Review, June 2008) Further, they found that only two-thirds of employees at the high-performance organizations in their research believe that important strategic decisions are effectively (and quickly) translated into action. Only 55% of those same firms said information flowed freely. And these are the ‘good guys’!

Remarkably, that’s exactly what Watkins missed—and precisely what CEOs must address.

Watkins limits discussion to managing decisions as part of building a team; while important at any level, that’s only part of the equation for CEOs. Whether new or experienced, CEOs set the tone for how decisions will be taken, establish the frameworks for taking decisions, and ensure decisions are honored. That includes specifying who has the authority to take decisions and in what circumstances. It’s also about choosing the decision style – autonomous, consultative, consensus, or majority – that suits the situation. Basically, decide how you’ll decide, before you decide. Telling people how the decision will be taken defines the role others take in the decision process and encourages transparency. In turn, that builds trust and enhances acceptance because they understand how you reached the decision, irrespective of whether they agree with or like the decision. Quite simply, it’s easier to implement a decision – and a strategy – that you understand and accept.

The flow of information impacts the quality and timeliness of decisions. Efficient and effective information flows mean decision-makers have what they need to take timely, high-quality decisions. Once decisions are taken, information flow also influences alignment and acceptance of the decision. That requires communicating decisions throughout the organization and in multiple directions –vertically within units, horizontally across units, and crosswise to connect the dots among interdependent teams or work flows.

Moreover, CEOs must quickly discern whether key leaders will honor the decisions and share information productively. Decisions that are regularly ignored, or second-guessed, or altered without adding substantive value do not get implemented; they impede strategy execution. Similarly, bottlenecks in the flow of information encourage silos, halt transfer of best practices, and stunt your future leaders’ professional growth. Poor information flow also creates blind spots, a potentially critical error in strategy execution.

What have successful CEOs learned to do? They’ve learned to assess their organization’s performance regarding decision rights and information flow. For example, consider these questions:

• Does everyone know who is accountable for taking which decisions? (decision rights)

• Is the right data getting to the right people, at the right time, so that good decisions are possible? (information flow)

• Does everyone understand the decision, in the same way? (alignment)

• Has each leader accepted the decision? (alignment)

• Is the decision communicated to the right people, at the right time, so that it can be implemented as intended? (decision rights and information flow)

• Do your senior leaders understand their roles in implementing the decision? (decisions rights and information flow)

• Does everyone understand what happens if the decision is not honored? (accountability)

Where you answered ‘no’, perhaps dive more deeply to better understand what’s getting in the way. Then, identify the patterns or themes across all of your answers to isolate root causes. From that, CEOs can build a plan to remedy the situation and get strategy execution on track – whether within the first 90 days, the last 90 days, or anything in between.

Read more: The Benefits Of Thinking Out Loud

Tara J. Rethore: Tara Rethore works with CEOs and Boards to make strategy real and actionable: that’s Strategy for Real™. In industry and as a consultant, Tara has done this across a variety of industries, globally, and in mission-driven and for-profit contexts. She knows what it takes to succeed and how to make strategy real. Currently, Tara serves on the Boards of D+R International, Inc. and JHS Scholarship Fund.