How CEOs Stay in the Loop

Four traps that CEOs can fall in when trying to stay on top of what's happening in their organizations.
Almost all CEOs have developed “personal knowledge infrastructures” to help them stay on top of what’s hap­pening in their organizations—but they rarely consider how effective these in­frastructures are until the systems break down. Those are the conclusions of “Staying in the Know,” a paper by Davide Nicolini and Maja Korica of Warwick Business School and Keith Ruddle of the Saïd Business School at the University of Oxford, all in the U.K.

The researchers spent two years studying the day-to-day work of seven CEOs of hospitals and mental health organizations in England. They determined that CEOs discover what they need to know by checking the morning news, running review meet­ings, dropping by offices to ask quick questions, and strolling through the halls and cafeterias to observe what’s going on. In addition, the CEOs stay informed by cultivating strategic relations inside and outside the orga­nization and by relying on electronic reporting systems to track critical performance indicators.

Even so, researchers say, CEOs are likely to fall into one of four traps that make their personal information infra­structures less effective:

They don’t obtain enough relevant information. They use the wrong mix of monitoring activities, they develop insufficient social networks, or they fall prey to information overload.

Their personal knowledge infrastructures point them in the wrong direction. For example, if CEOs want to foster innovation, but their infrastructures focus only on operational issues, they won’t get the information they need.

Their infrastructures clash with their personal management styles. For example, the researchers observed a CEO who wanted to be a delegator, but his infrastructure systematically drove him to focus on details, which led him to take a hands-on approach.

They buy new technology without assessing how it fits their needs. The researchers say that rather than asking, “Is this technology good?” they should ask, “Will it do any good for me?”

Says Nicolini, “Becoming and re­maining practically knowledgeable is a critical task. It becomes increasingly im­portant as the manager moves through his or her career and up the corporate ladder, when the risk of information overload significantly increases.”

“Staying in the Know” was published in the Summer 2015 issue of MIT Sloan Management Review.