2006-10-31T15:36:32ZIf you’re a basketball fan or live in the Boston area, you know that Red Auerbach died a few days ago. Among other achievements, Auerbach coached the Celtics to eight consecutive N.B.A. championships. There’s a bronze statue of him...
If you’re a basketball fan or live in the Boston area, you know that Red Auerbach died a few days ago. Among other achievements, Auerbach coached the Celtics to eight consecutive N.B.A. championships. There’s a bronze statue of him sitting on a bench in Boston’s Faneuil Hall marketplace—balding, stocky, holding his famous “victory cigar”—an ordinary-looking guy, but a basketball genius.
Part of that genius was an extraordinary ability to communicate with his players. How? Yes, he had a loud voice, he was passionate, he knew a lot about basketball. But the key to his effectiveness as a communicator was his ability to listen.
In a 2004 USA Today interview (quoted in the New York Times obituary for Auerbach), Bill Russell said, “Red had the greatest of ears. After he talked to a player four times, he knew how to communicate with him.”
In other words, communication has as much to do with listening as talking.
Auerbach himself once said, “It’s not what you say; it’s what they hear,” putting his finger on what I think is the essential truth about communication. It only works when you understand the person you’re talking with and shape your words and manner to how he hears—that is, to how he thinks; what he cares about; what he needs. And the only way to understand those things is to listen and observe.
You can’t communicate well if all you do is talk.
2006-10-19T05:22:07ZThe AMA is hosting a complimentary webcast on Tuesday, October 31, 2006: Competing On Analytics: Move Faster, Accomplish More, and Avoid Mistakes by Learning From The Best Like never before, marketers today are being held accountable for their impact on...
The AMA is hosting a complimentary webcast on Tuesday, October 31, 2006:
Like never before, marketers today are being held accountable for their impact on the corporate bottom line. Quantifiable results matter more than ever as marketing initiatives are conceived, executed, and eventually evaluated.
Professor Tom Davenport, Babson College (that would be me!)
Anna Carbonara, Moderator, American Marketing Association
Capital One, Procter & Gamble, Amazon and other leaders pioneered this data-driven approach to marketing. If your marketing organization is like most, you've already begun a similar move towards leveraging data and analytics. Like most, you're probably also facing the same challenges faced by the early adopters - finding and retaining qualified staff, aligning with shifting business priorities, and satisfying the (seemingly) endless demand for analysis, for example.
What you will learn:
- What data-driven marketing is (and isn't)
- How marketing visionaries are using analytics for competitive advantage
- What specific tactics these early adopters believe are essential to their success (and what they'd do differently next time)
- How you can personally succeed as a marketer during these tumultuous times
Who Should Attend:
- Business-to-business and business-to-consumer marketers at all levels, up to and including CMO's and Vice Presidents of Marketing
- Information technology professionals, particularly those in fields involving collaboration with marketing colleagues
As some of you may have noticed, I've been rather busy. This webcast is a good way to catch up.
I hope to see you there. Register >>
2006-10-03T20:28:02ZSome years back I wrote what I thought was a pretty good little article about the origin of a knowledge group at a well-known consulting company. It told the story of two young guys who thought it might be useful...
Some years back I wrote what I thought was a pretty good little article about the origin of a knowledge group at a well-known consulting company. It told the story of two young guys who thought it might be useful to collect proposals and reports from successful engagements and make them available for research and reuse. When their boss rejected the idea, they went ahead anyway, working on weekends, pulling a couple of discarded computers out of a storeroom, soliciting contributions from people they knew, informally spreading word about the resource they had created. A few months later, a consultant used some of the material they had gathered to win a big contract. Demand increased. The bootleg system was eventually legitimized and grew into a sizeable knowledge center.
The article was never published. The company executive whose approval I needed admitted that the article was accurate but said he didn’t want the public to get the impression that things happen in such an informal, ad hoc way at the company. Although he didn’t say so, I think he was also uncomfortable about casting disobedience in a positive light.
