5 Ways to Blast through the Productivity “Sound Barrier”: Trading Pipes for Platforms

Pipes-Platforms

We are in an age where the vast majority of large organisations in developed economies are struggling to find ways to seriously boost productivity. The recent OECD report on the future of productivity identifies the growing gap between those super-productive organisations and the rest. They highlight ICT playing a key role in the future of productivity. The now ubiquitous “digital disruption” phrase, in the USA in particular, is providing real-life examples of the productivity boom enjoyed by successful digital platform businesses. Businesses like Ebay, Amazon, AirBnB, Uber, Facebook, Linkedin and the like have already blasted through the productivity “sound barrier” with their relatively small staff and high impact business models.  But what about those established large businesses that are often the target of these upstart platform providers? How can they match these productivity behemoths in the marketplace?

Through our organisational network analysis work we have taken hundreds of organisational x-rays of traditional organisations over the past decade or more. Many of these firms are looking to collaboration for a step change productivity boost. Organisational network analysis identifies how work is really happening, under the cloak of the formal organisation chart, by surfacing the real people to people dependencies. Importantly it identifies the true internal influencers, many of whom are invisible to formal line management. The over-riding theme that we see is the predominance of productivity silos. In essence the formal business units are collaborating intensely within their own walls, but with precious little connectivity between them. In most cases the productivity of one business unit can be totally undermined by the productivity aims of another. Regularly firm KPIs will even encourage internal competition. Its not surprising that the OECD has found that for the majority of organisations, productivity growth is stagnating. We found that when organisations leveraged their identified internal influencers, at all levels, good stuff happens, and happens fast.

Lets reflect a little on how we got here in the first place. Before the “age of the platform” the big productivity toolsets were engineering toolsets. Total Quality Management, Six Sigma, Lean Manufacturing, Business Process Management were designed to bring well-engineered systematic methods to productivity enhancement. As useful as they have been, we are now in marginal returns territory. No productivity sound barrier will even be approached by pushing these familiar themes. Where we are seeing sound barrier breaking productivity is in the world of “platforms” that facilitate human initiative to connect and produce.

Here is the crux of the problem: Compliance versus Initiative. Sangeet Paul Choudary elegantly describes this as “Pipes vs Platforms”. Traditional firms work as pipes, trying to push as much through the pipe to the customer, as cheaply as possible. This requires people to essentially “comply” with codified business processes to achieve this. Boosting productivity in the pipe means more rules and bigger, more expensive pipes. But here is the rub. The rules rarely work in all situations. The pipes regularly leak. Increasing and costly overheads are required to manage these leaks, But it’s a losing battle. So what we get is flip flopping between departments in the service centre; off spec products sitting in the warehouse with nowhere to go; continuous delays waiting for the only person who knows what to do to come back off leave; falling through the cracks is now more like toppling into the crevice.

But it doesn’t have to be like this. How is it that Buutzorg, the Dutch neighborhood nursing organisation can grow to a very profitable market dominating 7,000+ employees in 7 years, with no “pipe” style business process management in place? Indeed how have all of the successful platform companies like Uber, AirBnB, Ebay, Amazon achieved their success with scant regard for the “accepted” productivity tools mentioned? The key is that they have leveraged human initiative. They have established platforms on which individuals can leverage their own collective initiative to succeed in the work they want to do. Its not a world without rules though. The rules however are designed not for compliance to a pre-determined process, but for sustaining productive interactions in a busy digital marketplace.

But what about you; stuck in an old world bureaucratic organisation, being weighed down by increasingly onerous compliance regimes and time-wasting overheads to your main work? Should you just leave for greener pastures? One school of thought suggests that “too big to let fail” is exactly the wrong thing for governments to support; as these organisations will never be able to change sufficiently to meet the required productivity levels. But pragmatically, if 90% of the world’s firms sit in this space we need to find another way to break through that sound barrier.

Here are my recommendations for both organisations and individuals who feel trapped in that productivity wasteland:

  1. For business processes requiring human judgment, change the management style from pipe to platform i.e. remove the process rules and let people self manage.
  2. If a process can be automated with 0% chance of failure, automate aggressively.
  3. As an individual, work to be a linchpin. This does not mean to become a bottleneck, in fact the exact opposite. Be seen as the “go to” person that can get things done. Ask for forgiveness rather than permission. Once you have achieved this status, help as many others around you to do the same.
  4. Find the linchpins in your organisations and leverage them ahead of any formal processes.
  5. Finally, value relationships over processes. In the longer run breakthrough, sustainable productivity is a human centered trait.

