When information becomes readily available to anyone interested and willing to study the details, the ‘professional – citizen’ relationship changes
Big data continues to be a hot topic and we are increasingly seeing data-driven decisions and processes replace expert opinions in everyday activities. Indeed, one designer quit Google with the following comment:
I had a recent debate over whether a border should be 3, 4 or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that.
Trouble is, Google was able to prove that using data over instinct when deciding between 41 shades of blue for text-based links led to an annual increase of $200 million in advertising revenue. But whilst some decisions may be purely data-driven, most remain dependent on how the data is interpreted. And interpretation can be heavily influenced or manipulated by the environment, politics and language used.
A recent psychological research study showed that playing a game with a different avatar influenced behaviour afterwards. Those who played with the Superman avatar (context: hero saving the day) were kinder in later decisions than those who played with the Voldermort avatar (context: evil world destroyer).
In 2004, an experiment conducted at Stanford University (recently reported in The Atlantic) showed the influence of language on game play. Using the classic Prisoner’s Dilemma, one group were told they were playing ‘The Community Game’ and one group were told they were playing ‘The Wall Street Game’. Two-thirds of those playing ‘The Community Game’ chose to co-operate and share the rewards. Two-thirds of those playing ‘The Wall Street Game’ chose not to and focused on personal gain.
A simple shift in language can influence decisions and behaviour. Often with participants even realising. The subject of behavioural economics is not new. But combined with big data, its role in deliberately influencing decisions will continue to advance.
- Why Google has 200 million reasons to put engineers over designers – The Guardian, February 2014
- It matters which avatar you choose when gaming – Harvard Business Review, February 2014
- These two words will make you more selfish – The Atlantic, October 2013
- The Behavioural Insights Team – UK Cabinet Office web site
Flickr image: Optical illusion kindly shared by The Lex Talionis. It’s impossible to see both states of an optical illusion simultaneously. You have to make a choice about how you interpret what you think you see…
To be effective and productive in the modern world, organisations should not rely solely on hierarchical organisation charts to explain how work gets done. Networks help highlight individual contributions
The image above is a classic traditional organisational hierarchy. A manager responsible for making the decisions, supported by supervisors, each leading a team of people tasked with carrying out the decisions.
One of the biggest flaws within hierarchies is the tendency to treat all individuals at the each level as identical. In the example above, we have a decision maker, a group of supervisors: the blue dots A, B and C), and a group of do-ers: the red dots 1 to 9. (Yes I’m back with the pictures of dots again – goes with the name…) There are all sorts of challenges to the effectiveness of this system, not least trying to operate in an environment that doesn’t observe the rules of hierarchies and let’s everyone make decisions. But that’s for another post… This one is exploring how a network makes it easier to identify individual contributions and raise productivity.
Let’s rearrange our dots as the actual network that functions within this organisation:
The numbers and letters represent the order in which each individual was hired. The organisation chart does not tell us anything is different between the first person hired or the last. But the social network does.
Teams A and B are highly inter-connected. Team C is not. Supervisor C has barely any connections out of his/her reporting line and team. And we could guess that hires 7 ad 8 were made by C. All have come from outside the organisation and have yet to build up their network. The most useful member of Team C is no.9 because they have direct connections into both other teams and can more easily tap into their knowledge and expertise. But most interestingly, they have a connection with their manager’s manager. I’d guess No. 9 is heir-apparent to C’s job. C should be planning their next career move.
No. 1 is the longest-serving hire and well connected but not as well-connected as newer employees. Looking at the connections, the manager (purple dot) must be a more recent hire than no.1 because they have made connections with No. 4 and No.6 so they are not averse to communicating direct with team members yet do not interact with no.1. No. 1 is on the way out. Their career at this organisation has peaked.
No. 6’s career is on the up. Connected with people in all three teams, connected to all three supervisors and connected to the manager. Even if No. 6 knows nothing, they have access to everyone who knows something. The alternative scenario is that they are the person who knows everything, and everyone seeks them out when they need help. Either way, 6 is highly valuable to this organisation. Yet the organisation chart would suggest they are just a junior role.
Organisation charts make it far too easy to lump everybody into a single group – the level they are currently placed at within a hierarchy. And if you are near the bottom, you are expendable because the larger number of people at your level, the bigger the assumption that you are easy to replace. Imagine the company needs to reduce headcount due to financial difficulties? The common method in large organisations is to simply require all teams to reduce their headcount by the same amount. So teams A, B and C each lose a person, facing demoralising uncertainty and disruption in the process. The more productive approach would be to eliminate Team C, but keep no.9 and move them into one of the other teams. You’ve reduced the headcount by the same number, saved a bit more money because Supervisor C would likely have been on a higher salary and not impacted the two higher-performing teams in the process.
The image above visualises both approaches. On the left, the lowest performer from each team is removed. Look how sparse the connections now appear between the three teams. On the right, the lowest performing team is removed but the highest performer from within it is retained, and that isn’t the supervisor. The connections between the remaining individuals is much tighter, across the two teams. How much likelier is it that they will be able to support one another? None of this would have been evident by just studying an org chart that treats everyone at each level equally.
