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Performance Improvement, vol. 49, no. 1, January 2010©2010 International Society for Performance Improvement

Published online in Wiley InterScience (www.interscience.wiley.com) • DOI: 10.1002/pfi.20117

MAKING BETTER DECISIONS BY BETTER MANAGING INFORMATION

D. Keith Denton, PhD

This article examines how to improve decision making. We tend to prefer simplified thinking

and revise our bias only when we are under overwhelming pressure. The article suggests some

ways to better use information technology and offers a prioritizing approach to using

information to produce better decisions.

THE MOST COMMON sort of large-scale class actionlawsuit alleges that securities fraud is one brought againstpublic corporations and senior management for conceal-ing bad news from investors, even though the companywas not in the process of selling its own shares at the time(Langevoort, 1997). Typically it involved some form ofproduct failure that was kept from public view until thelast possible moment, resulting in a rapid decline of mar-ket price. Managers knew the problems but kept an opti-mistic public face. So why would managers mislead stockmarket investors? Is it simply that they are basically dis-honest and bad people?

Probably not. In fact, in all probability, they are a lotlike you and me: busy people who consume largeamounts of information in their decision making andtheir thoughts are always going to need to simplify ormake information more manageable. We humans have abias for simplified thinking and revise our bias or priorattitudes, beliefs, and behaviors only under overwhelmingpressure from the outside. We tend to resist, consciouslyor unconsciously, new information or changes in ouractions. We typically make changes and incorporate newinformation only if it is significant and unusual. Changeproduces anxiety, and we do not like to be anxious. Weignore risks that have little chance of occurring. We willconsistently underestimate threats to our success.

In fact, we like certainties, not uncertainties. Groupsare even worse than individuals, but for different reasons.What happens when members bring up information thatimplies that group decision making has failed to considersomething? The result is stress. Without realizing it,members have a tendency to dismiss or ignore potential

hot-water signals, with the result that decision making isless informed.

MANAGING YOUR REALITYIt is easy to get overcome with detail and lose focus. AlanLightman, a humanities professor and physics lecturer atMIT, points out that the results of the information floodand the fast pace of high-technology, information-sharing systems often are bad decisions because managersfeel rushed (Krill, 2000).

Making consistently good decisions is going to occuronly when there is a better understanding of the risk ofinformation overload. Recognition of this risk helps indi-viduals and organizations develop an information man-agement strategy that works. The right informationtechnology tools can help transform data into usefulknowledge.

Too much information can be crippling to individualsand organizations. The burden can be so heavy that someexperts are even predicting the demise of strategic think-ing. Nobody has the time or inclination to think longterm anymore (McCune, 1998). There are indications offaulty decision making occurring due to informationoverload everywhere. Few people monitor how relevantinformation is coming in and going out of their business.They have no precise way to keep focused on what is crit-ical to their success.

Using technology without specific information man-agement strategies has resulted in some rather odd factsof the electronic age. Computer manufacturers hadpromised the paperless office; instead, what companies

20 www.ispi.org • DOI: 10.1002/pfi • JANUARY 2010

received were shipments of office paper, which has risen51% since 1983. Americans now possess 148.6 million email addresses, cellular phones, pagers, fax machines,voice mailboxes, and answering machines—up 365% from40.7 million. Throw in 170 million standard-issue tele-phones on top of that, and you will have a better picture ofhow overwhelmed we are with information. Those figureswere provided in 1994; technology since then has contin-ued to grow at an enormous rate. In 1998, a study releasedby Pitney Bowes showed that the average businessperson inthe United States, Canada, and the United Kingdom sendsor receives 190 messages a day (McCune, 1998). Withinthese 190 communications each day are 30 emails, 22 voicemessages, 4 pager beeps, and 3 express mailings, along withfaxes, phone calls, and letters (Martin, 1998).

This indiscriminate knowledge sharing is not confinedto electronic information. Employees are regularly bom-barded with performance improvement booklets, safetymanuals, employee directories, corporate resource direc-tories, and more. The typical Fortune 500 company pub-lishes thousands of such documents annually.

