Modeling Innovation With Business Intelligence

In today’s global, digital economy, companies that excel at innovation and speed to market unquestionably have competitive edges. Small companies have an inherent advantage. The challenge is for larger companies, especially those that have been around for a while. Think Google or Apple vs. IBM or HP. It’s not that IBM and HP aren’t innovative at times, but Google and Apple are known for their innovation. So what makes them different?

For companies to be innovative, they must be highly adaptable. This may sound simple, but several characteristics of an adaptable company can be modeled. One characteristic is a well designed enterprise business intelligence solution.data_mining

I really like the model put forth by Jim Davis, Gloria Miller, and Allan Russell in Information Revolution: Using the Information Revolution Model to Grow Your Business. In this book, they propose four dimensions to consider when evaluating your organization’s ability to leverage information:

  1. Infrastructure. This dimension addresses all the software, hardware, and networking tools and technologies that support every phase of the information process. The assessment, purchase, implementation, and use of these components must be part of the overall business intelligence strategy. This requires an effective communications process to ensure that everyone’s needs are considered, and that all decisions are optimized at the organizational level.
  2. Knowledge process. This focuses on the strategic as well as specific uses of the information infrastructure. This includes the policies, best-practices, standards, and governance of all aspects of the information cycle, as well as the performance metrics, reward systems, and commitment to strategic use of information at the highest levels of the organization. For this dimension to operate smoothly, a cohesive, collaborative leadership team is essential.
  3. Human capital. This focuses on the importance of assessing and developing all team members to their highest potential. An inherent organizational wisdom is unveiled and leveraged for maximum innovation and adaptability through the skill development and nurturing of employees.
  4. Culture. This focuses on how your organization positions information as a long-term strategic asset. Specifically, it addresses the interaction between organizational and human influences as it relates to information flow. This includes the moral, social, and behavioral norms of corporate culture as evidenced by the attitudes, belief, and priorities of its members. This requires effective communication skills and an ethos of trust.

Evaluating an organization on these four dimensions highlights a shift in our view of business intelligence. Until very recently, organizations thought of BI strictly as a technology issue. This is the underlying reason for most BI failures. The power of the model proposed by Davis, Miller, and Russell is its holistic focus on the impact and relevance of these important dimensions on all aspects of an organization.

Come back for more business intelligence and change management focused blogs by The OLIVIAGroup! Feel free to comment with questions, insights, or additions to this post. To receive alerts when the next blog is published, click on the RSS feed at the right of the page to subscribe.

Discovering New Businesses Opportunities

Several years ago, Lester Thurow made this observation and posed several timely questions: “The old foundations of success are gone. For all of human history the source of success has been controlling natural resources — land, gold, oil. Suddenly the answer is “knowledge.” The king of the knowledge economy, Bill Gates owns no land, no gold or oil, no industrial process. How does one use knowledge to build wealth? How do societies have to be reorganized to generate a wealth-enhancing knowledge environment? How do they incubate the entrepreneurs necessary to bring about change and create wealth? What skills are needed? The knowledge-based economy is asking new questions, giving new answers, and developing new rules for success.”[i]business_opportunities

This statement highlights several important characteristics of the information economy. The assets themselves are often intangible. This inherent instability makes the market even more volatile. Early movers such as America Online were able to gain a strong foothold by giving away their software and charging a monthly fee for their service. But within a few years, market pressures forced them to change their model. Luckily, they have been able to adapt and maintain their value. Other companies, such as Bloomberg, Dow-Jones, Reuters, and Quote.com, provide real-time, aggregated data for the financial services industry. News is delivered from every major news source through the Internet. And blogs have becomes sources of news as well as forums for questioning the veracity of information.

Many back-office and outsourcing businesses have grown out of virtual connectivity. Services such as bookkeeping and answering the phone that were historically performed within the same building are now done in other cities or continents. Today, some are surprised to learn that most taxes are prepared and X rays are read in India.