I think the fiction he wanted to maintain—that all decisions are carefully deliberated at the top and carried out by those below, that nothing happens by accident—is a damaging one. To the extent that leaders tend to believe it, it stops them from seeking and learning from the innovative ideas and practices that bubble up in odd corners of their organizations. To the extent that they present themselves as the sole source of company wisdom, they stifle the creativity of the people who work for them. (Why bother if leaders won’t listen and then take credit for ideas that survive in spite of their opposition?)
By way of contrast, I think of a story from the early days of Hewlett-Packard. David Packard responded to an engineer who had disregarded an order to stop working on technology that turned into a successful product by calling a meeting of engineers and presenting him with a medal for “extraordinary contempt and defiance beyond the normal call of engineering duty.”
2006-10-03T04:26:33ZI’ve recently thought about writing a book, or at least a few well placed articles, on the subject of knowledge populism, of which evidence is all around us. Like political populism, which flourished in the US mid-west at the turn...
I’ve recently thought about writing a book, or at least a few well placed articles, on the subject of knowledge populism, of which evidence is all around us.
Like political populism, which flourished in the US mid-west at the turn of the 20th century, the knowledge populism we see is surely a tricky subject-containing elements both malignant and glorious. It is a natural outgrowth of the world-wide democratization of knowledge and information that is roiling our world in so many ways.
In doing some reading for this subject for a dual talk Tom Davenport and I are doing later in the month, I found some books for you all worth commenting on.
The first is Infotopia, by Cass Sunstein who is a law school professor in Chicago, and is also what I’d call a "public intellectual" i.e. someone willing to talk on subjects outside the technical details of their field, someone actually worth listening to. This book is quite good – it’s short, interesting, and with a real knowledge perspective. Its main theme is the need for deliberation - space and time to deliberate. Sunstein is particularly interested in how many users using the web have the potential to create valuable new knowledge.
Another interesting tome, is by Yochai Benkler, yet another law school guy (this one at Yale – what’s with these guys?). This book is called The Wealth of Networks and is sub-titled How Social Production transforms markets and freedom.
I’m not at all sure about the power of his argument concerning freedom but his arguments about social production are cogent and interesting - if a bit dry and based on neo-classic economics - which is tidy but not real. The book, like Sunstein's, is well written and is also really about knowledge.
We are winning the race, fellow knowledge practitioners!
To butress this last point take a look at a World Bank report, released just a few months back called Where is the wealth of Nations? Measuring Capital for the 21st Century.
While the bank researchers still conflate knowledge with human capital, at least they now acknowledge it as a powerful source of intangible wealth.
We have come quite a ways in this regard. Take a look at any economic reckoning of wealth just a few decades ago and there was no mention of any intangibles whatsoever. Now if we can only get accountants and finance people to see the light!! They will if they have Baruch Lev as a professor but he can’t teach everybody!
2006-06-06T05:26:07ZI haven’t written a blog entry in a while, but apparently a lot of people have. I heard in a presentation today that there are (as of May 30th, 2006) 28,592,813 blogs, and 43,109 new blogs in the last 24... I haven’t written a blog entry in a while, but apparently a lot of people have. I heard in a presentation today that there are (as of May 30th, 2006) 28,592,813 blogs, and 43,109 new blogs in the last 24 hours. Hmmmm. One could argue that this is too many. As I pointed out in my first entry for the Babson Knowledge blog, the key issue is the imbalance of information in the blogosphere and the amount of human attention available to attend to it. It’s far easier to write a blog than to get anyone to read it. This imbalance leads me to believe that a couple of major changes need to take place in individual and organizational information environments. One is the automated mining of textual and unstructured information. We’re finally getting a handle on how to get value from structured information. But most organizations don’t have a clue about how to mine blogs, emails, instant messages, presentations, and so forth. We don’t have time to look at all of this stuff to see if it’s interesting and relevant to us, so we will have to have systems that find the good content and serve it up or summarize it for us. It is individuals that read and take action on unstructured information, so we need to address this issue at the individual level. Some of this mining will be automatically intuited by an intelligent system based on stuff we’ve looked at in the past, and perhaps on how we’ve rated it. But, of course, we’ve been hearing for a number of years that such “machine learning” will improve our lives. Thus far and for the foreseeable future, we’re going to have to help our computers with some personal interventions. In particular, we’re going to have to get better at specifying what information we care about. Most of us are pretty haphazard about what information we need and want to see. We click mindlessly through the blogosphere. We read whatever free magazines publishers are willing to send us. We read whatever emails appear in our inboxes or on our Blackberry screens. One prominent GE executive admitted to me—without much sheepishness—that the only articles he reads are those that other people attach to his email messages. This is not a well-designed personal information environment! Someday it will all be better. I’ll be able to say to a computer something like the following: - I like and want to read/hear/view content about the Boston Red Sox, analytical competition, attempts to improve the performance of knowledge work, case studies about knowledge management, process management initiatives that employ IT, Julie Bowen (a somewhat obscure but lovely actress) and so forth. - I don’t want to receive stuff about dining hall schedules at Babson College, regular meetings that I have never attended in the past, marketing messages from IT vendors, movies that are badly reviewed, hockey, Britney Spears, and so forth. Of course, it’s the “and so forth” that kills us. We know some things we definitely like and don’t like, but we’re always afraid that we’re missing something important, and we’re afraid to rule out sources and topics because there just might be something valuable there. I’m hoping that technology will help us out in this regard—noting that you haven’t looked at the last 42 RSS feeds from a particular blog, so maybe you should stop pretending to be interested in it—or that you seem to be clicking on a lot of sites about real estate in Palo Alto, so should I feed you more of that? Between all of us working a little harder at figuring out what we want, and a bit of help from intelligent software, we’ll eventually get to an attention-preserving environment that still keeps us well-informed. [...]
2006-05-22T17:37:09ZPretty much everyone interested in knowledge management knows that storytelling can be an effective knowledge-sharing technique, largely because it conveys context, causal relationships, and emotional content more effectively than most other modes of communication. Here’s one little story about storytelling...
Pretty much everyone interested in knowledge management knows that storytelling can be an effective knowledge-sharing technique, largely because it conveys context, causal relationships, and emotional content more effectively than most other modes of communication.
Here’s one little story about storytelling that suggests some of the benefits.
For six years, NASA Jet Propulsion Laboratory librarian Teresa Bailey has been overseeing monthly storytelling sessions at JPL’s library that often attract fifty or more listeners. Some stories have focused on fairly narrow technical or scientific issues (for instance, “Discovery of Sulfur Dioxide on Jupiter’s Satellite Io”). Other stories have dealt with particular missions (“The True Story Behind the Mars Pathfinder Success”), with more general learning from experience (“How Spacecraft Fail”), and with the organization itself (“Jet Propulsion Laboratory—The Early Years”).
What do people get from these stories? Some pick up bits of wisdom they can apply to their own work—do’s and don’t’s of planning and design, maybe a technical insight that helps solve a problem. Some are inspired by stories of success. Most gain a greater sense of connection with the organization, because they hear about what colleagues have been doing, because the stories express values and aims that tellers and listeners share, and because they are participating in a communal experience. I believe building trust and relationships is a more important effect of organizational storytelling than knowledge transfer.
Knowledge managers seldom talk about what stories do for their tellers. In fact, the benefits of telling a story can be profound. Shaping stories helps people make sense of experiences they’ve had. Telling them to a receptive audience not only provides heartening evidence that colleagues find your work interesting and valuable, it remind the tellers how much they care about what they do. Describing her scientist and engineer storytellers, Bailey says, “They don’t even know how passionate they are about their work until they start talking about it.”
The person who learns most from the story is often the one who tells it.
2006-05-20T06:00:31ZWant to find out where the weird word “pachyderm” came from? Just google the phrase “pachyderm etymology” and within a second you can learn how the English word traces its roots back to Frenchman Georges Cuvier, the father of modern...
Want to find out where the weird word “pachyderm” came from? Just google the phrase “pachyderm etymology” and within a second you can learn how the English word traces its roots back to Frenchman Georges Cuvier, the father of modern biology. In 1797 Cuvier began using the French pachyderme to describe animals like elephants and hippopotami. The French term derives from pachydermos, the Greek word for thick-skinned.
