Mid Sized Enterprises

Avoid Organisational Information Hoarding

A stack of foldersIn small enterprises, job roles can be very blurry. Since there are few people working for the company, the boundary of each job role tends to flex in order to meet demand.  Over time, and as organisations grow, it is likely that this will change and each individual’s role will become more tightly defined.  How tightly defined each role becomes depends on a number of factors including structure, culture and leadership style. However, in midsize and larger companies it’s likely that there will be less flex in each role, with each individual having a clearly defined role.

 

Clearer role boundaries certainly have significant advantages, yet over time a hidden problem can emerge.  Sometimes individuals in organisations start to ‘hoard’ information, knowledge and data that is relevant for their specific role.  Perhaps they are the only person in the organisation who has access to the data that is needed to create a particular sales report.  Or perhaps they are the only worker who knows how to operate a certain system or process.  There are various reasons why an individual might hoard information in this way – for some it might be completely unintentional.  In some cases it might be down to circumstance, with not enough staff available to support them.  However, in other cases an individual might subscribe to the view that ‘knowledge is power’, and therefore continue to intentionally find ways of absorbing more and more data, information and knowledge.

 

When silos of this type emerge, for whatever reason, there are real organisational risks attached.  However efficient and effective a particular individual within an organisation is, it is incredibly problematic when they are the only person able to execute a particular process or tap into a particular data source.  This creates a key-person dependency and a potential bottleneck. If that person goes on an extended vacation, for example, the organisation may suffer as a result.

Worker struggling to hold a number of folders

The worrying truth: The business world runs on spreadsheets

Worker struggling to hold a number of foldersI recently came across an interesting discussion on LinkedIn that highlighted the dangers of relying on spreadsheets.  The discussion made reference to an article on Fortune.com, which showed how a range of large and powerful organisations allegedly made significant analytical errors. These errors allegedly included the way they valued acquisitions and calculated risk, amongst other things.  One common cause that the article cites is simple: The organisations relied on spreadsheets for complex analytical calculations and data manipulation, and once errors had permeated into the spreadsheets, they went unnoticed until disaster struck.

 

The article reminded me of how many times I’ve seen and heard of spreadsheets being used in extremely important situations.  It never ceases to amaze me how many midsize and even multinational organisations use spreadsheets for very complex tasks, and I guess that everyone reading this will have seen at least one example where a spreadsheet is being used where a different tool would be better.  I remember once being told about a team relying on an extremely complex spreadsheet (with macros) that had been built by someone who had subsequently left, and nobody had any idea how the spreadsheet worked.  If the spreadsheet were ever to break, they would be in a very difficult situation indeed.

 

Of course, spreadsheets have their uses.  A spreadsheet’s beauty is in its flexibility, but there also lies a pitfall. It’s very easy to just start ‘building’.  If this pattern continues, then before long you are left with a plethora of separate spreadsheets maintained by disparate teams.  It can soon become someone’s full-time job to copy and paste data between the various sheets and interpret the results.  And with a veritable mixture of manual intervention and manipulation of data, there’s a real danger of errors creeping in, just as the case study above Illustrates.  These risks and these hidden costs can grow and can cause real organisational pain.  This growth in unofficial and unacknowledged spreadsheet-based applications often happens entirely under the radar, meaning that nobody really knows what it costs the organisation.

 

There has to be a better way

Person about to step on banana skin

The danger of ‘no brainer’ decisions in business

Person about to step on banana skinIf I were to take a guess, I’d bet that we’ve all been in situations where we need to make an important decision quickly – where one of the possible options is presented in such a compelling way, it seems like a foregone conclusion.  Perhaps the option appears to have benefits that are so hugely significant, it is seen as a ‘no brainer’ – a decision that is so ‘obvious,’ there is little point in putting much thought or contemplation into the decision making process itself.  Perhaps it’s ‘obvious’ that we should launch into a new market, slash our prices, buy a new software package or restructure a particular department.

 

This desire to make decisions quickly is understandable and rational – after all, it’s important that we avoid ‘analysis paralysis’ – yet a real danger awaits the unprepared.  In many cases, ‘no brainer’ decisions have far wider consequences than the decision maker might initially appreciate.  In fact, further analysis of the data might show that you are being duped into making a bad decision with confidence.  Let me illustrate with a hypothetical example.

 

Imagine an online retailer sees a sudden sustained drop in its sales.  It knows that competition in the market is cut-throat, and it needs to retain its market share.  It could be seen as a ‘no brainer’ to temporarily cut prices or offer some other type of incentive to increase sales volumes.  In some cases, this might be an appropriate response – but in others, it might lead to a dangerous race to the bottom – with all firms lowering their prices until they can bear it no longer.

 

In the hypothetical situation mentioned above, it would be far better to look at the business situation holistically. It would be beneficial to carry out analysis and look at the business environment and establish what data and insight is available.  Maybe there are other reasons that sales have dropped overnight, or other factors that should be considered.  For example: was there a similar drop last year?  Is there a seasonal peak in sales?  Has the weather been unusually hot/cold (which might affect the pattern of people buying or ‘shopping around’)?  Are people buying a completely different substitute product altogether (think Netflix affecting DVD sales)?  There would, of course, be many other factors to consider too.

