The Ossified Organization Won't 'Get' Analytics (part 1 of 3)

A recent Analytics event left me pondering if this great technology will be wasted on some firms. This three part series looks at who will/won't benefit from analytics, social media and other technology.
Written by Brian Sommer, Contributor

The Ossified Corporation will Never Get Analytics

During college, I worked for an auto parts store. All of us had to carry these little pocket notebooks where we recorded any part requests that our store couldn’t fulfill. Every day, each of us turned in these slips of paper and the data was captured. If two customers requested the same item in a month, we started stocking this item.

This technique was how a firm, back in the day, could keep its pulse on the market. It was how they gained “insights” into buyers and these insights led to changes in their product mix. It also created some particularly strong linkages between the store and certain high volume customers. I was a personal hit with VW car owners because I could find parts for them no matter how obscure some of them were.

What made this work was that the store realized that it owed its existence to being able to adjust to an ever changing market. A store stocked full of parts no one needs or wants is on a train to a slow, painful, death. A store that continues to ignore its customers and still not stock what they need is on a bullet train to bankruptcy.

So what an Ossified Corporation?

(FYI- Ossification is a process where tissue turns into bone or stone).
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You know these companies. They are champions of maintaining unwavering support for the status quo. No matter what the competition now offers or what customers want, they still deliver their same old solution.

Like me, I bet many of you have had some firms that you’ve really enjoyed doing business with. You probably liked their products, their service, their speed, etc. Something about them made you want to give them a disproportionate amount of your spend budget. Even if they never offered you anything to cement the relationship (e.g., airline frequent flyer miles), you were still driven to give them your patronage.

But, over time, something changed. These firms weren’t as competitive, enjoyable or process excellent as they once were. Their relevance was slipping but they weren’t changing. They weren’t adapting to new market, customer and competitive realities.

Some of you may have even called or written these firms to tell them what they need to do to regain relevance. But they wouldn’t or couldn’t listen. They are so rigid in their world view, their processes and business practices that they choose to ignore the very suggestions that could save their firms. They’ve not only ossified, they’ve turned deaf, too.

Calling the customer support line of these firms won’t get them to change. They can’t change because they don’t listen to customers. No, the ossified company can’t hear you as they outsourced their customer service group years ago to a third party. If you didn’t notice, they view customers as a cost and not an asset. In a nutshell, “your feedback is just not that important to us anymore”.

If you really want to get frustrated, try writing a letter to a company these days. No executive will ever read it. A clerk somewhere will glance at it, see something that kind of sounds like canned response #43b and they’re done with you. The letter will never get to someone who could do something about the suggestion you’ve raised.  How many executives in major firms have ever personally responded to a customer letter? If it ever happens in your firm, I bet it’s a once in a decade experience.

Which brings us to Analytics

I just attended a great analytics event in Chicago last week. It was well attended by people from firms like BMO Harris, DuPont, Walgreens, US Cellular and Zurich to name but a few.  Attendees and presenters alike were keenly focused on the insights that big data and big analytics could generate. Speakers presented some interesting use cases for all-new analytic applications that businesses could create.

And yet, in all of the buzz and excitement, I left there with this uneasy feeling: a lot of money will be spent pursuing these insights by companies that lack the will to change. The insights will, after much hoopla, simply litter the corporate landscape essentially unused and unappreciated.

Why do I believe this? Every day, companies already get thousands of ideas for new products, process innovations, customer interaction improvements, etc. and they fail to act on them. The rationale for this lack of movement can be:

-          That’s not the way we do things here

-          It’s a good idea but it’s just not us

-          It’s too big of an idea

-          It will be too disruptive

-          We’d have to change so many things

-          I don’t know who would be responsible for such a change

And, of course,

-          It’s not my job

So if companies don’t act on the numerous, free suggestions from current customers and suppliers, why are they so deluded into thinking that IT-generated, analytic insights will actually fare better? They’re kidding themselves.  

Simply stated, these companies have CHANGE problems that a technology-driven ANALYTIC software solution will not solve. These firms have problems changing because they lack:

-          Leadership

-          Vision

-          A continuous change capability

-          A culture that rewards risk-taking and change over risk avoidance and slavish adherence to ever-growing obsolete processes

New technology, like analytics, sentiment analysis, social media, etc. require a company be capable of change. My experience would suggest that change is a seriously unnatural act for many firms. Ask yourself, is your firm one that:

-          Took forever to embrace Apple iPhones? Are you still fighting the BYOD movement?

-          Still thinks cloud is too new to consider? Remember, Salesforce.com is 13 years old now. Even SAP and Oracle are buying cloud software solutions.

-          Prides itself in being the one, unchangeable, immovable rock in a sea of change?

Well, that last sentiment may become your firm’s undoing.

(please continue to Part II)

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