Of course this is a vast simplification of just one of the differences between networks and hierarchies. Hierarchies do have their benefits. They help us organise large volumes of information in ways that are simple to understand, making sense out of what would otherwise seem chaotic. But they do tend to create inequalities – it’s easier to reward the few at the top than acknowledge the many below – and their weakness is in failing to appreciate the messy realities about what is really going on. We are beginning to develop the tools to better understand and work within networks, enabling us to make sense out of the chaos without having to create a hierarchy in the process. Organisation’s that tap into this new found capability will out perform those that don’t.
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I went into the boardroom. The chairman was sitting on one side of the table and in front of him was a great platter of sushi which is my favourite food. On my side of the table was a tuna sandwich. That was to tell me that, because I had pushed and insisted upon this meeting, I [the president of the company] was the tuna sandwich in the food chain.
A great 30-minute podcast recently hosted by Evan Davis for BBC Radio 4 looked at examples of managing in a crisis. Each case was completely different but all shared a common theme – the role of emotion (and cultural norms) in decisions, actions and consequences.
The first example was a story recounted by Michael Woodford, former president of Olympus. Mr Woodford had worked for Olympus for 30 years and risen through the ranks to become president of the corporation. His mentor Tsuyoshi Kikukawa – ‘who was like my favourite uncle’ – was the chairman.
Not long after becoming president, Mr Woodford became aware of allegations that Olympus had bought three companies with almost no turnover for over $1 billion. A close business friend translated articles that substantiated the allegations and made them irrefutable. When Mr Woodford spoke to a colleague, he discovered that the chairman was aware of the allegations and had told the entire executive floor to not discuss the article with the president.
The next day, he asked for a meeting with the chairman and it was set for lunchtime, the only available slot. And so he was faced with the tuna sandwich:
And it was a manky tuna sandwich at that, there was no lettuce or crisps around it. A British Rail buffet carriage in the 1980s would not have been proud of this sandwich.
After the meeting, he proceeded with investigating the matter with the accountants. Six letters were written going through the formal process:
It culminated in letter number six when I asked for the resignation of the chairman and the vice president. I knew if they were going to go quietly, which would have been in their interests and for the benefit of the company, that I would have been called to a small meeting. Instead, an extraordinary board meeting was scheduled and I knew there and then I was going to be fired.
The culture of the organisation was to protect the most senior members of the ‘club’. No matter who or what was right or wrong. Within a month, Olympus shares had fallen in value by $7billion wiping 8o% off the value of the company.
Looking back on the experience, Mr Woodford commented:
Organisations have this instinct to protect themselves. Which can be the worst thing. A bad situation can be made ten times worse because of what the organisation chooses to do. …The day I was fired, people ran with the pack, the new order. That still haunts me today… To become a persona non gratis is very hard to describe. It’s a horrible thing to go through.
Given recent news headlines involving various governments around the world, that is a very astute observation.
The second example offers a fascinating insight into a brand that decided to make a stand in a crisis that risked its reputation in every possible way.
In the late 1980s, the UK was embroiled in the BSE crisis – ‘mad cow disease’. Questions were being asked about whether or not there was a link between BSE in cattle and CJD in humans and whether or not it was safe to consume beef. The scientific facts were inconclusive and scientists were at odds with one another. There was a lot of emotional reporting in the media about the risks, creating growing concerns amongst consumers, particularly families.
At the time, over 80% of the menu in McDonalds restaurants comprised of beef-based products.
With no clear guidance coming from within the food industry, McDonald’s held a scenario planning day to consider how bad the situation was. What was the very worst case scenario and what would be the consequences for the company? It was not a pretty picture. McDonald’s decided there and then that they would stop selling British beef. All stock would be moved out of all of the stores and somehow they would replace it with alternative supplies. It took 48 hours and was one of the biggest logistical exercises the company had ever undertaken.
For two days, there was little produce left in the stores. And sales barely dropped. People still came into the stores and bought chicken or extra fries instead. McDonald’s felt that it was testament to the power of the brand that people still trusted them and bought whatever food was available. However, it was also made clear that the rest of the industry and the UK government were not best pleased with the decision. A lot of bridge-building was required in the aftermath.
Looking back when asked if McDonald’s had panicked in the crisis, the comment was made:
Crisis management is about being able to make good decisions and being seen to be implementing them. It was the right decision at the right time.
And closing out the interviews, the following observation was given:
You don’t want to manage a successful business as though it is a burning platform. It’s great to be able to respond to a crisis properly but it is better to manage a business in a thoughtful way rather than always be in a fire-fighting situation.
Nokia came to mind with that quote… An excellent podcast (it’s a rather good series in general) and well worth listening to if you can access the recording.
- The Bottom Line: Managing in a crisis – BBC Radio 4 (may not be available to download outside of the UK)
- Ex-Olympus chairman gets suspended sentence for fraud – Bloomberg, July 2013
Flickr image: 吞拿魚(金槍魚)壽司 – Tuna sushi kindly shared by Thomas Lok
Utterly unrelated side note: The only dose of food poisoning I have experienced to date was from a dodgy tuna sandwich…