Research shows that people who are faced with vastamounts of information and forced to make decisionsquickly can be overcome by stress. Telephone surveys ofbusiness executives in the United Kingdom, the UnitedStates, Australia, Hong Kong, and Singapore discoveredthat 49% of the respondents feel they are often unable tohandle the enormous volumes of information theyreceive (Bodil, 1997). Psychologist David Lewis notes thatmany of the CEOs he works with are tense, irritable, andoverwhelmed: 49% say they are unable to handle the vastamounts of information that come their way, and 62%admit their business relationships suffer. Forty-three per-cent of managers think that important decisions aredelayed, and their ability to make decisions is affected asa result of having too much information (Laabs, 1999).

PUSH THE RIGHT INFORMATIONMichael Hammer, an author and consultant who helpeddevelop the reengineering movement of the 1990s, doesnot worry about creating more great managers. He wouldbe happy just having a lot fewer bad ones: “I’d like to turnthe bad managers into adequate managers” (Whiting,2002, p. 72). Hammer says that information systems inthe past have been too passive, built by technologists whofocused on providing access to information in customermanagement or financial systems. “There’s a presump-tion,” he notes, “that a businessperson knows what theywant to ask. That’s a fiction. Managers need informa-tion pushed to them and decision-making guidance”(Whiting, 2002, p. 72).

Peter Drucker (1998) reasoned that past computer andinformation technology had little impact on strategicdecisions. He noted that the use of information technol-ogy (IT) had little to do with CEOs deciding whether tobuild a new office building or school, for example, sinceIT focuses on the collection, storage, transmission, analy-sis, and representation of information. As a result, thecommon approach to IT presumably has had no notice-able impact on any manager’s decision to enter a particu-lar market or decide issues involving mergers. When hewrote, Drucker noted that the IT revolution so far hadbeen a producer of data rather than a producer of infor-mation and pointed out that the strategic value, and, thus,the usefulness, of IT had been extremely limited to thattime.

Information technology, like other aspects of manage-ment, can be useful to decision making by rethinking thepurpose of information. This can occur by first focusingon the context of what and how information is usedrather than simply adding more and more content. ShelHoltz describes one approach to giving her people con-tent or big picture information about what is going onthrough online training at Sandia National Labs inAlbuquerque, New Mexico: “At Sandia, employees seekingto be certified at a new level can determine if the trainingrequired for that certification is available online.Employees can launch the appropriate training moduleand study it at their own pace, from their desktops, andwhen they have the time” (Cohen, 1997, p. 50).

At Cisco Systems, for example, employees can find outcareer information by following a career path through asimple point-and-click interface on the company’s inter-nal Web: “For each career choice an employee makes on achart, the chart shows training that needs to be completedin order to advance to the next level. The chart also showstraining that would be a good idea for the employee’s owndevelopment along the line,” reports Holtz (Cohen, 1997,p. 50).

Research shows that peoplewho are faced with vastamounts of information andforced to make decisionsquickly can be overcome bystress.

Performance Improvement • Volume 49 • Number 1 • DOI: 10.1002/pfi 21

FOCUS ON THE CRITICAL STUFFThe Marine Corps uses what it calls the “70% solution.” Ifyou have 70% of the information, have done 70% of theanalysis, and feel 70% confident, then move. The logic issimple: a less-than-ideal action, swiftly executed, stands achance of success, whereas no action stands no chance.The worst decision is to make no decision at all (Useem &Useem, 2005).

To be able to simplify organizational life and improvedecision-making processes, human performance tech-nology (HPT) professionals can help individual per-formers and decision makers set priorities. After all, theusefulness of any decision-making technology dependsin no small part on first focusing on what is important.There are all sorts of decision-making tools. For exam-ple, email filters screen out less critical messages.

New information technologies that help filter andredirect email and telephone calls can sometimes help,but ultimately management decision making is about set-ting the essential few priorities. Bad management deci-sions are often due to simply being overcome with theinformation or not having the right information.

What’s Your “A” List?“The compressed time for decision making is puttingmore demands than ever on our time,” says WayneCascio, a professor of management at the University ofColorado in Denver (Krill, 2000, p. 23). “The Web haspresented users with huge amounts of information, andsome feel that they will miss something if they do notreview all available data before making a decision,”Cascio said.

Psychologist David Lewis notes in a report commis-sioned by Reuters that people are in a frenzy to acquireever-increasing amounts of information. They remainfirm in their belief that the more information you pos-

Managing information tosupport strategic decisionmaking is an essentialcomponent of addingperformance value andwealth.