Want to find out where your company’s 2005 revenue came from? Good luck to you.
These days, employees feel increasingly confident that they can find anything, just as long as it’s external information. But if it’s right under their noses in their companies’ databases, their confidence will often be much lower. (And they will assume that it will take a lot longer to find it.) One obvious culprit is the massive quantity of internal or proprietary data that companies now stockpile—an amount that continues to grow 40-70 percent a year. As one analyst recently noted, “in the same way that consumers were set adrift in the early days of the Web, enterprises are now drowning in data sets of their own.”
Enter Google, which is now redoubling its efforts to do for internal information what it once did for the Internet. Below we offer excerpts from a few noteworthy articles that outline the company’s strategy to “go corporate”—and thus diversify away from its core search-advertising business, which currently drives 95 percent of its sales.
- In “Google shifts focus to show it means business,” Matthew Glotzbach, Google’s head of enterprise products, explains: "Companies have to deal with [internal content explosion] if they want to compete. Google wants to use its experience in web search to provide a ‘fast front door’ to that information – one that doesn’t require any special training for users."
- Quoted in another article, “Enterprise Search: A Different Animal,” Glotzback describes how Google’s search appliance allows administrators to select documents that will appear at the top of results for specific key words, not unlike the way Google.com returns a few paid listings at the top of natural search results. “It's almost like an internal ad.”
- In an interview with CIO Insight, Dave Girouard, general manager of the enterprise business, describes the fruits of his customer research: “When you put Google inside a company…There's almost a sigh of relief that now they'll be able to find their information. For us, that is always the most important thing—how well does it solve the problem for the end-user.”
- Finally, in “Google dodges knowledge management question,” you’ll see Google product marketing manager Arvind Desikan do just that. However, Desikan does mention a couple of potential case studies worth tracking, "We appear to have served the knowledge management needs of several large companies to date, including BA and Schlumberger."
2006-05-15T17:35:20ZFor all of you who, like me, like to keep Amazon in business, here are two new titles with substantial relevance for knowledge fans. Globalization and Its Enemies, by Daniel Cohen, just published by the MIT Press, is a blessedly...
For all of you who, like me, like to keep Amazon in business, here are two new titles with substantial relevance for knowledge fans.
Globalization and Its Enemies, by Daniel Cohen, just published by the MIT Press, is a blessedly short but very interesting exploration of the issues of globalization. Cohen is a prestigious public intellectual in France, with no ideological ax to grind as far as I know. His analysis is terrific; historical, sensible, and he is neither a cheer-leader nor gloom-sayer. A short and excellent introduction to the whole concept by someone who knows whereof he speaks.
A much weightier tome is The Wealth of Networks: How Social Production Transforms Markets and Freedoms, by Yochai Benkler and published this month by Yale University Press. Benkler is a law professor at Yale, and this book is a very interesting and profound analysis on how the new, social, and technological production of knowledge has legal and philosophical implications that have yet to be addressed. Benkler has some great discussions here on how wealth is being created anew, and what it means not just for the law, but for economics and business in general. The first 100 pages or so were the most interesting on the subject of knowledge and wealth creation.
I’ll let all of you catch up on your reading and not recommend any books for a month or two—unless something outstanding shows up!
2006-05-15T17:35:20ZI don’t have statistics to prove it, but anecdotal evidence suggests that people working at organizations devoted to missions other than (and arguably higher than) making money share knowledge more readily than employees at companies that emphasize the bottom line....
I don’t have statistics to prove it, but anecdotal evidence suggests that people working at organizations devoted to missions other than (and arguably higher than) making money share knowledge more readily than employees at companies that emphasize the bottom line.
My colleagues and I have looked at knowledge programs at the World Bank, NASA, the navy, and MITRE, among other entities devoted to reducing poverty, advancing science and space exploration, and contributing to national security. Although these organizations have their share of territoriality and competitiveness, their missions do seem to encourage people to share knowledge and cooperate more readily than they would without a sense of a shared worthy purpose. My conversations with experienced NASA project managers suggest that knowledge sharing happens most fully and readily when project leaders keep the value and excitement of their shared mission in view and appeal to that inspiring goal to help resolve disagreements and overcome crankiness and suspicion.