Given this relentless pressure to adapt our business models, companies are embracing innovative technologies and developing new strategies for capturing value.

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Visit www.OLIVIAGroup.com to learn more about Business Intelligence and hiring Olivia Parr Rud for your next conference!

 


[i]             Lester Thurow, Building Wealth, http://www.theatlantic.com/issues/99jun/9906thurow.htm.

Where Business Intelligence Fits Into the Information Evolution Model

In Information Revolution: Using the Information Revolution Model to Grow Your Business, authors Jim Davis, Gloria Miller, and Allan Russell introduce the idea of the Information Evolution Model. As I discussed in my last blog, Modeling Innovation With BI, they propose four dimensions — infrastructure, process, people, and culture — as guides for evaluating your organization’s ability to leverage information in an effort to achieve your business goals. Here, I’ll take a deeper look at these four dimensions, framing them in context of the five-level Information Evolution Model.

The model’s five levels — operational, consolidation, integration, optimization, and innovation — are hierarchical and reflect aspects of maturity across the four dimensions. Generally, companies fluctuate within different levels across the four dimensions during this evolution.

Level 1: The operational enterprise

The most common type of organization at this level is the startup. However, many small businesses and large siloed businesses operate at this level as well. The following describes key Level 1 characteristics:

  • Level 1 knowledge process focuses on day-to-day tactics. This results in high variability in the access, analysis, and use of information.
  • Level 1 people tend to thrive in unstructured environments. The information technicians are often self-motivated and risk-takers. They tend to strive for differentiation and recognition, which might serve a company still operating at an entrepreneurial level. However, they resist change and loss of control, which may inhibit maturing to the next level.
  • Level 1 culture is well-suited for charismatic leaders and self-starters. Information management positions are structured to compete, allowing for the emergence of “information mavericks.” Job security is gained through individual control.

The manner in which Level 1 organizations share and use information is highly inconsistent. With the right talent, a business can thrive at this level up to a certain point or in a limited market. As it tries to grow, the individual focus can lead to inefficiencies, redundancies, and errors. Since little intention gets paid to coordinate silos, alignment does not play an important role. Skills in social interaction and teamwork are of little value.

Level 2: The consolidated enterprise

Organizations at this level have integrated information management within a silo or department. Typically, they’ve optimized knowledge processes to support operations within the functional areas.

  • Level 2 infrastructure features all data management hardware and software designed to optimize information and decision processes at a departmental level. Departmental discrepancies and duplication of effort are common pitfalls.
  • Level 2 knowledge process supports decision-making at the department level. This may result in inconsistencies and suboptimal results on an enterprise level.
  • Level 2 human capital and culture dimensions aren’t managed with an intention toward integration. Teamwork may be encouraged in small, homogenous areas, but strategic and interdepartmental collaborative efforts are challenged by the organization’s competitive structure. Communication also may be challenging without the benefit of a shared vision or enterprise-level goals.

Level 3: The integrated enterprise

An enterprise-wide approach to data management and decision-making characterizes organizations at this level. Integrated knowledge systems generate value by standardizing processes that promote coordinated marketing efforts. Resources are mobilized around market and customer relationships that optimize long-term value.

  • Level 3 infrastructure features a seamless, enterprisewide system of hardware, software, and networking that supports data reporting, analysis, and auditing while delivering a single version of the truth.
  • Level 3 knowledge process enables the company to optimize reporting and analysis to meet enterprise-wide goals and objectives. The focus shifts from a product to a customer or market focus with emphasis on relationships and long-term value. All information access and quality is aligned and standardized. Performance management is automated. This level of interdepartmental cooperation requires highly developed communication and collaboration skills.
  • Level 3 people balance departmental goals with those of the enterprise. Their holistic view and emotional intelligence allows them to contribute to and champion enterprise efforts.
  • Level 3 culture views business intelligence as a corporate asset and essential strategy. Training and organizational development focus on the importance of enterprise-wide access and intelligent use of information.

As the organization realizes gains of rapid decision-making, enhanced customer relationships, and shorter time-to-market, alignment becomes crucial for departments striving to coordinate actions and achieve enterprise goals. As the enterprise promotes cross-functional collaboration, competencies in the areas of communication and collaboration are increasingly important.

Level 4: The optimized enterprise

Adaptability is the distinguishing competency of organizations at this level. The ability for constant realignment with changing markets allows Level 4 organizations to maintain a competitive edge.

  • Level 4 infrastructure enhances Level 3 by linking internal business systems across the supply chain, from back-office functions through customer touch points. This enhances communications, data exchange, and connection to partners and customers across functional areas.
  • Level 4 knowledge process focuses on bringing the information systems to a higher level of quality, access, and relevance. All workflow patterns are modeled across the entire information value chain to optimize continuous measurement, decision-making, and real-time analytics leading to consistent and immediate customer response. Closed-loop feedback processes ensure continuous evaluation and improvement.
  • Level 4 people have many similarities to those in Level 1. They are independent, adaptable, innovative, and driven, and take calculated risks. However, their approach to the organization is more holistic. They, along with their peers, are focused on enterprise-level goals. So along with being innovative and adaptable, they must be highly skilled in the areas of communication and collaboration.
  • Level 4 culture empowers individuals across the organization to take on leadership roles. Along with access to rich quantitative information, they are given the autonomy to fine-tune the business model as needed by making incremental improvements. Doing this requires clear communication of the goals and vision from top management as well as the willingness and skills to collaborate and share ideas across departments. Change-readiness is an inherent part of the culture.

Level 5: The adaptive, innovating enterprise

Innovation is the distinguishing competency of organizations at this level. These organizations continuously seek ways to reinvent and transform their value propositions. This proactive model, based on BI and creative energy, lets organizations stay competitive continuously.

  • Level 5 infrastructure features an “intelligence architecture” capable of integrating and expanding quickly and seamlessly based on organizational needs. An advanced combination of analytic tools allows organizations to test and perfect new ideas in virtual environments, thus reducing time to market. Innovation is systematically fostered and supported through information access and sharing.
  • Level 5 knowledge process encourages innovation at the highest levels. Extensive analytics provide the ability to model the future while minimizing risk. As a way of stimulating new ideas, organizations encourage and facilitate collaboration on an enterprise-wide basis. The entire innovation process is documented, analyzed, and communicated throughout the organization.
  • Level 5 people are holistic thinkers. With a keen eye for the bottom line, they are also proactive, creative thinkers. They thrive on juggling many roles and activities. They actually enjoy change and get bored if the business becomes stagnant. They know their competitors are able to reach Level 4 with cutting-edge technology. But at Level 5, they can always outpace their competitors by continuing to innovate.
  • Level 5 culture embraces holistic thinking. All ideas, even the most absurd, are examined. Processes aim to facilitate creativity and support an intuitive flow of ideas. Constant change is the norm. To support innovation, inquiry, feedback, and collaboration are embedded in all aspects of the Information Evolution Model.

According to Davis, Miller, and Russell, no organization has truly reached Level 5. Some have pockets of Level 5 competencies, but most organizations find it difficult to thrive during constant change.

Conclusions

The skills needed for success in our high-tech, global, interconnected economy are moving from the technical to the human realm. Organizations are automating or outsourcing all linear processes. Enterprise BI based on accurate, accessible, useful data is a driving force behind this shift. Innovation as a core competency lies in an organization’s ability to align its infrastructure, processes, people, and culture to progress through the Information Evolution Model.

Come back for more business intelligence and change management focused blogs by The OLIVIAGroup! Feel free to comment with questions, insights, or additions to this post. To receive alerts when the next blog is published, click on the RSS feed at the right of the page to subscribe.

