Management consulting firms are sometimes accused of charging high fees to state the obvious – which lead advertising executive Carl Ally in the 1960s to define a consultant is “someone who borrows your watch to tell you the time, and then walks away with the watch.” Getting an accurate picture of existing employee interactions is perhaps the greatest difficulty in most organizational change initiatives. By helping make sense of an organization’s communication patterns, the emerging discipline of Organizational Intelligence (OI) can help business strategists understand the relationships that drive their company’s business.
In this Business Insider interview, Serguei Dobrinevski, CEO of Hypersoft Information Systems based in Munich, Germany, talks to Roger Smith about how companies can use OI to identify employee workflow and collaboration patterns across geographies, divisions, and internal and external organizations.
How is your approach superior to what management consulting firms like BCG or Bain do? How is collecting data using agents on desktops and mobile phones better than using surveys and employee interviews?
Essentially everything employees do at work is already digitized or can be easily digitized. Their “actions” are executed by checking boxes in computer systems. Their meetings are booked and controlled by software. Their formal discussions go through e-mail, and their informal discussions happen on enterprise social networks. Employees create products on computers, and they also consume them on computers, or mobile devices. Just try to think about some work-related activity that bypasses those computer systems. You may be able to, but it’ll be very challenging.
From this perspective, if you have to analyze what is going on in an organization and how to improve efficiency, it is only logical to tap into those data on computers and mobile devices. It’s a strange paradox that various secret government services like the NSA in the U.S. will access our data to understand what we are doing, without any consent from our side, whereas we don’t use these data to better understand ourselves. Yes, in the classical management consultancy business you have to go through manual data collection in interviews and surveys. This process is manual not by intention, but simply because the critical mass of digitized activity data has only become available in the last couple of years. I believe that established management consultancies will turn to these new data sources as well, that just takes some time.
What do you think about putting sensors or “digital dog tags” on people at work?
Honestly, I do not like this idea because of two reasons:
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First, putting a tag on yourself triggers the feeling of being under some sort of special surveillance. Second, most of the information you get is just redundant, because the same information can be obtained from your mobile phone or from your computer. We should be candid and admit that our work is already fully digitized. If I have fundamental concerns about this, I need to find another job. If I have no problem being digitized, I may still want to restrict other people’s access to these data. That means understanding what data are available, who can access them, and how can I effectively take control of that process.
Let’s talk about specific applications of Organizational Intelligence:
Last year, Yahoo CEO Marissa Mayer sparked controversy when she announced an end to the company’s telecommuting program. Could chief executives like Mayer use Organizational Intelligence to measure the productivity of co-located workers versus remote workers to decide if people should be allowed to work from home?
Productivity of knowledge workers is a very non-trivial concept. Even in much quantified areas, such as sales, you cannot measure productivity simply in dollars or Euros of revenue per employee. A sales person in a new territory with a new product may produce one-third of the revenue of his colleague in an established patch with long-standing customers, and that may very well be desirable and highly efficient for his employer. In our organizational intelligence methodology, we are developing some interesting metrics to capture such things as “importance” or “influence”. It turns out that indeed in many cases those metrics are lower for people who spend much of their time working remotely. Although you always have individual cases that are different, I can confirm that being in the office does correlate with greater contribution of individual employees to the overall work results.
On the other hand, we have seen indicators that technical quality of those remote connections is also quite important. People who are connected through video tend to be more similar in their influence to persons of the same function who work from the office.
In the same vein, many companies are under pressure to reduce office space as part of cost saving / desk space improvement programs. Can OI play a role in helping companies decrease space and increase job satisfaction and collaboration?
There are limits to everything, and you cannot make anybody happy in a space of one square meter. Still, the concept behind many such projects is to transform the way people work, and have them work in shared spaces as opposite to dedicated desks. There are various indicators that can be used to measure satisfaction in this context. You can see if people tend to always book the same “shared” desk, or you can see if they work on their core business applications while sitting in some of those shared spaces. We also use subjective individual assessment, when every person can indicate their own “satisfaction grade” and then those grades are mapped against the observed collaboration patterns. This produces a good, even if somewhat indirect, measure of satisfaction.
The Harvard Business Review pegs the failure rate of mergers and acquisitions at somewhere between 70% and 90%. Could the use of OI as part of the M&A process lower that rate?
The formal definition of a merger is two organizations becoming one, which is something usually not assessed during the merger and acquisition process. There are two different cultures, and those can be measured and tracked. There are two different communities and circles of influence in the original pre-merger companies, and those also can be identified and followed as they transform after the merger event. This insight is sophisticated but, by and large, it is not impossible. I really do not know why merging organizations in most cases are not doing this. This might have little to do with organizational intelligence, but more with the fact that many of those who initiate mergers and acquisitions do not stay around long enough to be responsible for results. They simply move on to another merger project at yet another company. It is very obvious that if you can see at early stages in the M&A process how the merger of the two organizations is progressing, you can take action in many different ways in order to mitigate those eventual difficulties.
What about the issue of e-mail overload many office workers complain about? Does promptly responding to e-mail correlate with higher productivity?
Many pundits of work-life balance probably won’t like what I’m about to say, but the answer is actually yes. Productivity in knowledge work is not fundamentally different from productivity in any other work. Practice makes perfect, right? And there is also this psychological aspect: taking the challenge of tackling all that information, and being successful, makes you feel that you have achieved something important. We all like to talk about creativity in today’s work environment, but we should not forget that creativity goes hand in hand with competition. We want to be better than the others, and we want to continuously improve ourselves. In some of our measurements, we have seen that the volume of traditional information exchange with other people, such as phone calls or quick questions that you ask someone at the neighboring desk or at a coffee maker is, in fact, of the same order of magnitude as those “overloading” e-mails.
Thanks, Dr. Dobrinevski, for your prompt responses.
Serguei Dobrinevski is CEO of Hypersoft Information Systems. Under his leadership, Hypersoft has grown from a start-up founded in Berlin in 1993 into a leading technology company with unique analytic expertise across multiple industry sectors, with hundreds of clients worldwide, and with facilities in Germany, France, Poland and the US. Dr. Dobrinevski received his PhD degree in physics from the Academy of Sciences in Minsk.
Roger Smith has a background as a writer and editor for several magazines, including InformationWeek, Software Development and IT Manager’s Journal, with expertise in developing content for publication across multiple vehicles, including magazines, eBooks and blogs.