Thursday, October 6, 2011

Data and Behavioural Change

I'm currently being mentored by a very intelligent man. I just completed my first session with him and his wealth of knowledge is exceptional. It covers a number of sectors and most interestingly both the private and public sectors. Anyway, I digress.

The first session was on business intelligence and why its important and also how companies are currently using it. There were a number of areas that we covered but the one that stuck in my head the most is how 'introducing data into a room creates behavioral change'. Showing staff past performance data gives them a very good sense of how units have performed to date. Linking this data to future targets and performance agreements then gets the ball rolling on the behavioral change. This sounds like a good idea but there's this terrible thing called human nature and it throws a spanner in the works.

The spanner is something I like to call 'radar vision'. Its actually quite a simple concept. Every human being operates off a mental radar screen, the bleeps nearer the centre are more important than those at the periphery. In a really poorly run organisation the important ones are usually related to the manager who makes the most noise and not necessarily because it is of a higher operational or strategic importance. But that is for another blog. Occasionally things will slip off the radar screen and that's when you have failures in project delivery. When you introduce data into a room, you firmly place a bleep on the radar screen of all those present. Depending on who is present that bleep may very well begin to migrate towards the centre of the screen. This has both negative and positive consequences but I'll explain these a bit later.

By presenting the data you have either intentionally or unintentionally elevated the importance of that data. The rationale is that you're presenting it because you feel it is important and therefore all present feel that they should also see it as important. This seems fine, since you want staff (key people) to be focused to what is important to the business but the problem is that it should never be to the exclusion of other areas of the business. Lets explore this more in-depth.

A focus on reducing production cycle times places restrictions on quality and also places pressure on equipment and staff involved in production. A blind focus on cost-cutting has a similar effect on quality and that is why it should not be used in isolation. You see the problem with introducing the data to the room is that it may start to prematurely get staff focused on the wrong things/areas. Focusing on reduced times and cost-cutting are steps towards a goal that is much further away, and that is how you should be doing it.

Most companies have a vision and mission statement and strategic objectives but they've never really translated that into meaningful operational requirements. That's what they should be doing, capturing and clearly representing data that is very strongly linked to their corporate strategy. To achieve this properly my humble suggestion is that it is a combination of both internal and external data. The external data will set the stage and then the internal data shows what needs to be done to impact on the figures presented in the external data.

The link is between: Inputs, Outputs and Outcomes. The movement between inputs and outputs is governed by efficiency and the movement between outputs and outcomes is measured through effectiveness. You want all present to be focused on the outputs, if you get them focused on anything that is shorter to medium term then you will have problems. Don't get me wrong you want to give people ownership of their areas or value chains but you don't want them to lose sight of the future state you're aiming for.

So word to the wise (from the not so wise), don't introduce data into a room unless you're certain that it will create the behavioral change you're after. The two are intrinsically linked.