Page 88 - Performance Leadership

Chapter 5 Operational and Analytical Alignment • 77

constituents; their decisions should be based on facts too. On a more
strategic level, facts follow decisions. Running the numbers and put-
ting together a business plan is done after the topic has been discussed
in the senior leadership team meeting.
Not by complete coincidence do these two ways of making decisions
mimic the two loops of management. The obvious conclusion is that
making all management information real time does not make sense;
not all decisions are of the “decisions follow facts” kind. Senior man-
agers, who often complain they are drawn into operational issues too
much, should be careful in asking for more real-time information, as
most likely this will involve them even more in operational issues.
In reality, it can be a good thing to have a short time delay between
an alert and a response. Like with a thermostat, continuously increas-
ing and decreasing the temperature level will make the temperature in
the room less than stable; in fact, the amplitudes will become bigger
and bigger. An example from the business environment that most of us
have experienced is dealing with e-mail. How many times has it hap-
pened that you return to the office after a day having been offline, to
find an e-mail urgently asking for your help, and another e-mail a short
while later stating “never mind, it has been fixed already.”
There should be a well-defined path down the management chain
and a clear escalation path up. Senior management should not drill
down to the operational level. Most alerts should be dealt with by lower
and middle managers. Those alerts that reach senior managers should
concern more complex, far-reaching problems and only the most acute
of all others. In this way, managers are not overburdened with alerts, and
problems can be dealt with by the people best suited to handle them.
A flood of alerts could lead to inertia. Managers will start to ignore
alerts if there are simply too many. How about that one alert that
actually was important? Even worse, a flood of alerts could lead senior
management to micromanage their staff. Executives typically deal with
escalated problems. If problems are escalated to a senior level too fast,
it is assumed to be an example of a frequent problem, and the man-
ager takes strong action. When a small issue is unnecessarily escalated,
the reaction may be out of proportion.
The most important consideration in selecting what information
needs to be in real time is the type of follow-up. If there are no processes