Are your Management Reports Painfully Inadequate?
You have the power to fix it!
Management Reporting is the regular provision of information to decision-makers within an organisation to support their management decisions.
In short the purpose of management reports is to drive good (profitable) outcomes.
But sadly all to often this is not the case – management reports are frequently pages and pages of un-analysed, un-summarised, irrelevant historical data, incapable of assisting in any decision making process….
Management Reports are generated by information management systems – usually the accounting system. Consequently the reports tend to be standard pre-supplied formats, referring primarily to financial outcomes, unfocused and certainly not tailored to specifically reflect the performance of management’s objectives and goals.
Worst of all are the “vanity metrics” – stats and graphs that make the business look good, but do not drive decision making.
Despite most businesses now having electronic accounting systems, and increasingly prolific data available, all too often bad decisions are made:
- decisions that waste money
- decisions that delay activity and lose opportunities
- decisions not to act (maintain the status quo) when innovation is required
I could go on and on and on…
Interestingly, a recent LinkedIn survey revealed these “excuses” as to why management reports fail to deliver good decisions:
- Lack of management guidance (strategic) – 37% of respondents
- Weak and unclear processes – 27% of respondents
- Culture (limited focus on finance) – 20% of respondents
- Inadequate staff – 10% of respondents
- Poor IT infrastructure – 6% of respondents
“Excuses” – these do not identify the key reason behind the failure:
End users want and need to do things with reported information and what they need to do changes over time – reports need to change over time too.
My take on this is 64% of issues (the two groups) should be able to be easily addressed by the Staff building the reports and the Managers making the complaints!
I sometimes reckon that bad managers are like bad drivers – NOBODY ever says – “Oh yes, I am a terrible driver”…
Nor do managers ever ‘fess up’ to being terrible at management!
Why are these people (accountants in this case as it was on an accounting forum) WAITING?
And what are they waiting for? – Someone else to do it for them?
How to improve your Management Reporting
If needs are changing over time, then improving your management reports is simply a matter of continually communicating what you need and why:
Both sides are perfectly capable of driving improvements – i.e. the two biggest excuses are ‘Lack of guidance’ and ‘Weak processes’:
* Report Users – At least 37% of Managers can begin by simply asking more clearly for what they need.
* Report Generators – If you know the management reporting process is broken, then take some initiative and ask for direction.
Do something about it – be proactive – improve your Management Reporting for FREE – everyone will benefit.
Remember, ideally reports are constructed by referring to three primary components: technology, people (individuals, groups, departments), and data/information.
If you are stuck for ideas on where to start, see some of these previous blogs:
Tips if you lack management guidance – Setting Objectives – a 5 step, quick and easy approach
Tips if you are not sure what to report – 4 Steps to Making all Reports Useful
What activity can you initiate that will improve your management reports?
It might be as simple as converting them to a dash-board or removing some of the “vanity metrics”.