| Press release

First UK Business Decisiveness Report shows one in four decisions made by top-flight executives is wrong at an average annual cost of over £800,000

The first ever Business Decisiveness Report released today by Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, reveals the average UK senior executive makes twenty business critical decisions each year valued at £160,267 each with a self-reported decision ‘failure rate’ of 24%.

The findings, based on a survey of 270 top level executives within Britain’s largest organisations (1), suggest the annual cost of ‘wrong’ decisions runs at over £800,000 per head (2).

The financial services sector reports the highest ‘failure rate’ of nearly one in three decisions being wrong (29%). With an average of 19 business critical decisions taken each year, this equates to a wrong decision every eight weeks.

By contrast, senior executives in local and central government report one in four decisions as wrong, or one every 10 weeks. The manufacturing and retail sector fares best, with a failure rate of 20%, or one in five, a wrong decision every 12 weeks.

The pressure on Britain’s top business decision makers has never been greater. The Business Decisiveness Report (BDR) suggests ninety percent of senior executives are making more or the same number of business critical decisions compared to a year ago, four in ten are making decisions faster and a third with greater autonomy.

Across all sectors, eight out of ten senior executives cite organisational decisiveness as a key factor in the agility of their business, confirming that the ability to move fast and react to changing environments remains critical to business success.

The average business critical decision takes between two to four weeks, however a third of decisions are made on longer timescales of five weeks or more.

Typically, internal consultation with between one and five additional people is rated as the most significant factor in efficient and effective business decision making.

External advice is highlighted as a factor in more than 50% of critical decisions made across all sectors.

Opinions on the most effective individual decision making styles reveal a strong preference for characteristics that support a collaborative decision making approach. The ability to ‘make a call’ quickly and stick by a decision, determination to seek out the best possible solution and willingness to take risks are the least popular characteristics. Objectivity, setting clear criteria or standards and sticking to them and willingness to listen, and take on board the opinions of others are the top rated decision making qualities.

Bill Cook, Head of Consulting Services, Capgemini UK and Ireland commented, “The ability to make decisions quickly, efficiently and effectively has always been at the heart of good business. Today we’re all faced with greater choice, more competition and less time to consider our options or seek out the right advice. We hear so much about the negative consequences of ‘choice anxiety’ in our personal lives that it’s little surprise we find parallels in the corporate world.

“The Business Decisiveness Report contains some fascinating insights into the complex pressures and factors that affect corporate decision making ability and the individual decision making styles favoured by today’s most successful organisations. At the very least we should lay to rest the spectre of inefficient decision-making by committee. At the highest levels of British Blue Chip businesses, efficient and effective collaboration is clearly at the very heart of business success.”

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(1) Organisations reporting an annual revenue of more than £200,000,000
(2) Average annual cost of ‘wrong decisions’ per respondent = £814,466

About Capgemini
Capgemini, one of the world’s foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, which it calls the Collaborative Business Experience. Through commitment to mutual success and the achievement of tangible value, the company helps businesses implement growth strategies, leverage technology, and thrive through the power of collaboration. Capgemini employs approximately 55,000 people (as of January 1, 2004) and reported 2003 global revenues of 5.754 billion euros.
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