REAL-TIME DECISION MAKING

Information technology and analysis can help make senseof endless data so they can be turned into useful knowl-edge to improve performance. Data need to be statisti-cally refined and presented in an easy-to-understandformat so it can help focus efforts. Refining data can ulti-mately help executives make the correct choices and act ina unified way. But to refine the data in this way requirestools that help organizations and groups keep focused ontheir mission and where they should be going.

Twentieth Century-Fox may rake in huge profitsfrom its science-fiction blockbusters, but until recentlyits box office reporting techniques were about asadvanced as the special effects in the studio’s 1958 clas-sic The Fly. To bring its data collection practices into theInternet age, Fox is constructing an intranet to track the millions of records associated with box officereceipts. The payoff is real-time feedback that lets thestudio spot regional and competitive trends and actquickly enough to exploit them: “This applicationallows us to manage our business more intelligently bygiving us actual information on what’s happening in thetheaters, whereas before, we relied on intuition and gutfeel,” said Justin Yaros, CIO and senior vice president atFox (Girishankar, 1999).

“Our executives and branch managers would call me oranother person in IT, and we had to query box-officereturns at different theaters one at a time. Now, we are ableto put the information at their fingertips so they canmanipulate it to their needs,” said Tom Roach, vice presi-dent of domestic theatrical IT at Fox (Girishankar, 1999,p. 10). Experts said the studio is one of the first to trackbox-office returns in an automated fashion. “This kind ofaggregation of internal and external information to makeexecutive decisions affecting the business is a good ideaand, if anything, it moves the movie industry out of 1900stechnology,” said analyst Joe Butt of Forrester Research.“Fox’s application sets the stage for future electronic filmdelivery systems that can match supply and demand on adaily basis” (p. 10). Instant statistical analysis could trans-late into big savings. For one thing, films could be selec-tively extended in markets or individual theaters wherethey are doing well. Or, conversely, they could be pulledfrom theaters where they are slumping to cut losses. Foxofficials also can instantly measure the impact of promo-tional dollars spent on new films and adjust their cam-paigns accordingly.

Business success is based on creating improved valueand wealth. Managing information to support strategicdecision making is an essential component of adding per-formance value and wealth.

22 www.ispi.org • DOI: 10.1002/pfi • JANUARY 2010

sess, the more powerful you become. Lewis said, “Theexact opposite is proving to be the case” (Bodil, 1997).

The Pareto principle states that roughly 80% of effectscan be explained by 20% of the causes. In practice, it isreferred to as the “vital few and the trivial many”(Sorensen, 1998). Those who suffer from informationoverload will also find that about 80% percent of the infor-mation received is the “trivial many.” Only 20% will be ofcritical importance to job, process, client, or decision-making success. The process of eliminating excessive infor-mation and instead focusing on what is critical is morethan a simple mental exercise. HPT professionals can helpin this effort by ensuring that systems are set up to identifyand track high-priority information, activities, and deci-sions that are important to strategic concerns.

An “A” list can include essential processes, products,procedures, activities, capabilities, and decisions thatneed to be made, as well as key people.

Anyone looking to improve competitiveness must first prioritize the critical decisions and then improve the decision-making process itself.

Eliminate Unnecessary StuffIt is easy to lose sight of the big picture and get distractedwith the details.

Elimination is the most powerful tool for improveddecision making. Its power rests in the fact that it is a wayto completely change how work is done. When organiza-tions eliminate layers of management, they are struc-turally changing how decisions are made. A by-product ofthis restructuring is efficiency. Mike Walsh, CEO ofUnion Pacific, provides one example of what is occurringaround the United States. When he was hired, there werenine layers of management between him and those re-sponsible for operations. He eliminated six of those layers. He also increased the spending authority of hissuperintendents up to $25,000 without approval, thuseliminating the need for approval decisions. Eliminatinglevels and approvals streamlined decision making in thiscase (King, 1993).

HPT professionals can help managers identify andeliminate wasteful and unnecessary tasks. Unnecessarywork can involve personnel procedures, rules, regulation,and even patterns of behavior. Even the most basic taskcan have inefficiencies that have become standard opera-tional procedures.