 

In situations like this, it is hugely beneficial for organisations to look at their data and analytics for insight.  Carrying out analysis in this way – before making so called ‘no brainer’ decisions – helps to avoid the ‘knee jerk’ reactions that can lead to unexpected and unfavourable outcomes.  Ensuring that businesses move from data collecting to curating actionable data and insight is key.

 

So – if you’re presented with a ‘no brainer’ decision, what should you do?  Here are five key questions that you might consider asking:

Forced Business Cases and the danger of faulty thinking

Picture of man at junction with mapThe humble old “business case” gets a very bad reputation in some organisations.  A good and well written business case is a crucial document that helps organisations and teams decide which projects to progress with and even which products to launch.  In many ways, a business case is a mini business plan, showing the costs, benefits, risks and impacts of adopting a proposed course of action.  It shows the reasons for the recommendation, and it shows the options considered.  Depending on the organisation it might be written at different levels of formality—in many ways the underlying thinking and analysis is more important than the document itself.  The business case draws on insight and data from within the organisation, and a good business case will draw on the organisations analytical capabilities.

 

Overall, the business case protects those making an investment in a particular project or product launch and ensures that they go into the endeavour with their eyes wide open.  It ultimately contributes towards protecting the interests of the organisation’s owners – who may as well be shareholders.

 

On the face of it, the creation of a business case sounds logical, and it sounds like a perfectly natural thing to do.  I mean why would anyone object to knowing the costs and benefits of a proposed course of action?  Yet I suspect many people reading this—from organisations of all sizes whether multinational or midsize— will have experienced situations where there was a desire to “fudge” the business case.  Perhaps you were asked to selectively ignore some data, or put a particular spin on things to “force” a particular course of action.

 

There, I’ve said the unthinkable.   Call me a heretic!  However, in reality, business cases get fudged.   And this isn’t always deliberate—sometimes business cases are unconsciously misinterpreted or misrepresented and this faulty thinking leads to organisations unknowingly taking bad decisions with complete confidence.  They might even end up with a “turkey project” that should have been culled at the outset.

 

Warning signs for a faulty business case

The world needs more U-Turns

Motorist with mapI hazard a guess that many people reading this article will own a GPS satellite navigation system (“GPS” or “Sat-Nav“) – I know I certainly do.  I’ve always been very bad at both navigating and driving at the same time, so when driving in an unfamiliar city, I find a GPS sat-nav absolutely indispensable.  Of course, it won’t always navigate to the precise location desired, but it gets very close.

 

I was recently driving around Birmingham, which is a city I visit only very occasionally, and even with automated directions, I managed to drive right past a turning.  My sat-nav (GPS) registered my mistake immediately, and made an announcement that all drivers dread….

 

  “Make a U Turn where possible”

 

With the help of this announcement I quickly realised my mistake, found a safe place to turn, and then I was quickly back on my way.

 

As I was doing this, it struck me how in business the word “U-Turn” seems to have a uniquely negative connotation.  If leaders of organisations or projects make a “U-Turn” this can be seen as embarrassing; it is painted out as a lack of conviction or lack of leadership.  This has an interesting side effect: It can lead to stakeholders stubbornly entrenching themselves into illogical or unsustainable positions, because to be seen to change their view could be a political and organisational nightmare—and this might be seriously career limiting! This pattern happens in organisations of all sizes; whether mid-size, small or multinational.

 

U-Turns aren’t inherently bad

Start with the outcome in mind

Diverging IdeasA few weekends ago, I caught up with some old friends at a local restaurant.  When the waiter came over, one of our party wasn’t quite ready to order – so I ended up making awkward ‘small-talk’ to fill the conversational void.  As anyone who has ever visited the UK will know, we are often seen as being obsessed by the weather – as that’s what we tend to talk about in situations like this.  So, in full compliance with that cultural stereotype, I went into ‘weather mode’ and commented on how good the weather had been over the past few weeks.  In fact, we’d had a lot of bright sunshine – and I commented on how I hoped that this is a sign of a good summer to come.  The waiter agreed, but added:

 

“Yes, let’s hope for a good summer! Although while we’re holding out for good weather and sun… the farming community will be hoping for rain… I guess only one side will get its wish!”

 

On the face of it, this is a pretty obvious statement, isn’t it?  However, extend this thinking further might lead us to conclude that there are all sorts of viewpoints and communities vying for slightly different things when it comes to weather.  If you own a reservoir, you want enough rain to keep the reservoir topped up.  If you run an outdoor amusement park, you’ll want sun to attract visitors.  If you run a shipping company, you’ll probably be fine with any weather as long as it’s not too windy or too extreme.  Actually all of these things are interlinked (not enough rain in the reservoir is a problem for everyone, and if the ships can’t arrive then we won’t have enough supplies).  There are so many different viewpoints with different perspectives, needs and wants – some of them implicit, some of them explicitly stated.  It’s a complex situation!