There is a lesson here for for-profit companies. Knowledge workers are unlikely to devote time and talent to knowledge management activities if the only articulated purpose for those efforts is to save money for the corporation. The CEO and CFO and major stockholders may be inspired by those dollars, but most employees aren’t. In many cases, though, profit-making companies can also legitimately invoke a higher purpose to support knowledge sharing—perhaps scientific discovery or the public benefits of their products or services or even pride in the quality of work accomplished. Pharmaceutical companies, for example, are unquestionably profit-making ventures, but most researchers are driven (and driven to seek and share knowledge) by the goal of discovering drugs that cure diseases. For them, profits are a byproduct of a scientific and humanitarian achievement.
People who are proud of their work are more likely to offer what they know to people they think of as colleagues in a shared journey toward a worthwhile goal.
2006-05-15T17:35:20ZInnovation is back in style. Many companies that had been cautious over the past several years and primarily focused on cost reductions are now turning their focus to innovation. There is ample evidence of this orientation. For example, 87% of... Innovation is back in style. Many companies that had been cautious over the past several years and primarily focused on cost reductions are now turning their focus to innovation. There is ample evidence of this orientation. For example, 87% of senior executives in a 2005 survey said that generating organic growth through innovation is necessary for success in their industries, and 74% planned to increase spending on innovation in 2005.1 Yet the mere desire for more innovation won't make it happen, and many organizations have poorly-managed approaches to innovation. In particular, they have too narrow a focus on innovation, and address only the product innovation domain. They do not manage an innovation portfolio in terms of how they source, fund, monitor, and assign responsibility for innovation. As a result, they will continue to have weak innovation results. In the 2005 study mentioned above, only 49% of the surveyed executives were satisfied with the financial returns on investments in innovation. In another 2005 analysis, there was no correlation between spending on innovation and the overall financial performance of organizations.2 In order to construct and manage an innovation portfolio, an organization must identify the types of innovation that are important to it, the key steps in the innovation process, and the primary responsibilities for managing it. Then it can begin to create a more formal approach for managing a broader, more comprehensive innovation portfolio. I'll describe each of the elements of such a portfolio. Types of Innovation What are the possible types of innovation that organizations can and should pursue? Unfortunately, most organizations focus only upon product innovation. In a 2003 study of companies' innovation sourcing strategies, two other researchers and I discovered that product innovation was far more likely to be addressed than any other type. 70% of the executives surveyed in the study said their organizations pursued product innovation, whereas the next most common responses (service and process innovation) were being pursued by only 20% of respondents. Product innovation is certainly important, and in some ways it offers the clearest economic payoff for innovation. Companies create products, take them to market, and sell them to customers. Yet there are important arguments for going beyond product innovation alone. First of all, an increasing proportion of sophisticated economies are based on services—over 70% in the United States, for example3. Secondly, even in product markets, customers often buy products not just on the basis of the product's characteristics, but on the business model and processes by which the product is sold, and the services offered after the sale. Finally, companies are much more likely to produce effective and economically valuable products and services if they have innovative and high-quality management approaches. IBM illustrates both the predominance of product innovation, and the emerging rise of other innovation domains. For several decades the company has vigorously pursued product and component research at its corporate laboratories such as Watson and Almaden. Despite the fact that half of its revenues derive from services, only in the last year has the company officially recognized services innovation as part of its innovation portfolio, creating the Services Research group at its Almaden Labs. What does service innovation mean? For companies such as IBM offering business services, it means the development and testing of new ways to deliver s[...]
2006-05-15T17:35:20ZTwo rather important and quite different books have been published this week that should be of considerable interest to anyone who cares about the task of better understanding how knowledge works in this world. The first, The New Argonauts :... Two rather important and quite different books have been published this week that should be of considerable interest to anyone who cares about the task of better understanding how knowledge works in this world. The first, The New Argonauts : Regional Advantage in a Global Economy by AnnaLee Saxenian is published by Harvard University Press. This is the first real empirical study on how knowledge-flows really work. The author has done extensive research in how the Indian, Chinese, and Israelis study and work and learn in Silicon Valley and how they bring this knowledge back to their countries where it takes root in often spectacular fashion. This migration of knowledge thru the medium of human capital is a very powerful force in the growing democratization of knowledge and is rarely analysed and documented with such power as Saxenian employs. Saxenian is an economic geographer and is Dean of the best school in the US to study information and knowledge: the University of California at Berkeley. Saxenian has done her work throroughly, both in voluminous interviews and in telling stories mixed with analysis. She conveys very, very well just how local and social knowledge is, and how it gets transferred by groups who already share trust thru shared ethnicity. Another stunning, though quite different knowledge book, is David Warsh's Knowledge and the Wealth Of Nations: A Story of Economic Discovery published by Norton. Warsh is one of the very few economic journalists in the US who knows his theory as well as how the subject is practised. This book is nothing les then an intellectual history of how the very idea of knowledge has re-entered economics (it was an important theme to Adam Smith but got lost in the later 20th century). The book ends with a great discussion on the work of Paul Romer who has done the most to put knowledge into development thinking and explain it in a way that it will eventually find it sway into Freshman textbooks (if they still read). If you are wondering why this is important to anyone besides academics or economists, its because once these ideas get established in mainstream disciplin es they gather momentum and begin to be taught in business schools. Until that happens the subject remains either a marginal activity or just one more thing consultants sell to bewildered managers. Knowledge is far too important for this fate and Warsh explains just how it has risen, fallen and is rising again to take its place as a key concept in understanding the 21st Century. [...]
2006-05-15T17:41:36ZT.J. Elliott, Chief Learning Officer of ETS, would like members of the Babson Working Knowledge community to reflect and comment on a question that he and colleagues have been exploring at ETS. They would like to know what processes or...
T.J. Elliott, Chief Learning Officer of ETS, would like members of the Babson Working Knowledge community to reflect and comment on a question that he and colleagues have been exploring at ETS. They would like to know what processes or practices organizations have devised (or stumbled on) to encourage the application of existing knowledge to new purposes.
One of the goals of knowledge management has been to support the creative re-use of knowledge. Knowledge developed in one area, the thinking goes, may be just what is needed to solve a problem in another or trigger important innovation (since most “new” ideas are really novel combinations of existing ideas).
The hope for this kind of productive matchmaking has led some companies to design cafes and lounges to encourage people to chat and possibly learn things from one another that can be used in new ways. Probably the best known case of applying knowledge developed in one part of an organization to an unanticipated opportunity somewhere else is the Post-it Note story. It was the combination of Spence Silver’s invention of an adhesive that didn’t stick strongly with Art Fry’s idea of the usefulness of notes that wouldn’t slip out of books or reports that produced the successful product. (In this case, 3M’s practice of encouraging internal seminars on new ideas and inventions helped bring the two concepts together.)
Let us know what practices you use or have heard about and what your experience has been in this important area. If you have spaces designed to encourage unplanned meetings, do you find that they actually work to get knowledge to where it can be used in new ways? Are there organizational practices or values that encourage this kind of knowledge re-use? Are there formal processes that work? Are there ways that electronic repositories can be designed to encourage new applications of existing knowledge? Is this a subject that people in your organization are thinking about and working on?
2006-05-15T17:35:20ZI was talking the other day to a member of a project team of about a hundred people from several organizations located at more than half a dozen sites. High levels of trust and cooperation contributed to the quality and...
I was talking the other day to a member of a project team of about a hundred people from several organizations located at more than half a dozen sites. High levels of trust and cooperation contributed to the quality and speed of the work they did, he said.
One source of that collaborative spirit won’t surprise you. The project leader made a point of bringing many team members together for frequent meetings (rotating them among the “home” sites of participants). After the meetings, they had dinner together; once, they spent some hours on a farm that belonged to a friend of the leader. That helped them get to know and trust each other.
Another contributing factor is less obvious. The project leader, he said, created a clear sense of tasks and boundaries. People knew precisely what elements of the project they were responsible for. As a result, they did not worry that other team members would encroach on their territory. That sense of security made them more willing to talk about their work to others and to offer and ask for help. Clarity and openness about people’s work also helped members understand what others on the team were doing and, therefore, where it made sense to look for and share needed expertise.
