Sharing My Truth & An Invitation To Participate In Leading-Edge Innovation Research

Have you ever felt like you had to hide part of yourself to survive in the corporate world? For the last 20 years, I’ve built my career on the study and practice of data mining and business intelligence. I shared many practical solutions in my first book, Data Mining Cookbook (Wiley 2001). But my real passion has always been the study and practice of human intelligence. And for a long time, I felt that I had to keep that passion separate from my ‘real’ work. But a few years ago, I began to see a relationship between the level of human development within an organization and the successful use business intelligence. I shared this research in my second book, Business Intelligence Success Factors (Wiley/SAS 2009). Now I’m discovering that for these concepts to be really useful, they need some structure. So I’m developing a model that tracks the evolution of business intelligence along with human intelligence on an organizational level.

So here’s the deal… I’d like you to participate in a research project that is inspired by the following statistic: According to Gartner, 70% to 80% of corporate business intelligence projects fail due to poor communication http://tinyurl.com/793ehvh . Given the high dollar value of these projects, even a partial failure can be catastrophic to the bottom line. And the failure isn’t due to faulty business intelligence. It’s due to faulty human intelligence!
To understand the connection, let’s consider why Business Intelligence is so critical and what is required for success. Hint: It’s all about Innovation!

surveyIn today’s high-tech, global economy, most linear processes can be automated or outsourced. This really levels the playing field for many large organizations. To remain competitive, companies must continually reinvent themselves. Therefore, innovation is becoming the main differentiator and key driver of success.

For a large company to be truly successful, innovation must be embedded in the systems, processes, and organizational culture. This requires a high level of agility and adaptability which is built upon competence in two main areas: business intelligence and human intelligence.

Business Intelligence is generally understood to be a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information (Wikipedia).

Human Intelligence is more subjective and open to interpretation. For this research, I am defining it as the levels of emotional and social competency of the employees of an organization with a special emphasis on the leadership team. It is the human intelligence that translates the data into actionable business knowledge which leads to better decisions and smarter actions. To really be successful, business intelligence and human intelligence must evolve simultaneously.

The goal of the survey is to understand and measure the alignment between the level of business intelligence and the level of human intelligence and to determine to what degree this alignment is correlated with the success of the organization. To test my thesis, I’ve created a survey that explores multiple aspects of the processes, culture, and performance of a typical mid-size to large organization.

If you are an employee of a mid-size to large organization or if you are an independent consultant that works with large organizations, your participation is invaluable and sincerely appreciated. If you are a consultant, please feel free to answer the questions as if you were holding a position with one of your client organizations.

The survey takes 5-10 minutes. All responses remain anonymous. Each participant will receive a summary of the results. Please feel free to forward this to others as you deem appropriate. https://www.surveymonkey.com/s/OAQSurvey

Making Creativity Your New Competitive Advantage

In today’s digital economy, if it’s linear, it’s usually automated or outsourced! Think about it: What were you doing 10 years ago that’s now accomplishable at the push of a button? Campaign management? Performance analytics? Data management and storage? Do you see a trend? So where are we headed?

creativity

Technology forecasters predict hundreds, if not thousands, of new products will enter the market over the next decade to handle routine activities. In data mining alone, we have seen incredible changes. Years ago, we spent weeks building predictive models by hand. Today, predictive modeling software delivers more powerful models through streamlined, menu-driven processes that take minutes!
So what does that mean to us? If our competitive edge is based on linear processes, our competition may be able to buy software that accomplishes the same thing within a few years. What can we do to stay competitive? Quit using half our brains!
In today’s highly complex, competitive economy, our challenge is to create an environment that encourages “whole brain” thinking. To emphasize the importance, let’s look at a simplified model of how the brain works. To understand its function, the brain is divided into quadrants: The left cerebral mode handles the logical, analytic, and quantitative functions; the left limbic mode handles sequences (remember linear?), planned and detailed functions; the right cerebral mode handles the intuitive, integrative, synthesizing functions; and the right limbic mode handles the emotional, kinesthetic, feeling-based functions.

brain-sectionsMost problem-solving occurs in the brain’s left hemispheres. We begin in the left cerebral mode, where we memorize the correct answer. Then we move to the left limbic mode, where we make plans based on memorized rules and norms. This works well for many routine data-mining tasks, such as finding the average income of your customer base or calculating the response rate of a campaign. But if you are facing a new challenge like unexpected account attrition or a spike in insurance claims — events for which you have no rules — the left side of the brain can’t provide a solution. We completely miss the right-brain functions of intuition, integration, and synthesis, and so are unable to incorporate our emotions or feelings into solving a problem. By skipping the right side of the brain, we diminish our ability to think creatively.