Enterprise Business Intelligence: The Good, the Bad & the Ugly

The all-too-familiar promise of enterprise business intelligence is the ability to optimize decision-making at every level of the organization through a blend of systems and technologies that leverage highly useful, accessible, accurate data. In many industries, BI use is so pervasive that it is essential just to remain competitive! But many organizations never realize the full value simply because they are not agile enough to adapt to the new speed and complexity. leadership_techniques

The good: Great opportunities

Enterprise BI solutions offer a powerful competitive edge in today’s fast-paced, high-tech, global economy.

For years, organizations have been automating their reporting and online analytical processing capabilities. Recent trends are moving toward advanced analytics as the central focus of BI. This includes data mining, predictive analysis, complex SQL, natural language processing, statistics, and artificial intelligence. Advanced analytics provides a competitive advantage as it allows organizations to detect and model patterns and trends in all areas of their business, such as market shifts, supply chain economics, cost fluctuations, and more.

The bad: Typical challenges

Given the myriad of enterprise-BI solution options, just getting started can be challenging. In addition to the standard solutions that have been in use for many years, new Web 2.0 services, virtualization, social networking, and software-as-a-service options are available now, too. With so many choices and possible implications for the business, the decision-makers need to be thinking about how to optimize the balance between customer and shareholder value while considering all the financial and political implications.

The ugly: The real competitive advantage

Following an enterprise BI implementation, the expectation is that our day-to-day tasks will get simpler and more satisfying. After all, we have streamlined and automated many of the left-brain linear processes, freeing us to focus on expansion and innovation. But the reality is often very different. What many leaders don’t fully comprehend is the destabilizing effect that enterprise BI can have on an organization. Successful BI implementation requires a level of agility that is not inherent in most organizations.

Optimizing the benefits of BI in our continuously changing business climate requires the adaptability to manage the enormous complexity of redesigning processes, management structures, and measurement systems. In other words, to really understand and leverage the benefits of enterprise BI, we must understand the effect on all aspects of the organization — especially our culture and human capital. So what can we do?

An evaluation of interpersonal skills is a good first step. Why? Because in our new interconnected, interdependent organizations, team members must be able to connect and collaborate. This requires effective communication skills and a culture of trust. Skill-building in effective communication is a great place to start. Team-building and leadership development also deliver great value. Team-building develops a culture of trust. And with the current pace of change and need to adapt constantly, everyone is called on to be a leader at times.

Building adaptability through collaboration taps into the innate wisdom of the organization. The total benefit to the organization is often greater than the sum of the parts. This unleashes enormous energy for channeling into designing strategies for innovation, greater efficiency, and increased profits.

The finale

Whether you are just embarking on a BI solution, already have one in place, or are somewhere in between, it is worthwhile to assess and develop the interpersonal skills of everyone in your organization. The effectiveness of your BI solution will depend on the cohesiveness and agility of the CIO and his or her team. The failure of BI is typically blamed on the technology. But in truth, it is often a people issue.

Come back for more business intelligence and change management focused blogs by The OLIVIAGroup! Feel free to comment with questions, insights, or additions to this post. 

A Dynamic Organization Principle #9

Use Organizational Instability to Catalyze Learningleadership_training_models_

Organizations that succeed in leveraging instability unleash enormous amounts of energy for fueling innovation and adaptability. As situations present themselves—such as a new competitive threat or loss of investment money—management must maintain a delicate balance between reacting too quickly and resorting to old patterns.

Working in a culture of constant instability can be stressful, especially when it is new to the organization. Because of years of experience with the stable, predictable model, many managers resist moving to a model of permanent instability. What is required is a delicate balance between maintaining enough discomfort for learning and productivity to be optimized while avoiding the risk of demotivation, paralysis, and complacency.