So establishing appropriate clear roles, tasks, and boundaries may be one way to encourage collaboration.
A familiar example that suggests the same point is the movie industry. Commentators have pointed to the fact that independent contractors come together to make films as proof that virtual (or maybe temporary) organizations can be successfully formed to carry out particular projects. But there are two special features of these movie-making groups. One is that they are drawn from networks of people who already know each other and each other’s work well. The other (relevant to my point here) is that roles, responsibilities, and boundaries are precisely defined in the movie industry. Directors direct, actors act, gaffers do lighting, the best boy helps the gaffer, and foley artists do sound. When they gather to do a movie, they know what their jobs are and how they can help each other.
2006-05-15T17:35:20Z1. You apply sophisticated information systems and rigorous analysis not only to your core capability but also to a range of functions as varied as marketing and human resources. 2. Your senior executive team not only recognizes the importance of...
1. You apply sophisticated information systems and rigorous analysis not only to your core capability but also to a range of functions as varied as marketing and human resources.
2. Your senior executive team not only recognizes the importance of analytics capabilities but also makes their development and maintenance a primary focus.
3. You treat fact-based decision making not only as a best practice but also as a part of the culture that’s constantly emphasized and communicated by senior executives.
4. You hire not only people with analytical skills but a lot of people with the very best analytical skills—and consider them a key to your success.
5. You not only employ analytics in almost every function and department but also consider it so strategically important that you manage it at the enterprise level.
6. You not only are expert at number crunching but also invent proprietary metrics for use in key business processes.
7. You not only use copious data and in-house analysis but also share them with customers and suppliers.
8. You not only avidly consume data but also seize every opportunity to generate information, creating a “test and learn” culture based on numerous small experiments.
9. You not only have committed to competing on analytics but also have been building your capabilities for several years.
10. You not only emphasize the importance of analytics internally but also make quantitative capabilities part of your company’s story, to be shared in the annual report and in discussions with financial analysts.
These points are from my January 2006 HBR article- "Competing on Analytics."
2006-05-15T17:35:20ZI recently had a conversation with Bob Sutton of Stanford about Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management, the new book he and Jeffrey Pfeffer have written. Among the reasons Bob gave for why leaders and...
I recently had a conversation with Bob Sutton of Stanford about Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management(image) , the new book he and Jeffrey Pfeffer have written. Among the reasons Bob gave for why leaders and managers make decisions contrary to available evidence is what he calls “confirmation bias.” That’s the tendency to notice and believe information that supports your existing beliefs and ignore or discredit information that contradicts them. James March makes a similar point when he notes how frequently managers make decisions first and ask questions later, doing analysis to “prove” that the decision makes sense.
It’s a common, powerful human behavior: most of us pay more attention to news, events, and opinions that seem to confirm our ideas than to evidence that those ideas may be wrong; most of us look for reasons to justify what we’ve already decided we want to do. And we live in a culture that values certainty more than doubt, especially in our leaders.
But the dangers are obvious. We all knows stories of leaders who confidently drive their organizations over a cliff, ignoring warnings and evidence of the dangers ahead. “SSW”—Swift, Sure, and Wrong—is an acronym used in some medical schools to describe confident, disastrous decisions in medicine. Less dramatically, organizations miss opportunities and are surprised by challenges because confirmation bias keep them from seeing important information. In a knowledge economy, being blind to essential knowledge is clearly a problem.
It is difficult but possible to do something about it. Bob Sutton cites IDEO, an industrial design firm that, he says, acts with knowledge while doubting what they know. I’m aware of one CEO who asked a knowledgeable outsider to send him an email whenever he saw him doing something stupid. We can make conscious efforts to be skeptical about confirming evidence and open to evidence that tells us we may be wrong. We can listen to the people on the fringes of our groups and organizations, rather than dismiss them because they are “different.” We can try to have a bit of what the early 20th century writer Edmund Gosse calls “higher modesty”—the willingness to question one’s own deepest beliefs that Gosse considers an essential characteristic of great scientists.