Transparency, Change and Equality

I spent the last month or so meticulously planning my next bajillion blogs in a very structured manner and along the way realized that blogging should be a little more spontaneous otherwise I should just write a book. So I will be a little more random in the order of topics that I write about but they will still relate to my original premise. The power of information.

Many years ago a large fraction of people were paid or evaluated by piece work. You may have spent the day picking apples in an orchard and at the end of the day you received your pay based on the number of apples you picked. The harder you worked, the more you achieved. Our corporate world lost the ability to see into the labour of the individuals executing its business processes. In recent years the introducion of technology and workflow systems creates visbility.

If your objective is to improve your business processes then you must be able to measure the process at a granular level. You cannot improve what you cannot measure. If people are involved in the execution of a process then you need to be able to measure their productivity. Creating information systems that promote the execution of a particular workflow, track it at all levels and measure the result are key. Many such workflow systems exist, ERP systems, Sales Forces automation, etc. Management should know which sales person is making more cold calls than the next, they should know which programmer generates less lines of code than the average ... you get the idea. This is transparency, the ability to see a business process at work at all levels.

Whenever I have worked with clients to try to improve their business processes by providing intelligence based on careful analysis of the data created by the processes I have run into significant change management issues. We know that change is not easy, there is a whole branch 0f consulting dedicated to change management. Transparency, however, creates its own change issues. Creating information about a process, creates transparency and therefore creates accountability (i.e. if every one knew you did half the work of the person next to you, you might be held accountable in some fashion. Your peers might ostracize you, management might dock your pay or at least pass you over for raises etc. )People do not like to be measured in a transparent fashion because it forces them to be accountable on a daily basis for results or contribution delivered. In my experience, the biggest barrier to leveraging the power of information is the willingness to act. If a company wants to improve a business process it needs to "Just do it". There is no barrier to change, never has been, never will be. The fear of transparency is, I believe, a major barrier to information based business process improvement.

One way to reduce the fear associated with transparency and hence reduce the barriers to change is to level the playing field or create equality around certain information. We know that in a transaction or negotiation the party who has better information has a distinct advantage. Corporate systems are typically set up so that management has access to information that employees do not. When it comes to measuring the effectiveness of an employee's contribution to a business process we should include the contribution of all levels of management to that process. Perhaps if all levels of the corporation have equal visibility into a process and are therefore held equally accountable to the execution of a process then we may lower some of the barriers related to information based change.

So in summary, you can't change what you can't measure, creating transparency into a process allows you to measures its results, transparency creates acountability, equality in transparency for all stakeholders of a process reduces the fear associated with accountability and can remove one of the key barriers to change ... willingness to act.

These same concepts can be extended to political systems, social systems etc. not just the corporate world.

Look forward to your comments...

My Premise

I believe that information can be used to dramatically transform the world we live in today. Information can be created from systems that generate data. We can collect data about business, political, social, natural and other systems. Business leaders, politicians, environmentalists, scientists etc. try to glean information about the systems they work with so they can make intelligent decisions.

The vast majority of organizations and business today do not create good information and hence make suboptimal decisions. Information is almost solely used to support tactical decision making. How many companies would dramatically change their core profit generating operational processes based on data analysis on a regular basis? How often do governments make radical policy changes to our fundamental social programs based on data analysis? I have never in my lifetime witnessed evolutionary change to the fundamental systems that impact our lives. Decision makers are risk averse and resistant to change. The fundamental systems which impact our world have massive inertia and might change a few times in a human lifespan.

I believe the missing link to aid in decision making is a feedback loop which would allow organizations to create decision making intelligence, that is to understand which decisions work best under different system conditions or states. We need to capture every decision that is made in every organization and the information that was available at the instant the decision was made. A new class of operational systems developed on top of todays transaction processing systems will permit us to capture the human and organizational intelligence displayed by our best decision makers and committees to create knowledge.

I am not aware of a single business or organization that has evolved beyond using transaction processing and data collection. If our decision makers had access to every decision made in their organization, if they understood what the decision outcome was and had statistical analysis of the likelihood of success for all known decisions under all known system states would they not be far less risk averse? Would humanity progress faster if we were willing to make dramatic changes to our world with higher confidence?

I believe that every business can increase their bottom-line profits by 100+% within 12 months if they created good information out of their data today. I believe governments could deliver social, economic and environmental programs with a significantly smaller tax base if they created good information out of their data today. I believe we could have significant impact on our natural world if we created good infomation out of the data we collect today. This is the promise of the Information Age. We are today at the earliest stages of this evolution. If every organization and business maximized the value of their data today, poverty would decline, production would increase, decision making knowledge could cross generational boundaries, life would radically change.

Evidence of the Power of Information is growing. Regulatory changes like Basel II and Sarbanes-Oxley are proof that excellent information is not a nice to have it is a must have. Academics publishing books like Freakonomics and Super Crunchers present numerous examples of how intelligence can be created from the data our systems generate.

I hope with this blog to put forth my ideas related to this premise. I hope to discuss and debate these ideas with interested parties and in doing so advance my understanding about this topic and hopefully influence others to promote this evolutionary view of the Power of Information.