 

And this isn’t unique to weather… I bet you see it in your organisation too…

 

What this means for business and business analysis

Chain

The great “fire and forget” fallacy

ChainAs any business analyst will tell you, having a decent set of business processes can really help an organisation to excel.  When organisations have efficient and effective business processes, supported by the right people, technology and organisational structure, there is the best possible chance of sustained success.  This applies to organisations of all sizes, from huge multinational to small or midsize enterprises.   Accordingly, many organisations spend time mapping out, analysing and measuring the efficiency of their processes.  By building in regular measurement and feedback, it’s possible to improve continuously.

 

Yet there is danger waiting for the unwary.  When thinking about processes, it is extremely easy for our business stakeholders to get blindsided by the “Fire and Forget” fallacy, and end up tweaking and changing processes in a way that might make them worse overall.  Let me explain…

 

Don’t “fire & forget” 

When mapping out, analysing or improving processes, often our end-users and stakeholders will immediately want to dive into the detail.  They’ll talk about the individual steps that they undertake for a particular task.  They might be brimming with ideas for improvement – but there is a danger that the improvements that they bring to us are extremely localised.   Each stakeholder might be telling us about only part of a wider, underlying end-to-end process.

 

Lady with sticky note showing lighbulb

Selling an idea: Ensure your message strikes an emotional chord

Lady with sticky note showing lighbulbI’d hazard a guess that everyone reading this article has, at some point, tried to sell an idea within an organisation.   Perhaps you’ve tried to get a project off the ground, or maybe you’ve tried to convince your peers to stop working on a project that was about to go off the rails.   In all organisations we’re likely to need the buy-in and co-operation of others to get things done, so influencing—which we might consider a type of ‘selling’—becomes so important.

 

Before we try and sell an idea, we’ll often need to go and check whether the evidence and data seem to support our hypothesis – if it doesn’t, perhaps we need to go back to the drawing board.  If it does, we can use it to help strengthen our cause.  If you have an analytical mind-set, you might find that you spend a lot of time considering the observable facts and data.  And after collecting and collating our data, we will package it up to present it back to our stakeholders.

 

Yet how much time do we spend considering how we’ll present our ideas and data and how we’ll connect with the emotions of our stakeholders?  Or, put differently, how many presentations have you attended where the author has bombarded you with slide after slide of dry, dry figures – and you feel your eyes getting heavier and heavier as you reach for your seventeenth strong black coffee just to get through the session…

 

Decisions are often based on more emotion that we’d like to admit

Never let the customer see into the kitchen. It ruins the magic.

The small differences that make the difference

Pizza

A few weekends ago, I spent some time catching up with some friends I hadn’t seen for a while.  After spending an enjoyable few hours chatting and drinking coffee, we decided to continue catching up whilst grabbing some food at a local restaurant.  It was a busy Saturday afternoon, and we were worried that the restaurant might be full–but the waiter was extremely helpful and quickly found us a table.  As he seated us he apologised that the table was really near to the kitchen door, and it might be a little noisy.  This didn’t really bother us – we were happy chatting and generally catching up.

 

Now, I don’t know if you’ve ever sat right next to the kitchen door at a busy restaurant, but it’s quite an interesting experience.  Every time the door opened, I could hear orders being shouted.   The head waiter seemed to be doing an impression of Gordon Ramsey, barking orders across the kitchen which were then relayed by the chef with equal gusto.   I heard everything – how previous customers had received the wrong meals, how table 29 were still waiting for their drinks order—and how one of the other waiting staff just “wasn’t up to the job” in their opinion.   I learned about their booking process, that they hadn’t ordered enough of one particular ingredient and that they were running out of house wine.  I have to say it somewhat spoiled the magic.  A potentially fun experience was made less-then-acceptable by seeing too much of the ‘behind the scenes’ detail.  It would be a bit like seeing a mall worker in a Santa outfit take off his beard and light up a cigarette as he opens the door to a 1980s rusting estate car.  Some things should just be hidden from public view.

 

It’s not just about kitchens or Santas…

Insight for change: Cultivate your company’s complaints

Acorn sproutingIt’s never a pleasant subject, but chances are whether you work for a small, a mid-size or large company, your organisation probably receives and deals with complaints. Even the most careful and credible of organisations is likely to receive a complaint now and again, and organisations are often (quite rightly) keen to ensure they are resolved well.  In fact, you may well have a specialist team of complaints handlers who carefully pore over each case and ensure that the customer gets a fair outcome.

 

We often hear complaints referred to as an opportunity.   There’s a school of thought that handling a complaint well can increase customer loyalty.  Whilst this is an important consideration, there is another opportunity for us too.  It’s possible that we could use our complaints and complaints data to inform customer insight. Or, put differently, there could be advantages to using customer complaints as a catalyst for systemic change.  We could use complaints as one element of insight into what works and doesn’t work when we are thinking of kicking off business change initiatives.  On projects, we could use complaints and complaint data to predict potential customer and user needs and requirements by understanding what doesn’t currently work—before we validate this from other sources.  This could be another extremely useful aspect for us to consider when conducting business analysis.

 

This probably sounds rather abstract, so let me give you an example: