McKinsey on how companies spend money

From “How Companies Spend Their Money” [PDF] (McKinsey Global Survey)

A survey of executives from around the world highlights how frequently — and why — a company’s resource allocation decisions go wrong.

Companies start off well, respondents say: senior executives are heavily involved in these decisions and routinely assess the prior performance of business units and the value creation protential of proposed projects, among other critera.

However, respondents also describe a climate in which optimistic forecasts are coupled with risk aversion. Companies can also be deliberately led astray: more than a third say that executives hide, restrict, or misrepresent information when requesting funds.

I found this interesting enough to link to it but I don’t have time to comment. Perhaps someone else can explain why how we have come to expect and embrace unethical behaviour from executives (e.g., “misrepresent information”). I’m betting that Michelle Carter has a insightful answer about being non-requisite and these shenanigans.

Image Credit: Presidential $1 coin program. (c) 2007 Bill Koslosky, MD (CC BY 2.5)

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Forrest Christian

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E. Forrest Christian is a consultant, coach, author, trainer and speaker at The Manasclerk Company who helps individuals and companies find insight and solutions to what seem like insolvable problems. Cited for his "unique ability and insight" by his clients, Forrest has worked with people from almost every background, from artists to programmers to executives to global consultants, both as individuals and as leaders of organizations at least as diverse. [contact]