Late Information Makes Rational People Look Wrong - The SPRIITE Series/Article 5 of 9

A sales manager at a company I advised was pushing hard on a product line the leadership team had decided, six weeks earlier, to wind down. He was doing it well. He had his team focused, he had a promotion running, and he was winning business the company had already decided it did not want.

Nobody had told him. The decision had been made in a leadership meeting he was not in, recorded in notes that were never circulated, and mentioned in passing at a company update he missed because he was at a customer site. From where he sat, he was doing his job correctly. From the corner office, he looked like he was ignoring strategy.

Information is the fourth of the seven conditions, and this is its most expensive failure. The problem is rarely bad data. It is late data, or data that never made the trip at all.

What information means here

Information asks whether the numbers, plans, and changes in direction are trustworthy, and whether they reach the people who need them while they are still useful. That last clause carries most of the weight.

Companies tend to evaluate their reporting on accuracy alone. Accuracy is one of four things that have to be true, and in most small and midsize companies it is not the one that is failing. The other three are timing, altitude, and form.

A monthly financial package that lands on the eighteenth is a historical document. Whatever it tells you about last month, the month it describes is more than half gone by the time anyone reads it. It is fine as a record. It is useless as a steering instrument, and companies that steer with it are always correcting late.

The four ways it fails

Integrity is the first, and it is the one that has to be true before the others matter. The number has to be produced the same way every period, and the people using it have to agree on what it counts. A company where finance and operations report different revenue for the same month does not have a reporting cadence problem. It has a definitions problem, and no amount of frequency fixes it. This is worth checking first and it is usually quick to check.

Timing is the second. The number arrives after the window in which anyone could have done something about it. A team that learns on the eighteenth that margin slipped in the previous month has already run eighteen days of the current month the same way.

Altitude is the third. Financial and operating information often stops at the leadership team, on the theory that it is sensitive or that nobody below that level needs it. Meanwhile the people whose daily choices actually move those numbers are working without them. A purchasing manager who never sees inventory turns is making buying decisions with half the picture, and then gets a performance conversation about a result they were never shown.

Form is the fourth. Information delivered in a format that requires interpretation does not get used. A forty-tab workbook is not a reporting system. If a manager cannot look at their part of the business and know within thirty seconds whether it is on track, the reporting has failed regardless of how complete it is.

What good looks like in practice

The companies that score well here tend to have a few unglamorous habits in common.

There is a small number of measures each team sees weekly, not monthly, and each one has a target beside it. I have made the case for that cadence at the leadership level before, in the articles on the operating rhythm and the scorecard.

What this condition adds to those is altitude and form. A weekly leadership scorecard is worth a great deal and it does nothing for a purchasing manager who never sees it.

Decisions get communicated by their owner, deliberately, to everyone affected, before those people hear it secondhand. This sounds obvious and it is the single most commonly skipped step in the companies I have worked with. A decision that lives in a leadership team's shared understanding but was never told to anyone is not a decision. It is a plan to be surprised later.

And numbers travel down further than most owners are comfortable with at first, with the obvious exclusions, compensation being the main one. Most of the owners I have watched open the books a level deeper than felt natural told me afterward that the conversation quality improved. That is not a promise, and there are situations where it is the wrong move, including an owner heading into a sale or one with covenants or minority shareholders to consider. Think about your own circumstances before you widen access.

Scoring information honestly

A two looks like this. The main reporting is monthly and lands more than two weeks after close. Managers below the leadership team cannot name the numbers they are accountable for. People routinely learn about decisions through the rumor mill or by running into the consequences.

A four looks like this. Each team sees a short set of measures weekly against targets, and everyone agrees on what those KPIs count. Managers can state their own numbers without looking them up. Changes in direction get communicated on purpose by the person who made the decision, and the people affected hear it from that person first.

This is the condition where I see the biggest gap between what leadership scores and what their teams score, and the gap goes in one direction almost every time. Leadership scores information high because they have all of it. They are scoring their own access, and they are the only people in the company who have it.

The sales manager in the opening story eventually found out about the decision. He was frustrated, and he was right to be. If your people are making choices that look wrong from where you sit, check what they knew and when they knew it before you conclude anything about their judgment. And if you want help building reporting that people below the leadership team can actually use, my door is open.