Some tactics are well suited for fueling innovation and adaptability. One is to make sure that every member of the organization knows the truth about the difficulties facing the company. Holding people accountable is important. Doing so might include publicizing risk taking to highlight successes and explain shortcomings while avoiding blame. During times of stress, typically 20 percent of employees step up to be change agents. Another 20 percent resist or retreat. By raising the visibility of the change agents, the other 60 percent typically follow their lead.

Encouraging diverse points of view enhances adaptability. Discussions that support opposing points of view often trigger ideas that can be advance warnings of needed transformation.
To maintain the energy and loyalty essential to adaptability, organizations should design and share relevant metrics. A strong vision accompanied by clearly communicated roles and responsibilities will lead to accountability. With distributed decision making in a rapidly changing environment, success metrics must be clear and equitable.
Come back for the last Principle on Leading a Dynamic Organization! Feel free to comment with questions, insights, or additions to this post. To receive alerts when the next blog is published, click on the RSS feed at the top left of the page to subscribe.

Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000)

Use Organizational Instability to Catalyze Learning

Organizations that succeed in leveraging instability unleash enormous amounts of energy for fueling innovation and adaptability. As situations present themselves—such as a new competitive threat or loss of investment money—management must maintain a delicate balance between reacting too quickly and resorting to old patterns.

Working in a culture of constant instability can be stressful, especially when it is new to the organization. Because of years of experience with the stable, predictable model, many managers resist moving to a model of permanent instability. What is required is a delicate balance between maintaining enough discomfort for learning and productivity to be optimized while avoiding the risk of demotivation, paralysis, and complacency.

Some tactics are well suited for fueling innovation and adaptability. One is to make sure that every member of the organization knows the truth about the difficulties facing the company. Holding people accountable is important. Doing so might include publicizing risk taking to highlight successes and explain shortcomings while avoiding blame. During times of stress, typically 20 percent of employees step up to be change agents. Another 20 percent resist or retreat. By raising the visibility of the change agents, the other 60 percent typically follow their lead.

Encouraging diverse points of view enhances adaptability. Discussions that support opposing points of view often trigger ideas that can be advance warnings of needed transformation.
To maintain the energy and loyalty essential to adaptability, organizations should design and share relevant metrics. A strong vision accompanied by clearly communicated roles and responsibilities will lead to accountability. With distributed decision making in a rapidly changing environment, success metrics must be clear and equitable.

Come back for the last Principle on Leading a Dynamic Organization! Feel free to comment with questions, insights, or additions to this post. 

Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000).

 

Business Intelligence Success Factors

Transform challenges into opportunities with emerging Business Intelligence Technologiesbusiness_intelligence_success_factors

Written by an expert in data mining and statistical analysis, this valuable resource unveils the connection between the increased use of BI and the need for new, proven theories and models in BI, as well as the guidance to implement them successfully in your organization. Are you ready to become adaptable? Learn how to harness today’s rapidly evolving global economy with Business Intelligence Success Factors.
Praise for Business Intelligence Success Factors: Tools for Aligning your business in the Global Economy

“Olivia Parr Rud does a remarkable job of weaving together many topics in a strategic way. As ‘quants,’ we’re fascinated with data and fact-based decision-making. But success only comes when you consider the human factor, especially effective communications. Making topics like evolutionary biology, complexity science, and systems thinking relevant for business success is a unique and compelling view. As Max Frisch said, ‘We hired workers and human beings came instead.’” —Anne Milley, Senior Director, Technology Product Marketing, SAS”

Business Intelligence Success Factors is a must-read for anyone implementing BI on an organizational level. This book explains the business landscape and the underlying reasons for our current volatility, offering clear guidance on navigating our information rich global economy.” —Ron Powell, Editorial Director, Business Intelligence Network

PurchaseBusiness Intelligence Success Factors from Amazon

A Dynamic Organization: Principle #1

Create Adaptive Strategies

A primary role of management is to define the vision or the overall goals for the company. Generally, the next step is to define the strategy. Traditionally, strategy also is set by management and delegated throughout the rest of the organization. However, in a highly volatile global economy, this approach can prove limiting if not devastating when unforeseen circumstances occur.

dynamic_organization

In a highly adaptive company, management shares the vision and allows the strategy to emerge. A diverse employee base is a real benefit in this case because it allows for a wider range of strategies. The best approach is to have several strategies that can be implemented quickly, given different economic stimuli. “They [management] must do this by visualizing alternative futures on the basis of probability-weighted trends.”[i] Doing so may require abandoning past trends, a difficult task for many established businesses.

