An interesting CFO survey on their experiences in meeting the promise of “data driven decision making” got me thinking.

We are trying to move away from a solely “rear view mirror” approach to lagging indicators of past performance 

We are increasingly focused on LEADING Key Performance Indicators (KPIs) that measure and expose progress toward goals, process defects and associated changes needed.

Leading indicators and diagnostics improve process visibility and bring clarity to actions required, leading to a better understanding of how to manage resources to achieve better outcomes.

Although we all have a lot more data at our fingertips, there there are still some critical barriers to success in “data driven decision making”.

The survey suggests that the biggest inhibitor is the inability to describe the Key Business Questions” (KBQs) and related data.

Sounds simple right?

But the KBQs are much harder to define than we assume. Data experts assume the business stakeholders already know them and business leaders know the target outcomes they are aiming for, but not necessarily the key operational process questions, and thus information, required to get there . . .

The survey asked “To what extent have you defined key business questions (KBQs) that determine which key performance indicators (KPIs) and metrics you analyze?“

Whilst the answers were positive with regard to “rear view mirror” performance, the results were universally poor when related to “what will happen” (progress toward goals) and “what needs to happen” (process defects and needed changes).

Whilst this survey focusses on the CFO and the “big picture” decisions, the same applies to daily process and activity focused Continuous Improvement (CI) decisions  . . . . .

Makes you think . . . 

There may be 4 types of KBQs . .

1. Strategic Organizational KBQs (for the CEO and leadership team)
2. Strategic Finance KBQs (for the CFO)
3. Strategic Process KBQs (for the Global Process Owner (GPO))
4. Operational Process KBQs (for the Service Delivery / CI Lead)

If we focus on the Key Business Questions tor our specific scope (above), and align them to the data needed to focus and execute on performance improvement, “data driven decision making” can finally become an established practice, rather than just an aspiration.

The survey report from AAFCPAs entitled “Insights from CFOs on Data Use” can be accessed here . . .

Thanks for reading . . .