According to Andrew McAfee of the MIT Centre for Digital Business in an article in MIT Sloan Management Review many companies still practice decision making by Hippo. Actually he refers to it as HPPO, the Highest Paid Persons Opinion.
This resonated with me having just completed the draft for a chapter on networked decision making in our upcoming book Decision Sourcing, published by Gower.
McAfee argues that the next wave of enterprise 2.0 will see organisations make decisions in new ways. Decision making by HPPO is in sharp decline.
The book argues that the current default mechanic for organisational decision making , the hierarchy, has literally run out of steam. It’s origins are rooted in a time where capital was scarce and labour was abundant. The top of the hierarchy was probably occupied by the owner of the capital. They also had the most business experience, the most knowledge and enough life experience to co-ordinate the work of everyone else. In a knowledge based economy, these things just don’t align any more. One of the hottest jobs at the moment, that of ‘community manager’ didn’t exist five years ago. If you are managing a community manager today, you have most likely never been a community manager yourself. As a manager of a community manager you better be good at co-ordinating the work of others, the primary purpose of management because you are not adding too much in the way of domain experience.
Social Decision Making, those decisions made by Socially aligned organisations will take many more inputs, many more perspectives all helped by the automation afforded by enterprise social platforms. There will be no decision made simply because of the HiPPO. They will undoubtedly be better for it.
BI, Facebook and Decision Loops
I was at an analysts briefing event with IBM last week who were sharing their thinking on Social Business and what I believe is the inspired and innovative pairing of Connections Collaboration and Cognos Business Intelligence. IBM’s Social Business Leader for Northern Europe, Jon Mell shared a slide that compared the number of operations it takes to share a photo and gather feedback with friends on facebook and the number of operations it takes to do the same on email.
This set my mind racing. If there are efficiency gains on something simple like sharing and getting feedback on a photo, imagine the productivity gains on sharing critical business information through Business Intelligence reports.
Why do I say this? Because sharing a photo is typically a single ‘sharing loop’ process. Someone publishes the photo, others contribute with their clever and witty observations. Done.
A single loop … Count ‘em … One. (A quote from Muppet Treasure Island, btw)
The out-dated view of BI is that it is shared this way too. That it’s published and the job is done. This just doesn’t hold true any more and I am not sure it ever did. BI requires many sharing or decision loops. Ten, distinct loops to be precise but some of these are repeated which means there can often more decision loops than a bowl full of fruit loops (an all too infrequent guilty pleasure of mine)
- Meaning Loop. Gain and assign agreement on the meaning of the information
- Implication Loop. Decide if the implication is neutral or if there is a problem or opportunity
- Investigation Loop. If there is an issue then it will be rare that the one piece of business intelligence will provide the full story. This loops is about investigating the problem or opportunity is in more detail.
- Solution Loop. Determine possible solutions to exploit the problem or resolve the problem
- Decision Loop. To decide on the best possible solution
- Action Loop. Once the solution is determined it will be broken down into tasks and assigned to individuals to be actioned.
- Progress Loop. Providing feedback on the progress of the solution
- Monitoring Loop. To determine if the solution has been successful or if the group need to return to refine the tasks or redo some loops.
- Conclusion Loop. Closure. Establish agreement that that there are no further actions and that the problem or opportunity is resolved.
- Celebration Loop. Acknowledge the support and contributions of those involved
That’s ten loops which means that if sharing a photograph on Facebook is more efficient than sharing it in the office using email, the productivity benefits of doing ‘real’ business are tenfold.
There are those that are sceptical about Facebook styled social platforms in the office because they may waste time. I understand this, I really do. However, the opposite is true. Organisations need social platforms, particularly for collaborative decision making. Without them, they are wasting time.