Tim O'Reilly asks, Do employees know what they need to know?

Tim O’Reilly is well known as a publisher, a venture capitalist, and a technology evangelist. His ability to clearly explain the significance of evolving web technologies on our organizations, our markets, and our governments led us to seek out his thoughts on the way that these changes affect management. We've invited him to become our newest Maverick at the Management Innovation eXchange.

In his most recent conversation with us, Tim talks about how decision making is shifting from the center  -- where we usually find it in a traditional command-and-control organization – out to the edges.  We’ve read about this before, perhaps most notably in the writings of John Hagel and John Seeley Brown, Jr., who talk about the intelligence at the edge of organizations and how to make best use of them to keep organizations nimble and evolving. Our conversation with Tim built on that idea and explained why that shift of authority should be coupled with an ability to measure the impact of decisions, to understand the feedback, and to revise action based on what the data is telling those edge decision makers.  In other words, shifting decision making from a central boss to a loose network of modules isn’t about abandoning focus or telling every line employee to go with their gut. It’s about empowering people on the front lines to seek out and understand the data that measures their group’s performance.

Amazon, Tim said, relies on cells of employees responsible for certain “fitness functions” – performance metrics that support the larger organization’s core mission. At Amazon, these teams have the authority to make decisions to meet their goals – to move some measure “up and to the right” as Tim says – even when that impacts another team’s efforts. In Tim’s example, a team responsible for customer service suspended sales on a product that was being packaged poorly and incurring many complaints and returns. “One of the things Amazon did was, it empowered the customer service people to pull a product from the catalog because it’s making their number go bad.” At that point, it was in the sales team’s interest to improve the packaging techniques. “You find out very quickly what’s wrong, as opposed to the old command-and-control organization where a report gets filed.”

Shipping books and furniture is one thing; health care seems another realm entirely, where decisions have life-and-death impact. While there’s undoubtedly art to medicine and all patient care, one of the paradoxes of the current healthcare environment is that we often know what works but fail to do it. Frontline health workers like nurses may buckle at being told how to treat a recovering patient, right down to the degree of inclination they should rest at. But give them the tools to measure recovery and the access to data on patient recovery and they become the decision makers who put in place the right procedures to meet a hospital’s performance goals. Tim described one example where the hospital installed protractors on hospital beds so nurses could accurately position patients at the best possible angle for recovery.

What does this mean for managers? First, it must be a good leader’s job to help define success. What goals are the teams trying to achieve and how should they be measured? Once those parameters are clear, a manager’s role may be to support the teams by occasionally mediating between them or helping to revise goals and metrics when the team’s data is telling them something they didn’t expect.

The harder change is probably for the employees. In a data-driven world, everyone has to get smarter about numbers and the way they reveal failures and successes, opportunities and problems. This is something many of us have been shielded from in our careers. When I think about my own experience as an editor, I know that I’ve often been content to let others crunch the numbers – the teams in advertising, or sales, or traffic. But increasingly the tools to measure and analyze our performance – especially in a web environment – are widely available, often from third parties, and usually easily understand with a small investment of time climbing the learning curve.  And certainly as organizations become leaner, we all must hew closer to the numbers.

Grasping the data, is of course just the table stakes at this point. The real differentiator for employees and their organizations comes from innovating based on what you’re learning from the feedback. It may be the leader’s job to define the fitness function. But undoubtedly since this is your number and you’re closer to the ground, you’re going to see things first. You’re the one who will realize and spot new trends, and this is likely the team that will come up with new ways to act based on what’s been observed. It’s then your job to sell that to the manager – and armed with data, you’re better prepared to make the case.
 
 
What is the function that your group measures and manages within the larger organization? Do you understand how success of your fitness function drives the larger success of the organization? Do you feel empowered with the data necessary to monitor and move the needle?