Why the boss might not always be the best person to make the call.

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As the world changes fundamentally daily, there’s a growing point of view in management studies that bosses need to be careful about making decisions that lie outside their personal experience or skill base.

The problem is what’s called “HIPPO”. Highest Paid Person’s Opinion.

The fear is that it can often overwhelm better advice, or more data-led decision making, through fear of the HIPPO, or undue respect being paid to them.

And yes, it’s a brave ad agency (or staff member) who argues that the boss’s point of view might not be valid, or should be discounted.

But that’s not really what’s being suggested.

The fear that’s abroad is that the big boss might be in their position because of his/her experience, their legal nous, their managerial skills, or maybe the fact that they own the company … but when even “experts” are struggling to keep up with the onrush of “big data” and what it might mean for businesses, for example, then the chance of a CEO or other HIPPO being able to discern right from wrong becomes increasingly problematical. If we blindly trust the boss’s “feel” rather than whatever facts can be discerned, we might be making mistakes. Maybe expensive ones.

For this reason, smart bosses surround themselves with people whose advice they trust implicitly to tell them what they need to know – in summary form – and to advise them of any potential pitfalls, so they can make a judgement.

But the deeper problem is simply that Big Data is still in its infancy. Essentially, it means gathering together information from all over the place, squashing it all together, and then spitting out insights that guide decision making – on advertising and marketing as much as on anything else.

With the industry still finding its way, though, from giant multi-national corporations to the group of geeks huddled over laptops in a garret, judging what is a great piece of software or service from a dud will be the key. And that might be hard, especially with limited numbers of real-world case histories. It will be some time before the obvious leaders are clear.

But big data is only one area needing some hard thinking.

The longer a person has been in a business – or in a senior position anywhere – the more their experience becomes self-reinforcing. We all understand “confirmation bias”: we tend to like or approve ideas or solutions that mesh with what we know – it’s comforting.

But when the decision has to be taken in an area where we are not personally experienced, we might be the worst people to make a call. After all, we’re all guilty of acting on confirmation bias from time to time. In a research situation, for example, both advertisers and their agencies are sometimes very prescriptive in how to frame a research project, right down to drafting the questions to be asked. As a researcher said to us once: “If he’d just get out of my way, I could find out interesting stuff he really needs to know. At this rate, I will simply find out what he knows already.”

But it’s hard for a boss to genuinely devolve decision making. After all, making decisions is what being the boss is all about, right? And as Winston Churchill once remarked, “the art of being a decision maker is making a decision based on inadequate information. Because there never can be adequate information.”

Guess that’s why bosses get paid the big bucks.

MOP logoBut help is available.

Magnum Opus Partners utilise a series of formal decision-making disciplines to help our clients make good decisions, and not just on what ads to run.

These disciplines can often usefully be interpolated into a strategic decision-making process without causing undue delay, and with the benefit that they are administered by a fresh pair of eyes.

If that sounds like a good way to get the HIPPO and everyone else on the same page, just give us a call.

#management #managementsmarts

Author: Stephen Yolland

Director of Creative Strategy and Partner @ Magnum Opus Partners.

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