Fortune reported that Sea Land went through restruc-turing by concentrating on work elimination, not jobelimination (Main, 1988). Their aim was to get rid ofunnecessary tasks, so they looked at job descriptions. As aresult, many of those descriptions shrank from five pagesto one sheet. In another example, Pizza Hut asked

employees to assist in organizational decision making.Morale increased in its San Diego, St. Louis, and southernFlorida stores when store managers participated in help-ing to decide what paperwork the parent company couldeliminate to reduce bottlenecks, mistakes, and miscues.

If You Can’t Eliminate, Then SimplifyOf course, it is not possible to eliminate all levels of infor-mation or decision making. In lieu of elimination, UnionPacific (UP) recognized the value of simplification as atool to improve decision making with customer service.With new information technology, pertinent accountinformation automatically flashes on the service repre-sentative’s monitor. UP also simplifies decision making byusing IT to trace shipments and place orders. In UP’s case,tracking these shipments meant that nearly one-third oftheir bills could be sent electronically (King, 1993).

DuPont also provides a good example of how to sim-plify decision making. In the 1980s, DuPont wentthrough a restructuring where it was forced to do morewith less. To deal with the problem of decreasing size andincreasing demand, executives decided to assess and pri-oritize needed work. In particular, they made a concertedeffort to focus on several key changes, including eliminat-ing tasks and adding value through technology. By simpli-fying and automating key processes, they eliminatedneedless decisions. Use of IT is not the only way DuPontsimplified. It was also able to simplify or eliminate deci-sions by first prioritizing decisions. One of the key strate-gies learned from this simplification process was that thesolution to streamlining is to focus on predictable andrepetitive tasks (Main, 1988).

CombiningCombining is another way to improve decision making.For instance, combining either or both functions andknowledge can often produce better decisions. As withelimination or simplification, there are many ways to doit. Concurrent engineering is a popular combining tool bywhich a product and process are developed simultane-ously. Combining the skills and knowledge of operationalpersonnel can shift some decision-making authority frommanagement to team members. The outcome is oftenelimination of redundant activities.

Consider how Chaparral Steel used the philosophy ofcombining to improve decision-making processes.Chaparral, one of the world’s most productive steel com-panies, depends on combining the skills and knowledgeof operational personnel through a team approach.Giving teams authority to make their own decisionsreduces the need for overcontrol. Among other issues,teams at Chaparral decide when to take their own coffee

Performance Improvement • Volume 49 • Number 1 • DOI: 10.1002/pfi 23

breaks and when to leave their machines. But theirauthority to make decisions goes beyond these basicissues.

The teams are given a lot of authority and have beentrained to understand the whole process of steel making.The company operates an educational program thatteaches members not only what happens to a piece of steelas it moves through their operation but also aboutfinance, accounting, and sales. Because they are trained inthis manner, they know how their job relates to the wel-fare of the entire organization. To reinforce their system,the company makes sure that rewards are based on payfor skills rather than an automatic raise so they canencourage learning (Dumaine, 1990).

Process ManagementWhen trying to eliminate, simplify, or combine toimprove decisions, many HPT professionals use a processmanagement approach to identify and eliminate tasksthat are not deemed essential to producing quality. Oftenthe hardest part of this thought process is figuring outwhere work begins and ends. If the goal is work elimina-tion, then exploring the work flow along with each step inthe work process is critical.

Flow analysis begins by breaking down a job into itsbasic steps, examining them closely, and then eliminating,simplifying, or combining them to make the job easierand less fatiguing.

In this process, it is helpful to write a detailed descrip-tion of the decision-making process under examination.This is not hard to do because there are only five types ofdecisions:

• Work or operation decisions, which is where actualwork is being performed.

• Move or transportation decisions, in which informa-tion, people, or equipment are being moved from onepoint to another.

• Inspection decisions, which involve checking on thequality or some other variable.

• Delay or nondecisions, in which nothing is happeningbecause the job or task is not being done for some rea-son, such as when waiting for an elevator.

• Hold or storage decisions, in which something orsomeone is waiting for the next step, such as a signa-ture or an approval.

The point is not so much how each step is classified, butthat each step is classified. After classification, the goal is to find a way to eliminate, simplify, or combine the steps tostreamline jobs and eliminate inefficiencies. Think about

consolidating, adding value to a job, eliminating tasks, oreliminating work. Consider every small step involved in thejob, and challenge why it has to be done.