In whole-brain problem solving, we begin in the left cerebral mode with the memorized answer. But we then move to the right cerebral mode and create a mental picture or image. This gives us a nonlinear view of the problem. When we move the problem into the right limbic mode, we may think of some atypical solutions or even have an “aha” experience. From there, we move back into the left limbic mode to formulate a solution.
So why is it so difficult to use creativity? First, creativity produces variance and decreases predictability. So if management has a high need for control, encouraging creative thinking is difficult. Another reason is that tapping into our creativity takes concentration. If our work environment is noisy and distracting, accessing the right side of the brain is difficult. And, finally, creative thinking requires some “downtime” to get the juices flowing. Did you ever notice how you get great ideas in the shower or while exercising? You might argue that you do not have the time or it is not cost-effective. But creative ideas that lead to small improvements to a marketing campaign can save or make millions.
How can we encourage whole-brain thinking? This can be difficult if it requires a drastic change in the company culture. But we can take several steps to facilitate it for ourselves and our staff:
Encourage group discussions where ideas are embraced. Brainstorming is an excellent way to get the creative juices flowing.
Change old habits: Use your non-dominant hand for routine tasks; take a different route to work.
Create a workspace that helps you stay balanced: Play music; fill your office with objects d’art; spend a few minutes in silent contemplation each day. It’s not a waste of time. It’s incubation time for the next million-dollar idea!
Webster’s defines genius as “Great mental capacity and inventive ability; esp., great and original creative ability in some art, science, etc.” So the next time you effectively use your whole brain, they might call you a genius!
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.
Visit www.OLIVIAGroup.com to learn more about Business Intelligence and hiring Olivia Parr Rud for your next conference!

Business Success: Morphing Current Businesses

Business Success: Morphing Current Businesses

Many traditional businesses are adapting their business models based on customer behavior. Amazon.com, the online bookseller, has grown into an Internet giant while many brick-and-mortar bookstores have closed. The publishing world has seen a change as authors enter the market independently using print-on-demand services.new-business-model

Many small businesses are now gaining access to world markets. And larger, more established retail businesses, especially those with a traditional catalog presence, are creating sophisticated shopping experiences for their customers on the Web.[i]

Why are Amazon.com, Lexus, and Disney partnering with lesser-known online companies to sell products? According to Wiredmagazine’s Ian Mount, the large companies are moving toward the manufacturing-as-a-service model to stay competitive. It has become necessary to compete with the small entrepreneurs who are producing and distributing products on demand. The production of products has become a commodity.  Because of the low cost of entry, anyone with a good idea can compete in this market.

New businesses that leverage this model are popping up everywhere, and many have global reach. Jeffrey Wegesin, a furniture designer, advertises his designs on the Web. Upon receiving an order, he contracts with an on-demand manufacturing service in New Zealand to create and ship each piece. He has no inventory or other up-front costs. His business is pure profit.

Designers of clothing, jewelry, robots, you name it! The model is inherently charming because of its efficiency and simplicity. Individual musicians and authors can market their goods without any up-front investment. With little more than a product idea and a good design, anyone can become an instapreneur.[ii]

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


[i]             Bradley and Nolan, Capturing Value in the Network Era, 7-8

[ii]             Ian Mount, “Upside of the Downturn: 5. The Rise of the Instapreneur: Manufacture and Sell Anything in Minutes,” Wired (April 2008), 129

A Dynamic Organization Principle #10

Re-envision Leading: From Command and Control to (R)Evolutionary Influence


Motivation is the art of getting people to do what you want them to do because they  want to do it. —Dwight Eisenhower

In contrast to years of hierarchical management, leaders in adaptable organizations play a more subtle leadership role. They are the visionaries who envision a future that seems impossible today. They inspire, empower, and motivate others to make decisions. They manage the flow of information and communicate extensively. They take the broadest possible view and encourage collaborative problem solving.

The term (r)evolutionary influence is used to capture these qualities. The evolution of management_for_changecomplex systems is guided by probabilistic influence rather than deterministic control. When discontinuities arise, leaders must occasion a revolution by declaring a future others may not see as possible, and get alignment in the organization so that actions forward that future.[i]

The leadership model in the adaptable organization is more egalitarian. A manager might admit to not knowing an answer or even know the answer but still delegate that executive decision to someone on the front line. Rather than being the solver of all problems, the leader’s role to disseminate decision making by engaging the whole organization in the bidirectional sharing of information and knowledge.

