Class notes - weeks thirteen and fourteen, Spring 2018
It’s part of human nature to occasionally get worked up about something and then feel a bit silly about it later. Last week’s post makes me chuckle a little already, and that’s okay. The past week has been wonderful and I’m feeling inspired.
Table of contents
The trip to New Orleans for the NTC was a blast. Autumn and I had about triple the size audience as last time for our IT planning and budgeting session, they were engaged and a great discussion was had. Best of all there seemed to be some genuine enthusiasm for the templates and resources. Releasing them free to the world was the real purpose of the session and hearing others say they’ll use them makes me happy.
New Orleans was so much fun that I almost had to stay a couple extra days. Alas, I left early instead. A freak blizzard that blew into Minneapolis the same night as my flight home ended up shutting down the airport for a couple of days. I changed to an earlier flight and managed to get home in time to help shovel out from under two feet of snow. And watch my kid’s joy diving around in it.
The past two IDSC class sessions have shown me another side to the business school. For one, I haven’t heard the word headcount in two weeks, and that’s refreshing. Beyond just that, the lessons have centered on human capital. The professor has emphasized the ways in which organizations that can engage and inspire the people within them gain a competitive advantage. And it seems like this may be something that the broader business world hasn’t totally caught on to yet. In truth, there are plenty of nonprofit organizations whose leaders are just as clueless. And there’s often a mismatch between what we idealize in class, or in company proclamations, and how engagd we can be in our day-to-day work. Meanwhile the world keeps changing rapidly. Some wise words I heard at the NTC, “organizations that will be successful 10 years from now will be the ones that develop technology proficiency across the organization to meet their mission.” I suspect that something similar is true for corporations, both in regard to technology proficiency and in regard to being mission driven.
Notes from IDSC
IDSC, Week 13
- Oftentimes, IT gets involved in these big company-wide initiatives because IT is the only unit that’s talking and working with everyone already.
- Short term versus the long term is the real problem in organizational transformation.
- The problem is change management, and how to prioritize it
- When thinking about enterprise IT, the complements need to be in place before rolling out the technology
- Governance is not necessarily just for IT. Any cross-business process change effort requires governance
- IT has to lead and form the foundation to make these commonalities happen. IT is critical to enabling them but the actual efforts are not about IT.
- Transformation efforts fail when change management fails
- Stages of leading change:
- Establish a sense of urgency
- Form a guiding coalition
- Create a vision
- Communicate the vision
- Happens all the time, what you think of as an IT project is actually a complicated business process project.
- IT can only make projects fail, if the technology is bad. But IT also can’t make a project succeed. Success needs to be driven by change management on the business side
- You’ve got to have a high level long term vision and a plan to execute on that vision, but in real life you also have to be flexible and work within the realities of your situation
- The sources of value for organizations has moved from being economies of scale to where the true value creating activity in firms is the knowledge work
- Basis of value creation: Economies of Scale → Economies of Scope → Economies of Knowledge
- What do firms need to do to truly leverage the human capital assets that matter
- Broader value to take out of the session is that now that we have all of these types of technologies - fast forward into a time where all companies have implemented their basic systems - what at that point creates competitive advantage and value? It’s the human capital in the organization and how you manage it.
- Enterprise governance is a technocratic idea - a rule is fair if imposed uniformly
- Technocracies take diverse institutions and make them more alike by imposing similar rules
- Technocracies do not defer to local knowledge
- In a lot of the governance literature our notion of governance is that everyone is the same and we’re going to manage the organization in a single way from a central dashboard
- Opposing view - the ecosystem view
- Complex array of organisms
- Pursues diverse missions
- Often what we’re doing is undervaluing what may be truly unique across the organization
- The environment doesn’t stay still, changes continuously
- Over time, what actually drives performance in organizations changes
- How to manage the flexibility is a very complicated issue
- Given that the world is changing, need to think beyond modes of one-size-fits-all
- We can achieve value through standard processes, or we can achieve them through linkages between people in the organizations
- Once you have a standardized operational infrastructure in place, people can work together within companies in flexible ways to produce maximum efficiencies and value.
- To achieve this horizontal integration, need these three pieces:
- Intellectual integration
- Social integration
- Emotional integration
- Once you put large enterprise systems in place, they can constrain action
- We react very differently to feedback that comes laterally as opposed to that which comes from above
- Is there a way to have organizations that truly tap the power of the human being? Can we design organizations that engage and inspire the people within them?
- The real lesson from Threadless comes down to what kind of organizations do we want to build when our true asset is leveraging human capital?
- Most important piece in this is it talks of a world in which you have the central piece in place (the standardized technological infrastructure). After you have that you have collective bonds of performance
- Why would they do it? Because they have a common sense of purpose and identity. Benefits will not accrue without that latter piece
- corporations become soulless when they implement systems which effectively eliminate all human choice.