At a 3-day GE WorkOut program session, peoplelooked at simple and significant decisions. Participantsbroke problems into two categories: rattlers (simple prob-lems like getting approvals for needed work gloves) andpythons (those that are more complicated to unravel;Main, 1988).

The purpose of WorkOut sessions is to eliminate work.Usually group meetings of 50 or more people are analyz-ing and changing a work area decision. In one of themeetings, they decided that the head of the computer labshould be allowed to spend petty cash without a supervi-sor’s approval, thereby eliminating the need to make adecision. Removal of multiple approvals, unnecessarypaperwork, excessive reports, routines, and even rituals isthe focus of WorkOut.

Any HPT professional wanting to improve organiza-tional decision making needs to systematically eliminate,simplify, or combine. Begin with a single objective ofeliminating work including approvals, reports, andpaperwork and so forth, and see where it leads you.

USING TECHNOLOGY WISELYAlmost any job can become easier and simpler by elimi-nating, simplifying, or combining. Only after this processwill you be ready for IT tools to improve decision making.Some of these new technologies are known as executiveinformation systems (EIS). With the growth of Web-based technology and innovations in managerial meth-ods, such as balanced scorecard and activity-basedmanagement, many public and private organizations areexamining EIS solutions. Enterprise performance man-agement is another software application that pulls datafrom other applications, such as customer relationshipmanagement and ERP systems, and applies typical busi-ness analysis to existing information. These big-pictureanalytical applications are refining decision making for agrowing number of companies.

Before using this or any other information technolo-gies to eliminate, simplify, or combine decision-makingdata, consider the following nine steps:

Step 1. Reach consensus on what you want to accom-plish. Do not rely on mission statements.

Step 2. Isolate the few critical outcomes that say, “This iswhat we want to accomplish or that show this is where we want to be headed.”

Step 3. Identify what processes you think are essential toproducing those outcomes.

Step 4. Identify ways of getting feedback on each.

D. KEITH DENTON, PhD, is a professor of management at Missouri State University, Springfield,Missouri. He has had over 150 articles and 14 books published. He earned his PhD at SouthernIllinois University in 1982. He may be reached at DKDenton@missouristate.edu.

24 www.ispi.org • DOI: 10.1002/pfi • JANUARY 2010

Laabs, J. (1999). Overload. Workforce, 78(1), 30–36.

Langevoort, D.C. (1997). Organized illusions: A behavioraltheory of why corporations mislead stock market investors.University of Pennsylvania Law Review, 146, 101.

Main, J. (1988, September 26). The winning organization.Fortune, 121(18), 54.

Martin, J. (1998, August 3). Ultra-wired. Fortune, 138(3),241–244.

McCune, J.C. (1998). Data, data everywhere. ManagementReview, 87(10), 10–12.

Sorensen, S.C. (1998). A Pareto-like effect in regression. TotalQuality Management, 9(8), 681–688.

Useem, M., & Useem, J. (2005, June 27). Great escapes.Fortune, 151(13), 97–102.

Whiting, R. (2002, May 20). Extranets go the extra mile.InformationWeek, 889, 72.

Related Readings

Basile, F. (1996, March 11). Great management ideas can workfor you. Indianapolis Business Journal, 16(52), 53.

Fryxell, D.A. (1997). The 80% solution. Writer’s Digest, 77(5),57–59.

Step 5. Pick a credible person as change agent in charge.Step 6. Collect easy measures first.Step 7. Do a pilot run.Step 8. Use some software that makes the whole process

easier to manage.Step 9. Regularly review results with group, interpret,

and react.

References

Bodil, J. (1997). Dying for information. Management Review,86(7), 9–10.

Cohen, S. (1997). Intranets uncovered. Training andDevelopment, 51(2), 48–51.

Drucker, P. (1998, August 24). The next information revolu-tion. Forbes, 162(4), 46.

Dumaine, B. (1990, May 7). Who needs a boss. Fortune,121(18), 54.

Girishankar, S. (1999, August 9). Real-time data analysis is ahit at Fox. Internetweek, 776, 10.

King, J.P. (1993, August). Union Pacific gets back on track withcustomers. Training and Development, 47(8), 33.

Krill, P. (2000, January 10). Enterprise careers: Overcominginformation overload––The Web, e-mail and communicationdevices can offer a paralyzing amount of information.INFOWORLD, 22(2), 63.