Some powerful tactics facilitate and encourage evolutionary influence. Leaders must be willing to let go of control, take calculated risks, and envision the impossible for themselves and the organization. To maintain an environment of perpetual transformation, they must be willing to accept a higher risk of failure. This is achieved by treating everyone in the organization like a valued member of the team. True dialogue and information flow are necessary to facilitate communication. Conflict is managed effectively, leading to the generation of new ideas and energy.
Referring back to fractals, it is essential to see the system in its entirety. Each decision must be linked to the larger context. Some decisions may be suboptimal for a small group but still serve the larger good. The survival of the system depends on the quality of the relationships of each of its parts.

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[i]Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), , 124.

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).

 

A Dynamic Organization Principle #8

Fluidify the Organizational Structure

The flow and accessibility of information is critical in complex organizations, especially those with global reach. The best structures are those that avoid rigidity. Community-based organizations are structured to optimize collaboration between horizontal units while requiring minimal input vertically. Their network structure facilitates the flow of information and task allocations diagonally, leading to maximum adaptability.management_of_change

The level of localization or decentralization depends on the conditions necessary for self-learning. The goal is to allow a structure to emerge that optimizes the ability to make rapid and relevant decisions. These structures will evolve over time as the organization grows and diversifies. Decision making is delegating to the front line with a mechanism for self-learning. Management does not set the goals and means. Rather, it sets the overall aim and allows each organizational unit to determine its own path through communication and collaborative decision making.

These tactics facilitate the development of a fluid structure with in a learning organization:

  • The creation of multilevel project teams supports a community-based structure. Senior management should delegate resources and objectives to the lowest possible level. Performance should be measured on both a team and an individual level.
  • Continually changing demands can lead to unclear reporting relationships. To facilitate learning, the organization should clearly define accountabilities while tolerating some lack of clarity. This becomes more natural as companies experience the value of community-based structures. Specific objectives and defined responsibilities lead the process while maximizing flexibility and learning.
  • Horizontal information flow and communication is very important. Within community-based organizations, information flows freely. Interconnectedness is facilitated by a plethora of communication devices. Therefore, the challenge is moving from information availability to discretion and relevance.

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

A Dynamic Organization Principle #7

Design Decision-Making Systems for Self-Organization

model_change_management_
An efficient and effective decision-making system is critical to survival in a complex, volatile economy. Organizations must develop processes that encourage self-organization. Doing so requires an open sharing of the vision, the free flow of information, and strong communication between all levels of management on down.

Decision making is one area where rigor and precision are beneficial in an otherwise fluid atmosphere. Respect for people’s time must be balanced with ensuring that everyone has a voice. Creative incentive packages, such as the ones discussed in Business Intelligence Success Factors regarding collaboration, enhance emergence of self-organization.

Complex organizations require a variety of decision-making styles. Some are designed for day-to-day operations while others focus on long-term issues. For example, formal decision making regarding important issues of management and predefined time periods, such as strategic planning, annual budgeting, and executive committee meetings, is typically well designed and structured. Formal, nonperiodic decision making designed to handle unexpected situations may also follow a set format. Formal decision making is used when a decision is needed with regard to a major restructuring, new directions, or investments and crisis management. Since formal decision making covers a variety of areas and are not planned very far in advance, the attendees may not be known ahead of time. These types of meetings are more common in complex organizations that aim to adapt quickly to market changes. Informal decision making can happen anywhere. It is important for leaders to be aware of the effect of limited input on their decisions. Managers who want to promote self-organizing, team-based, distributed decision making must recognize their power to influence through their conversational style and remind others that their opinion is just one of many that deserves consideration.

To foster self-organization, a company must guide its decision making to resemble that of an entrepreneurial enterprise. For example, reducing the presence of top management in the day-to-day operations is a good first step. Combined with an effective information exchange through every level of the company hierarchy, this shift ensures that the flow of information goes beyond the typical sharing of knowledge to include daily insights, ideas, and issues as they arise.

Self-organizing companies need teams that have a broad range of skills that represent a microcosm of the company. Such companies can adapt more quickly due to competent leadership and decision making at many levels.