See you on the other side of that sound barrier!

Social Physics: Oxymoron or Big ‘Social’ Data Tipping Point?

I’ve long been a fan of Sandy Pentland’s work at the MIT media lab. Pentland is perhaps best known for his ‘social tags’ used for monitoring individual human interactions to identify those interaction most associated with productive teams. When his new book “Social Physics: How Good Ideas Spread – Lessons from a New Science” coincided with the Easter holiday break, what better way to spend the break than to consume another Pentland tome? The title “Social Physics” in itself is notable as Pentland’s desire to a put a name to what he is doing, that is, identifying social interaction patterns from logged activity data. I once had a similar aspiration based on my early explorations into mapping discussion log and email data, long before even the Internet and social media/networking was around. My term was “Net Mining”, which I cheekily tried to introduce into Wikipedia, but was rightly rejected by the Wikipedia moderators as having ‘no recognised history’. Perhaps Pentland from the loftier heights of the MIT Media lab will have more success. The use of the ‘Physics’ term is an attempt to align his activities with a fundamental science, and perhaps in the future a few Pentland inspired “Social Physics Laws” that underpin our daily lives.

For some, placing the words ‘Social’ and ‘Physics’ side by side is an oxymoron only to be used in the context of sex education (but lets not go there!). An early critic of Social Physics is none other than Nicholas Carr, who famously stated a decade ago that “IT Doesn’t Matter”; has written an article in the MIT Technology Review (to add insult to injury). Carr states about Pentland “what he fails to see is that those norms and influences are themselves shaped by history, politics, and economics, not to mention power and prejudice” in referring to Pentland’s claims that social norms, behaviours and influences can be accurately modelled mathematically.

 While its hard to argue with Carr’s points here, it is fair to say that Pentland’s ‘experimental rig’ is unquestionably the most sophisticated that we have seen to date, generating copious data for measuring social interactions.  While the social tags were viewed as a little extreme when first introduced, since then, the smart phone has become a proxy social tag in Pentland’s research, which brings the practicality of his work eerily close. So even if the ‘physics’ analogy is a bit of a stretch, as Carr suggests,  perhaps the Pentland crusade could still prove the tipping point for the legions of social network analysis (SNA) academics, who have been analysing social relationship networks using mathematical methods for over 80 years now, to a point where mainstream business finally ‘gets it’.

The book essentially builds on his earlier work with social tags and effective teams. Whereas this earlier work identified the correlation between conversational interaction patterns i.e. the to and fro of dialogues had; equality (or not) of interactions used along with body language attributes identified by the social tags; this book goes a little further to claim a degree of predictive capability.  The claim to be able to infer a cause and effect, over a simple correlation observation is facilitated by the longitudinal data that the social tags and now mobile phone apps can collect. Pentland rightly points out that traditional survey based collections are mostly ‘single point in time’ (marked as ‘1’ in the graph) and therefore make it difficult to claim any cause and effect relationships from the results.

SP Graph

This graph from the book is notable in identifying where the social physics efforts exist when compared with the more traditional survey based social science studies (and our own social network analysis surveys, I might add). As much as we could be offended by being placed close to the (0,0) axis point I still feel there is a big difference in the quality of the intelligence you might gain from an astute survey question and any number of social tagging data points. But one can’t argue with the duration of observation measure. Surveys are a point in time. And pragmatically the same survey is unlikely to be repeated more frequently that on an annual basis at best. My long-term view therefore has been that they are complementary instruments, so I am happy to be a Social Physics follower at this point in time. I might add here that Pentland does not rely solely on ‘mined data’ or what he calls ‘reality modeling’. He does describe a mobile phone app they have developed to turn the device into a social tagging device, which includes surveys to capture personal feedback information as an adjunct to the logged data, reinforcing the view of their complementary usage.

The predictive models Pentland and his colleagues developed for use in predicting consumer behaviour, influencing behaviours, or citizen behaviours identified in the book are mathematically as sophisticated as traditional physics and therefore mostly out of reach to 99% of the population. But this is a necessary requirement that is often understated by ‘Big Data’ proponents. To come up with the conclusions that Pentland does, means that terabytes of data have to be filtered and analysed. This is a non-trivial task and is prone to the same erroneous conclusions that poor physics or economics can produce if not undertaken with care. Just one slight criticism here. While Pentland starts to identify some of the mathematics behind his predictive models, in the book there was scant recognition for the decades of social network quantitative analyses undertaken by many researchers around the world, with perhaps the SNA ‘Bible” by Wasserman and Faust and the UCINET software being best representative of its application.