Companies can take several approaches to prepare for and leverage unforeseen events that demand a change in strategy. One tactic is to design “what-if” scenarios to serve as alternate long-term strategies that ensure adaptability in the face of unpredictable economic forces.
Another tactic is to define business units around a group of skills that provide the flexibility and resources to pursue new opportunities in a volatile economy. Doing so unleashes a creative energy that leads to adaptability and innovation.

A strong Business Intelligence infrastructure is critical to adaptability. Networks designed to effectively transfer information about inventories, staffing, and trends help to eliminate time lag and reduce errors across supply chains and between partners. Dashboards that track daily trends are able to reveal weak signals. The role of revealing weak signals is defined in chaos theory as one that can magnify and transform entire systems during times of instability. Direct interaction between top managers and the rank-and-file is also important. Companies in which leaders connect with employees on a regular basis are much better at noticing weak signals as signs of shifting markets or other changes.

Organizations that access the innate wisdom of their organization to tap into future trends encourage and reward innovation and simultaneous access and create future market trends.
In traditional organizations, strategic planning usually consists of analyzing and applying past trends to the future.

“The statistical quantification of past trends, the rigor of mathematical models, and the fact of including hard historical evidence in a structured framework remain important to the strategy-formulation process. But they also can stifle creativity and block insights about future trends.”[ii]

While this method works well in a stable economy, it can suppress creativity and inhibit adaptability in economically volatile times. If structures are solidly built on past trends, many organizations are not resilient enough to survive a quick change in market trends.

Stay tuned for the next 9 Principles on Leading a Dynamic Organization! Feel free to comment with questions, additions and situations in which you have implemented these creative adaptive strategies.

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[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 43.
[ii] Ibid., 51.

Principles Of Leading A Dynamic Organization

At the executive level, the rules of the game have changed. Just ten years ago there  was no Sarbanes-Oxley, the Internet was in its infancy and corporations were coming  to grips with globalization. Managing in a global, technologically driven, and fast- changing economic environment requires a more complex set of skills than those needed by managers in the past. My clients are looking for innovative leaders who can  adapt and manage through continuous change. —Jerry Bernhart, Bernhart Associates

principles_of_leading_a_dynamic_organization

In Large-Scale Organizational Change, Christopher Laszlo and Jean-François Laugel define the 10 Principles as guidelines to action that “offer an integrated approach to the main managerial processes of a company: strategy formulation, annual budgeting, investment appropriation requests, controlling, and project management.”[i] To support the implementation of the principles in a dynamic organization, they offer some tactics that are designed to work in complex and chaotic environments.

The 10 Principles tackle the central issues of corporate management in the areas of strategy, organization, and execution. However, the focus is on the dynamics involved. Since they are designed to guide dynamic companies that thrive on complexity and instability, they cannot be applied separately. They must be seen as a comprehensive approach. “As a part of a mind-set, the 10 Principles are an effective basis for action that lead

s to corporate renewal and development of the capability to survive frequent and radical discontinuities in the operating environment.”[ii]

Over the coming months I will deliver the 10 principles of Leading A Dynamic Organization to you through my blog. These principles can also be found in my book Business Intelligence Success Factors, Tools for aligning your business in the global economy. Take these tips and tools to add to your arsenal of leadership skills.

[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 36.
[ii] Ibid., 38-39.