Learning by doing serves large companies by reviving the entrepreneurial spirit. New challenges inspire people to connect with others to find solutions and increase learning. This leads to faster adaption of new ideas that energizes the workforce and unleashes innovation.
Complex organizations that share decision making and accountability must also share compensation. Many financial instruments to associate compensation with performance exist, such as employee stock purchase plans, cash bonuses, and stock options. One creative practice by Thermo Electron is the practice of spinouts. The company “hands over day-to-day control of newly formed subsidiaries and fistfuls of share options to the staff. The stock has returned 20% per year since the practice began.”[i]

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Learn more about Business Intelligence and hiring Olivia Parr Rud for your next conference give me a call

A Dynamic Organization Principle #6

Develop Ambitions Greater than Means

The limits you create will be real to you until you learn to step beyond them. Then, you  will look back at the reality you used to inhabit, wondering how you were able to stand  its narrow confines. —Paul Ferrini, Author and spiritual teacher

Companies looking to engage in perpetual transformational opportunities are most successful when they set their ambitions much higher than their means. As people participate in the vision, energy is released that inspires innovative ways for reaching the goal.

People who feel passionate about the vision step up to be leaders. Others wait until the goal seems more tenable before they engage. Abusiness_intelligence_success_ few resist and may add to the instability. However, if handled skillfully, the contrasting tensions can assist the transformation.

It is becoming increasingly apparent that companies that do not stretch their vision will be surpassed by the competition. These actions can assist companies to stretch their vision and prepare people for perpetual transformation:

  • Express a vision or strategic intent to members of the organization that leads to breakthrough thinking and action. By allowing the participants to embrace a grand vision, leaders naturally align themselves and move beyond what was once considered impossible.
  • Disperse control. The complexity of a major shift in vision requires top leadership to disperse control. By sharing the vision and empowering the participants, the idea takes on an energy of its own. The role of leadership is to continually share the vision, provide support, and celebrate accomplishments.
  • Stay focused and harness energy. In large, complex organizations, many transformative processes may be happening at the same time. The key to success is to stay focused and harness the energy created by the overall goal. A simple rallying cry, slogan, or watchword is helpful to thread the varying activities and maintain high spirits.
  • Discuss change and introduce points of inflection. Introducing a new vision when most members of an organization are satisfied with the status quo may prove to be futile. Most organizations are more susceptible to major shifts in focus during times of crisis. Starting a conversation about what might happen if the market shifts drastically can begin to prepare members for change. Introducing an artificial point of inflection is another option for stimulating receptivity.

Come back for the next 4 Principles 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.
__________
[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 79.

A Dynamic Organization Principle #5

Link Transformation to Shareholder Value Creation

Shareholder value has long been the single measure of company value. However, as organizations are exposed to continuous uncertainty, they need to behave more like living systems to survive. The survival of living systems “is measured according to strict criteria of adaptability and fit with the sustainable environment.”[i] However, there are some challenges when managing shareholder value in a complex and unstable competitive environment:

  • In a highly volatile economy, the accuracy of measures such as discounted cash flow and expected losses is diminished. It is team_building_change1difficult for highly adaptive companies to predict how much their core business might change in a few years.
  • It is difficult to capture the value added from a company’s management style or decision-making capabilities. “During rapid transformation, change processes become more influential in determining financial performance than either structure or traditional processes.”[ii]
  • Companies are beginning to see the impact on cash flow from connecting with other groups, such as their communities, partners, and the environment. Quantifying this value continues to be challenging.

In summary, the method of calculating economic value added must be “modified to integrate perpetual transformation rather than one-time (or periodic) shareholder value initiatives in managing a business portfolio.”[iii]
The next actions are designed to assist companies in determining shareholder value in a complex and volatile environment.

  • Develop different cash flow scenarios. Organizations will be in a stronger position if they develop different cash flow scenarios for multiple futures based on the best estimates of what will change and how the market will behave in the next few years. The actual exercise of scenario building and the resulting discussion are more important than getting the estimates exactly right. The flow and exchange of ideas is valuable in generating the preparedness for the next phase.
  • Link shareholder value at every phase. When new business lines or other opportunities emerge through the adaptive process, it is essential to link shareholder value at every phase and ensure “sufficient coherence among strategy, finance, organization, and implementation.”[iv]
  • Focus on growth strategies. Such a focus is essential, even if it requires actions such as downsizing, restructuring, and reengineering, when an adaptive company is experiencing a major transformation.

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[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 79.
[ii] Ibid., 80-81.
[iii] Ibid., 81.
[iv] Ibid., 84.