Professor Julian Birkinshaw, Real Time Organisational Intelligence: The Next Frontier
Professor at The London Business School and Temporall Board Member
The clock speed of the business world is increasing. New technologies are diffusing at faster rates than ever before, and product life cycles are getting shorter. Customers expect immediate responsiveness to their service needs. A problem can be picked up and broadcast worldwide in minutes through social media.
So how should your organisation respond to these trends?
Business legend Jack Welch said “if the rate of change on the outside is greater than the rate of change on the inside, the end is near.” In other words, to stay relevant you need people across your organisation to have the authority to act quickly. And you have to ensure your internal systems are providing them with the information they need to act smartly.
How are organisations shaping up to this new set of demands?
It’s a mixed story.
Many IT systems are now configured in a way that allows real-time responsiveness. For example, most airlines and hotels use dynamic pricing systems to adjust prices on a daily or hourly basis, according to changes in supply and demand. Most logistics companies provide real-time tracking services for customers. Companies are experimenting with ‘smart contracts’ that are implemented automatically when certain conditions are met, rather than waiting for human intervention.
However, as is so often the case, high-tech computer systems are changing far more rapidly than high-touch human systems. While small start-ups are generally good at hustling and responding quickly, most large firms have organisational structures and internal processes that are anything but agile. Consider your budgeting process, which likely operates on a quarterly or annual basis. Or think about individual performance evaluations, again usually done once a year. If you run an operating unit, chances are you have a weekly management meeting to update one another on what’s happening, and to address any emerging issues. The clock speed in large organisations is measured in weeks, months and years. But your customers are operating on a clock speed measured in hours and days. Which makes it hard to stay relevant.
So what’s the solution?
You need to build real-time organisational intelligence. In other words, people across the organisation have to know what’s going on, at all times, so that they can make smart decisions about how to act. This information should be multi-faceted – its about market conditions and competitor offerings, but it’s also about internal things, for example who is doing what, how are people responding to various internal initiatives, where are the hotspots (and the coldspots) in terms of energy and engagement.
An example of what real-time responsiveness looks like is an agile team. They have stand-up meetings every morning, they work in an open-plan setting, they have a board visible for all to see, showing who is working on what and where the priorities are. A fully-functioning agile team is dramatically more productive than a traditional one, and this is made possible by the amount of intelligence-sharing that goes on within it.
This logic of real-time feedback has been applied in many successful companies. For example, Carlos Brito, CEO of Anheuser Busch Inbev has spoken about the importance of open-plan offices for sharing information quickly, and gaining alignment through impromptu 2-3 minute meetings when issues arise. At Bridgewater Capital, the world’s largest hedge fund, people are encouraged to provide feedback to their colleagues in real time through a simple app. In most companies you get feedback on your performance quarterly or annually; at Bridgewater you get it every day. Its part of founder Ray Dalio’s philosophy of radical transparency: an accurate understanding of reality, he argues, is the essential foundation for producing good outcomes.
But these examples are the exception not the rule. In most organisations, people are comfortable with the slow-and-steady internal rhythm of the business – the weekly or monthly cycle of updates, and the annual budgeting process.
In my view, this is an unsustainable model. Customers are demanding a faster clock speed, and new competitors are willing and able to provide it. The benefits to sharing real-time organisational intelligence are substantial, and the technology for providing it is already well established. So what’s stopping you?
Leaders need to surface critical insights into the performance of strategy, transformation and people & culture. When done on a continual basis, this ‘organisational intelligence’ enables the design of more effective strategies, creates alignment, and delivers positive performance impact.
At Temporall, through our Workbench platform, we surface these insights using machine learning, quantitative, qualitative, sentiment, search, entity, tagging, and organisational network analysis from across a company. This allows us and our Partners to provide leadership teams with analytics, dashboards and reporting that collectively deliver critical business impact and performance gains.
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