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How CEOs Stay in the Know

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CEOs nearly all develop a “personal knowledge infrastructure” to stay informed about what’s going on in their businesses. However, they rarely consider its effectiveness or fit, a new study from researchers at Warwick Business School and Saïd Business School, University of Oxford has revealed.

Consequently, executives only discover the inadequacies of their information infrastructure after it fails or breaks down.

The paper, published in the MIT Sloan Management Review, emerged from a two-year study of the day-to-day work of seven CEOs of hospital- and mental-health-based organisations in England.

“Staying in the Know” describes how CEOs construct a “personal knowledge infrastructure” to stay on top of developments in their organisations. These infrastructures include simple acts like checking the morning news, running review meetings, dropping by offices to ask questions, walking around and visiting the cafeteria but also electronic reporting systems and audit-based dashboards.

Dr Keith Ruddle, Associate Fellow at Saïd Business School and one of the study’s authors, said: “We found that the weight that individual CEOs gave to each of these types of activity depended on factors such as their own experience, the executive team and board, the external environment, and the kind of manager the Chief Executive wants to be.

“If they don’t get the balance right, though, they can end up inside an “information bubble” and create information biases and blind spots.”

The study identifies four traps that can reduce the effectiveness of the CEOs’ personal information infrastructures:

1. Not obtaining the information they need

Many CEOs aren’t receiving enough relevant information, due to insufficient monitoring, an inappropriate mix of monitoring practice, inadequate personal relationships and information overload.

 2. Developing a knowledge infrastructure that points you in the wrong direction

Personal knowledge infrastructures can be poorly aligned to the demands of the chief executive’s job. For instance, a CEO who wants to promote innovation will be badly served by an infrastructure that informs him or her only about operational issues.

3. Developing a knowledge infrastructure that isn’t tailored to the individual

CEOs will struggle if their personal knowledge infrastructure clashes with their management style. For instance, if they want to be a manager who delegates, they’ll be badly served by a personal knowledge infrastructure which drives them to focus on details.

4. Starting with technology rather than personal need

Personal knowledge infrastructures need to be geared toward the individual and not developed to match new technologies. CEOs shouldn’t ask “Is this technology good” but rather, “Will it help me?”

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