In big companies, the least informed person — the CEO — is making the most important decisions. I would go so far as to say that the information flow in any large company is most likely flawed. Important information is simply too far down the company hierarchy to underpin good decisions. Today, that information is often in a language that is not understood by the CEO or any board member.
The weakest decision makers are inside multinational/global corporations. They rely on a decentralized decision policy where each unit must perform. The only governance tool for top management in global champions becomes the annual report from subsidiaries, combined with the human willingness to provide information.
The most recent disaster is the Volkswagen scandal. It is most certainly an error in decision making that probably passed through unnoticed at higher levels within the company. Information flow inside the company and across borders/languages probably contributed to this scandal. A board of German directors would surely not have agreed to cheat…or did they?
- What if – all CEOs can have the information they need and which is available inside their companies at their fingertips?
- What if – this information is combined with external rules and regulations that must be followed?
- What if – every item in the production line is linked to that information and these items could be drilled down to as regards sales, use, cost and productivity?
- What if – all this information was available and was updated daily in any of the company languages?
It would mean that the CEO would be able to check any part of the business and its operations as well as external factors to underpin her decisions. The CEO would be able to visually observe the company administration combined with sales and the production floor in any country. The CEO would even be able to ask questions like, “why are we still producing Item257-c when this product doesn’t sell, according to the sales department?” They would simply have to click on a knowledge map to see the concepts and their relationships, viewing the company as a large scale Multilingual Knowledge System.
Is this a management utopia for the far future? Not necessarily! Just a bit of work with knowledge and data experts is needed. Your company fingerprint needs to be constructed and deployed on relevant data, and we can tell you how!
Stay as is, and CEOs and company boards will continue to make awful mistakes that sometimes cost companies their future!
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