Harvard Business Publishing

A few months back I wrote about micro-decisions and how they can add up to macro money. But as a student of decision-making I would be remiss if I didn't point out that one big decision — who will own an organization — has a massive effect on performance, culture, and organizational effectiveness. I'm prompted to post on this topic because of two contrasting experiences of late. One is that I've been doing some research on private equity and what a bloody mess it has made of many of the companies it has taken over. The other is a recent visit to SAS, the privately-held company that dominates the market for analytical software. Private equity is in shambles now, and deservedly so. Deals are down 96% from their peak. The "industry" has run several pretty good companies into the ground, including Mervyn's, Linens 'n Things, Steve & Barry's, Station Casinos,... Keep Reading »

The proponents of 2.0 thinking on user-generated content, be they fans of Web 2.0, Enterprise 2.0, Health 2.0, or Rhubarb 2.0, would have us believe that their highly participative approach is the only one that works. And indeed, there is an appeal in democratizing content creation and management. However, in almost every case there is also value in professional involvement. Take health care, for example. A couple of months ago there was a conference in Boston (I was unable to attend) on "Health 2.0 meets Ix." For those unfamiliar with this debate, Health 2.0 fans advocate patients taking control of their own health care and sharing information across patient communities, rather than turning it over to professionals. "Ix" refers to "information therapy," which is shorthand for the scientific/medical establishment's 1.0 use of research, clinical trials, and licensed practitioners to fight disease. If you were sick, would you rely on Health... Keep Reading »

I can't tell you how many companies I have worked with that have encouraged or tolerated a large degree of geographic dispersal among employees and management teams. "We're virtual, and proud of it," one told me. "It doesn't matter where you live anymore," many employees of virtualized companies have argued. "We travel all the time anyway," has been another frequent mantra. But I recently encountered a company that is moving the other way. Eclipsys makes software for healthcare providers. The company's headquarters is in Atlanta. Last week, it changed CEOs. The previous CEO, Andrew Eckert, lived in Silicon Valley. By all accounts, he did a good job in the role, and the company has been doing well. However, the board of directors felt that the company couldn't be managed successfully from afar, and held discussions with Eckert about moving to Atlanta. He was committed for both family and career reasons... Keep Reading »

You may recall the brief run of publicity for a new role in Washington called the Chief Performance Officer. President Obama planned to nominate Nancy Killefer, a McKinsey consultant, to this position, but some tax issues led her to withdraw her nomination. A few weeks ago Obama nominated Jeffrey Zients, another consultant and Washington business executive, for the role. I don't know Zients, but I think the Chief Performance Officer role has a lot of potential, and it's a new wrinkle for something like this to appear first in the federal government. A little background behind the appeal of this idea: for several years at Babson we've run a couple of sponsored research programs — one involving knowledge management and one based on process management. I've had a long-term interest in both topics, but each is limited as an approach to business performance improvement. We had a meeting last week... Keep Reading »

I was fascinated by a recent article in the Boston Globe about the factors behind its own impending demise. The article revealed that in 1995 Jeff Taylor, the founder of Monster.com, approached the Globe with an offer to collaborate on online job advertising, and for the Globe to invest in Monster. Needless to say, the Globe's owners (then a different Taylor family) turned Jeff Taylor down. Also needless to say, the Globe has suffered greatly from the loss of classified job advertising that was at one point its annual $100 million cash cow. Most of those fish have now moved to online fishing grounds, including Monster. Granted, it was 1995 and the Internet was just emerging as a disruptive force. However, I suspect that Monster's ability to search across jobs and match jobs to applicants was apparent even then. The story suggests that it's extremely difficult to embrace threats to... Keep Reading »

Okay, it's fun to tweak Twitter and the Twitterati, as I did in my last post, and it's great that such remarks bring out so many commenters. This week, however, I'm writing about a topic that is much more important to us all — even if you think Twitter is the greatest thing since CB radio. The topic for today is how financial services organizations will handle complex analytical decisions in the future. Why is this topic more important than trillions of tweets? You may recall that it has recently almost destroyed our financial system and our economy. How our financial institutions made decisions about their operations and customers is at the heart of the financial crisis we're in. Managers of these institutions entrusted decisions to analytical models they didn't understand. Regulators allowed banks, rating agencies, and nonbank financial firms to make millions of bad decisions. Financial innovation led to... Keep Reading »

A few months ago I was speaking at a marketing conference, and after I spoke on marketing analytics, there was a panel on social media. Larry Weber, who started and then sold a very successful PR firm (and who is on Babson's Board of Trustees), was asked whether there was a role for analytics in social media. "Frankly, I'm tired of analytics," he said. "I got into social media in part to get away from analytics." Well, honesty is good, but I didn't see then — and don't now — how you can do serious marketing through any medium without metrics and analysis. Twitter and other social media may be fun, but are they really serious marketing tools? I thought of this again recently while grading some of my MBA students' papers about an IT strategy for Welch's, the grape juice people. A couple of the student groups suggested that... Keep Reading »

One of the common approaches to dealing with this recession is for companies to ask — well, tell — employees to take time off without pay, a day every week or two. This 10 or 20% haircut is supposed to indicate that "we're all in this together," and that it's better for everyone to suffer a little than to lay some people off. While I have some sympathies with this philosophy, I'm not sure it's either fair or wise. On the issue of fairness, if such a policy had been instituted in 1969, it might have been very fair. But in 2009 there is much less of a relationship between hours on the clock and work actually done, at least for knowledge workers. How many of you reading this post actually work only 40 hours a week? How many of you only work on official workdays? Today, most people have... Keep Reading »

When companies or pundits talk about decisions, it's easy to get focused on the major ones made by senior executives. It's true that big decisions around restructurings, mergers or acquisitions, and strategy can create or destroy a lot of value. However, those decisions don't typically happen very often, and they are not always amenable to improvement. The senior managers who make them, for example, may not want you mucking around in their decision processes. What many companies don't realize is that microdecisions — small decisions made many times by many workers at the customer interface — can have a major impact on the business. How they are made can be the difference between sloppy and effective execution, and between profit and loss. If you can identify a few key microdecisions that can be addressed and improved, you can often dramatically improve performance. What are some examples of important microdecisions? It... Keep Reading »

Michael Lewis has done it again. In an article in last Sunday's NY Times, the Moneyball author applied his considerable writing skill to describing the penetration of analytics into basketball. As in his baseball bestseller, where he focused on the Oakland A's, the article  focuses on particular players (Shane Battier of the Houston Rockets) and managers (Daryl Morey of the Rockets) to show how a scientific approach is changing the game. Lewis didn't go into the details of basketball analytics (for that see, for example, 82games.com), but he does illustrate how a few leading individuals can change how a major sport is viewed and pursued. If you don't care about professional basketball, is there any reason why you should care about the use of analytics in it? Yes -- because analytics in sports catches on and spreads in a similar fashion to business. Also, basketball is more like business than... Keep Reading »