As I worked through the chapters I became more excited by how similar Pentland’s key findings, from his sophisticated big data modelling, reinforced our own more speculative assumptions, gained from our more traditional survey driven social network analyses. The most prominent finding relates to idea flows traveling through an exploration phase, where diversity of input is a key success indicator; followed by an ‘engagement’ phase where more intense interactions are required to turn ideas into actions. These findings reinforce the concepts we introduced in our white paper ‘The Three E’s of Innovation” (Explore, Engage, Exploit) which was designed for application within traditional organisations, where specific organisational departments and individual roles might play one or more of these roles, as part of their organisational mandate. Pentland’s Explore/Engage was more generically framed, though he does acknowledge the organisational context in his work with organisations in identifying what makes great teams. In the book he makes the same plea as many of us working in the social business world, to put the formal organisational hierarchy aside and to focus on the interaction patterns. He suggests that one way of achieving this is by making such interaction patterns visible to the individuals, in the hope that by viewing their own interaction patterns, they will be more motivated to adjust their own interaction behaviours; in contrast to being coached or instructed from above. We are comforted by this suggestion as again it reinforces some of our own experiences regarding the use of network visualisations to influence behaviour change. For example, we collaborated with the University of Technology in Sydney in visualising project interdependencies to influence project manager decision-making. More recently we have been using our interactive web maps as a vehicle for prospective leaders to ‘discover’ their own better networking strategies.

For us Pentland has added the science, which reinforces our own less data intensive findings and field experiences, and therefore adds to our confidence in pursuing our networked approach to innovation.

The third reinforcement comes from the findings from activity around ideas (as assessed by the social tag information). The diversity of participants in these more open conversations was shown to characterise the exploration phase, and then the denser interaction patterns were shown to characterise the engagement phase. We had conducted some preliminary research on data collected from a Spigit implementation. Spigit is an ideas platform, which makes use of an innovative gaming engine to attract participation in a more open and transparent ideas market place. Ideas platforms largely reflect Pentland’s Exploration phase. In our research exercise we had data on ideas that had actually been accepted for implementation by management and therefore could look for patterns of interactions from the Spigit conversation platform that correlated with accepted ideas as opposed to ideas that were rejected. Our tentative findings were that the key predictors were the level of conversation activity around an idea and the diversity of participants in the conversation. Happily Pentland finds exactly the same thing from his more copious data and undoubtedly more sophisticated analyses. Again we can now move forward with this proposition with much more confidence. Thank you Sandy!

Finally the book addresses the use of social physics in planning cities. Geo-tagging is now a common feature in Smartphones,  so it becomes a relatively simple task to visualise social interactions in a geographic layout as an alternative to the common ‘force field’ layout for social networks. Thanks to Google maps, it is now possible to overlay social network connections onto geographic maps. “Location” is a common attribute used to characterise different actors in a social network in identifying the level of collaboration or otherwise between say, geographic regions. We have reported elsewhere how important co-location can be to facilitate effective knowledge sharing. We have recently also been experimenting with providing geo-mapping visualisations of social networks with this example taken a social network survey of a consulting organisation:

SP GeomapSo Oxymoron of Tipping Point? Personally I have seen many terms accused of being an oxymoron survive and proceed to a healthy existence; with ‘knowledge management’ being one notable example. We acknowledge that many a oxymoron are just a statement of aspirations, more so than a legal claim. We can live with ‘health tans’ and ‘business ethics’, so why not Social Physics? In terms of the use of big ‘social’ data for gaining new performance insights; no doubt there are many an HR professional with their carefully crafted HR Information systems shaking in their boots at the thought of a bunch of data scientists, mining data outside their formal HRIS, making them redundant. For us it is whether ‘Social Physics’ can be the tipping point between the ‘other physics analogy and that is the contrast between Newtonian thinking and Quantum thinking:

Newtonian vs quantumIs it enough to break mainstream business’s penchant for reductionist thinking; in breaking businesses down to individual processes and/or people, in favour of looking at networks as a whole?

We certainly hope so!