How Tough Will Analytics Be in Ossified Firms? (Part 2 of 3)

Part 2 of 3 - How tough will it be to get value out of analytics? For some firms, it will be grim. Great insights are only going to be helpful to firms that can change.
Written by Brian Sommer, Contributor


How bad is the ossification?

For some firms, their inability to detect a change in the market and then to adapt around it are crippling. The business landscape is full of these firms. Video rental firms, banks, big box electronic retailers and airlines are some of the poster children for this phenomenon.  

Can’t you imagine the conversations that should have occurred at these firms? Shouldn’t the management of a big box electronics retailer been asking themselves:

  • Will the credit tightening of 2008 and beyond hurt our ability to sell huge televisions to people with poor credit?
  • Will Apple’s iTunes e-store cause us to experience a decline in walk-in traffic as people will download (not buy) CDs and DVDs?
  • Ditto for film rental kiosks?
  • What will get people to come into our stores?
  • Do we have too many stores? Stores that are too big? Too many physical vs. electronic stores?
  • Etc.

I came up with that list in an instant. Is an Analytic app needed for this? Not really. We all know the issues. An application might do two things:

  • Provide early, greater clarity to the problem
  • Point to potential solutions

But, I’m not convinced that an application will prevent bankruptcies, business failures, etc.  No. Knowledge of a problem is not the same as solving the problem. Each requires a distinct skill set and knowledge base.

You see data cannot be confused with strong business leadership.  Leadership that is committed to change. Or, like my former boss George Shaheen at Andersen Consulting (now Accenture) used to say, “We have to have the courage to change in spite of our success”. How many executives are really willing to commit to that level of change? Too few, I suspect.

Let’s look at two kinds of organizations: those in process of ossifying and those already there.

The in-process ossifying entity is usually a firm that is no longer in-sync with the modern world. They’re caught in a time warp. The business world has passed them by and instead of changing with it, they’ve chosen to fight the change.
Amsterdam February 18 2012 122
Stuck in a time warp? Copyright 2012 - TechVentive,Inc.

The ossifying company has no process for incorporating external suggestions into their work processes. Communications are almost always rote, predictable and unchanging (same for their processes, too). The past is idolized in these firms. A process that worked well in 1972 is viewed in almost religious tones with any hint of change being akin to blasphemy.

The culture of these firms is decidedly intolerant of change. People who advocate change to the status quo are shot. If you want to get promoted in these firms, don’t rock the boat. No, you must stay the course and not make waves to get ahead.

A more disheartening cultural insight is that employees don’t care about their firm or your input. They aren’t encouraged to experiment. They are not asked for their opinions. They aren’t given time to interact with customers or suppliers (or upper management). They don’t know who they’d take a suggestion to anyway. They know they are expected to be good worker drones and to leave the big, insightful thinking to top management.

Some firms that are ossifying are actually using newer technology but it will not stave off their irrelevance. Take the way many companies use social technologies. These are often used to monitor point customer service issues as the issue is unfolding. Airlines, for example, watch social media to stop a small, localized problem from becoming a viral PR problem. But, try to contact an airline on your own and you’ll quickly learn that they don’t want your suggestions. 

One major air carrier I’ve used a lot really couldn’t care about feedback. If you have a problem with baggage, gate operations, ticketing or anything else they have at O’Hare, don’t even bother to ask to speak with the person in charge of that department while you’re at the airport. The employees are instructed to deny this access. Instead, you must write a letter to their customer service group in Dallas where it can get ignored for up to a year.

Likewise, don’t bother posting anything about this carrier in a social media site, I’ve mentioned this firm several times in this blog and I can’t even get a pulse from them.

I have wanted this carrier to be relevant and successful again. I’ve sent them suggestions. I’ve taken time to speak with their front-line workers. And, no one takes notes. No one commits to changing anything. Except, they all seem committed (or resigned) to letting the firm fail altogether. Sadly, I think they’ll succeed.

And, then, there’s the corporation whose ossification has been completed. They’ve been turned to an impermeable stone-like form that cannot ever change. These firms:

  • Can be bureaucracies. No bureaucracy will ever need an analytic app as their process maps contains all the knowledge they will ever need. Who needs insights when you have a 3,098 page procedure manual!
  • Don’t respond to customer mail/correspondence at all. These firms don’t worry about their current customers as they mistakenly believe there is an infinite supply of net new customers who always want their out-of-date, sub-par and growingly irrelevant offerings.
  • Change as frequently as the tectonic plates move. Progress in these firms is measured in eras (i.e., the last time we changed the production work flow was in the Mesozoic Era).
  • Are ripe for a takeover by a private-equity or vulture capitalist firm.

So, forget using newer technology to get your ossifying firm out of the ditch. It won’t help. Your problems are bigger and different than what an analytic tool will solve. You’ve got leadership, rewards, vision, change and other issues you’ll need to address before those insights from those analytic applications can be implemented.

(please continue to Part III)

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