• Tuesday, July 16, 2024
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BusinessDay

The real reason organisations resist analytics

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While discussing a Harvard colleague’s world-class work on how big data and analytics can transform public sector effectiveness, I couldn’t help but ask: How many public school systems had reached out to him for advice?

His answer surprised. ‘’I can’t think of any,’’ he said. ‘’I guess some organizations are more interested in accountability than others.’’

Exactly.

Enterprise politics and culture suggest that the impact of analytics is less about measuring existing performance than creating more accountability. Managers may want to dramatically improve productivity but they’re decidedly mixed about comparably increasing their accountability. Greater accountability makes people nervous.

The evolving marriage of big data to analytics increasingly leads to a phenomenon I’d describe as ‘’accountability creep’’ – the technocratic counterpart to military ‘’mission creep.’’ The more data organizations gather and analyze, the more individuals, managers and executives become accountable for any unpleasant surprises or inefficiencies that emerge.

For example, an Asia-based supply-chain manager might discover that the inexpensive subassembly he procured leads to the most complex, time-consuming and expensive infield repairs. Of course, the engineering design and test departments should be held accountable, but more sophisticated analytics makes the cost-driven, supply-chain employee culpable as well.

This helps explain why, when working with organizations implementing big data initiatives and/or analytics, I’ve observed that the most serious obstacles tend to have less to do with technical competence than perceived professional vulnerability. The more managers learn about what analytics might mean, the more they fear that the business benefits may be overshadowed by the risk of incompetence exposed.

For at least a few organizations, this fear has led to an ‘’accountability for thee but not for me’’ mindset. Executives use analytics to impose greater accountability on their subordinates. Accountability flows up from the bottom; authority flows down from the top.

And that’s when resentments arise. The emerging cultural challenge for leadership is whether analytics-driven accountability cuts both ways.

Are business unit leaders and top executives using analytics to make themselves more transparent and accountable? Should ‘’accountability analytics’’

be internally branded as something ‘’shared’’ rather than ‘’imposed?’’

Transforming the culture and practice of analytics inherently transforms your culture and practice of accountability. The technologies associated with sophisticated analytics are increasingly well understood. The cultures and challenges of accountability are not.

 

(Michael Schrage, a research fellow at the Sloan School’s Center for Digital Business at the Massachusetts Institute of Technology, is the author of “Serious Play’’)