- You can have organizations which design systems that truly value people - see fast company article on Engines of Democracy
- We have come to a point where you can put governance in place in organizations very streamlined organizations. But it’s all of the unprogrammed tasks which happen around those systems which benefit from strengthened bonds of human interaction
IDSC, Week 14
- One of the most important background thoughts to have while discussing big data is, how can this impact your business, what does it mean to your firm?
- Gaming industry was one of the earliest to pick this up
- When you have a lot of historical data, provides you with a basis for understanding the system
- If you don’t have historical data available, there are ways to generate data for analysis purposes
- There’s a systematic way to do some testing and come out with actionable insights
- It’s good to have insights, it’s more important to have actionable insights
- At the end of the day it can result in a final measure (increased sales) or an intermediate measure (customer satisfaction)
- This is reasonably new, using data to make decisions has come about in the past decade
- The whole point of database decisions is to use operational data
- If you have a whole bunch of data you can figure out if there’s a relationship between customer traits and response to an offer
- Companies have all this data, but most don’t have the capabilities to use it.
- Your ability to use a lot of the data hinges on your ability to combine data across the organization. When data is fragmented it’s much harder to combine and make sense of.
- The trend toward data based decision making has pushed people to think about implementing standardized systems across an organization
- One of the common applications is to create common classes as a way of categorizing customer segments
- Sequential patterns are another method. For example, a hardware store marketing a step ladder to someone who’s purchased paint and rollers
- Algorithm defined as a formula that relates all of your inputs to your outputs
- Algorithms are never perfect
- Data mining is about taking all of this data and running algorithms to keep getting more accurate in ability to predict outcomes
- The ability to do this is very powerful, but the skills to be able to do it are not aligned with the domain knowledge
- Many organizations have created a separate data science group, which is the group doing a lot of this in organizations. Problematic because its too often not part-and-parcel of the business decision making
- Sometimes this gets political. Runs into hurdles of different kinds. The problem with getting to the new usual is the old usual
- Inevitable that in some cases the tail will wag the dog. Potential for a feedback loop that reinforces and validates the result
- Algorithms need managers too, and that’s increasingly the job of those in management
- Sometimes you’ll learn from the algorithm, and sometimes you’ll tweak the algorithm to train it better
- It works within a certain boundary, but humans have a much better handle on the points of fragility and figuring out where the models will break down
- Adversity breeds innovativeness
- Harrah’s case - uses data points to manage the customer experience, now happens in real time
- Any business can do this. Figure out a customer’s pain point and find ways to make them feel better about bad experiences
- It is the result of a complex chain of interlocked pieces. It works as a system - the technology, organizational systems, and mechanisms
- The process of converting data into value is a lot more than just implementing an algorithm
- There’s a constant ongoing experiment happening in which companies are learning how to create maximum customer satisfaction at the lowest cost
- It’s not enough to just build a data science team. It’s about building a system of value.
- Data is powerful but there are some layers in creating the value
- Data by itself is no longer a source of competitive advantage. It is a huge advantage in the context of human capital and business strategies that effectively leverage smart people who manage to work together and collaborate.
Notes from MGNPO
MGNPO, Week 13
Did not attend due to travel, these notes are from a classmate
- Previously a blurring of the sectors (business, govt., nonprofit)
- Recently (now) a marriage of the sectors
- Where will the sector be in the future? - 4th sector
- New Public Management approach
- Market-based initiatives
- Contracting out services to nonprofit organizations
- Reliance on policy tools
- What are some partnerships across sectors?
- What are opportunities?
- Need people from all different backgrounds/philosophies/strengths
- Will we (as nonprofits) be able to take our innovation and partner with other sectors?
- Some natural - some forced partnership
- Funders often require partnership
- Networks - Who would you partner with?
- Organizations as a network
- Medical/insurance (in/out of network)
- Institutional/organizational theory
- Combine/hybrid mission
- Symbolic - “I thought you were about this, not that.”
- Can confuse the public
- Does there need to be a new model?
MNGPO, Week 14
- How have nonprofits that you know influenced policy?
- Types of relationships between nonprofit and government:
- Supplementary - nonprofit provides services that government doesn’t
- Complimentary - work in tandem to address issues
- Adversarial - nonprofit and government are at odds
- In policy advocacy, if you can help give people their own voice that’s more authentic and carries more weight than trying to speak for them
- Role of power in nonprofits, important to remember that organizations exist in a complex web of relationships of power. They simultaneously exercise power and are also subjected to it.
- As a sector, instead of staying in our lanes we sometimes need to take a generative approach to exploring hybridity and figuring out how to work together to work toward the common good.
- Discussion: if all three sectors approached an issue, what would it look like and what would it take to happen?