Marina Gorbis's Blog, page 1355

Help Reluctant Employees Put Analytic Tools to Work

Bringing advanced analytic tools into your organization can help you clone your best decision makers so that you get better, faster decisions in every situation that requires human judgment. But you may have to revamp your decision processes to make the tools work smoothly. And you will certainly have to confront that pesky human factor: people’s natural reluctance to adopt new ways of doing things.

Companies that are most successful at getting employees to use the new tools seem to rely on a three-faceted approach:

They co-create analytics-based solutions

People often fear analytic tools because they don’t understand what’s inside the “black box” or why it’s important. So some companies have learned to involve employees who will be affected by the new tools in designing and refining the tools’ applications.

A property-and-casualty insurance company, for instance, knew that business customers who invested in risk management were longer tenured and more profitable than others. So it naturally wanted to know which prospects in its database would be most likely to implement safety recommendations. It began creating a predictive analytic model — but what were the right variables to use?

The company ran a series of workshops involving salespeople, claims adjusters, site-inspection engineers — anyone who might have a point of view on the issue. Participants came up with idea after idea that the analytics designers might never have thought of: whether the prospect had favorable employee ratings, what percentage of its management team held technical degrees, whether the company had a senior risk-management executive, whether it invested to protect its brand’s reputation, and others.

The analytics folks tested many of the group’s hypotheses and eventually rank-ordered the variables; they also kept asking workshop participants whether the results and rankings made sense in light of experience. Eventually, participants became convinced that the model outputs matched their experience and intuition. Involved from the outset, they became advocates of the new tool throughout the organization.

They involve marketing in the rollout.

The tech-savvy experts who create and introduce analytic tools aren’t necessarily the best people to tell everyone why the tools are important. Social and communications skills, after all, don’t always go hand in hand with an advanced engineering degree. Marketers, however, are professional communicators — which is precisely why many companies rely on their marketing departments to develop a rollout plan for analytic tools.

At one company, many employees were concerned about the privacy implications of tools relating to collections. Wouldn’t customers feel annoyed that the company had so much data about them and was using it to customize the collections process? In introducing the tools, marketers emphasized that the tools made life better for everybody, agents and customers alike. If high-value, high likelihood-to-pay customers got special white-glove treatment, for instance, they would be happier than if faced with a one-size-fits-all collections protocol.

They make a game out of it.

One company wanted to introduce a new predictive tool to help its sales representatives identify promising prospects. But it was afraid the reps would never use it. So executives identified a unit that was far behind plan, where the reps were unlikely to earn their bonus.

It gave this unit the tool first, saying, in effect, “Try this. It might help.” The reps, desperate for anything that might help, eagerly tried the new tool. When they discovered its power — and saw their unit’s results improving — they began talking it up to their colleagues in other units. Before long, every sales agent in the company was clamoring for it.

Every tool and every introduction is, of course, different. Early in the process, you will want to assess the specific risks you are likely to encounter. But these three approaches have helped many once-skeptical people overcome their reluctance to put today’s analytic tools to work.

How Retailers Are Transforming the Shopping Experience

How separate or integrated are your physical and digital operations?

In the early days of the online revolution, some executives ignored the digital world, viewing it as a passing fad. Then, once it became clear the Internet was here to stay, some companies flipped and focused solely on digital, ignoring brick-and-mortar stores.

In September 2014’s Harvard Business Review, Bain’s Darrell Rigby says that both of those positions are misguided. Companies need to fuse digital and physical experiences, says Rigby, to allow customers to move easily between the two. Yet few companies are providing this seamless customer experience. Many still run their physical and digital operations separately, creating disconnects that frustrate customers. This has particular implications for retail and how we shop.

In this interactive HBR webinar, Rigby explores the future of retail and shares five best practices about digital-physical mashups discovered from global leaders in 20 industries. These five rules will help you reconceive your business, create a sustainable competitive advantage, and drive growth.

When Your Company Has a Problem It Can’t Ignore

Did you notice how quickly the Ray Rice story turned into the Roger Goodell story? For those who need a refresher, Rice is the Baltimore Ravens star running back who was caught on video last April punching his (then) fiancée, Janay Palmer, and then dragging her, unconscious, out of an elevator. After the video went viral, the world waited for how the National Football League would respond. All eyes were on Goodell, the Commissioner of the NFL, to step up, assert the League’s values, and provide the leadership needed. What followed wasn’t pretty. As one indicator of how well the NFL’s reaction was received, Saturday Night Live made it the subject of its opening skit of the season.

Since then, other NFL players have been arrested on allegations of domestic assault and child abuse. People are calling for nothing less than a wholesale cultural change across the League. The fans that the multi-billion dollar football machine depends on are suddenly having to defend their loyalty, and some are deciding they can’t. It is clear that the NFL is in turmoil, and Goodell as its leader stands in the center of the storm.

Talk about an unignorable moment. This is exactly the kind of cultural crunch point we’ve focused on in our research – when the temptation is strong to downplay the situation, but the penalties for doing so can be extreme.

Unignorable moments don’t only happen for organizations and stars that live in the spotlight; there are critical times in the life of every organization when it faces challenges that cannot be sidestepped. Sometimes the crisis is months, or even years, in the making – but when it explodes, it does so spectacularly. An unignorable moment signals that at some profound level, the culture of an organization – that is, people’s tacit, shared understanding of “the way we do things around here” – must be addressed. It is running up against the reality of a changing world, and cracking. When culture is challenged in this way, and people start questioning what their organization stands for, things can go either of two ways. There can be organizational paralysis, or a release of incredible and productive energy, and which of the two happens depends mainly on leadership.

How do you know when you’re facing an unignorable moment? While no two look exactly the same, they all share four characteristics:

They are public. What “public” means varies depending on the organization. Usually, news of an unignorable moment spreads like wildfire inside the bounds of the organization, but doesn’t ignite much interest outside. Indeed, in a family business, an unignorable moment may never be known outside the immediate family, although it impacts the whole company. Sometimes, however, the unignorable moment captures the attention of outside colleagues, partners, suppliers, investors, or even the general public. This was of course the case when the Rice video was leaked to the press, or, in another example, when reports broke that at least 35 veterans died while waiting for care at a VA hospital in Phoenix, Arizona. Public interest grows, of course, when members of the public are affected by a company’s decisions.

They are irreversible. When an unignorable moment occurs, it’s clear that things will not be going back to the way they were. The NFL can’t unring the bell that made its 2014-2015 season into a discourse about domestic violence – or stop other bells from chiming about violence on and off the field. The enterprise now has to make its way in a changed world.

They are systemic. Unignorable moments are not just about the behavior of the individuals involved, although they often figure prominently in the story. These moments are about larger systems of roles, beliefs, behaviors, and history. Rice, Adrian Peterson, Jonathan Dwyer, and other players feature prominently as individuals in the NFL’s moment, but most of the conversation focuses on the more general injustice of star players getting away with behaviors that would put others in jail — and, at the same time, with the plight of players suffering from brain injuries coming to light, on the cultural agreement around what counts as hard-hitting football. The NFL’s history of success is built on that agreement, passed down intergenerationally from the time kids get their first pair of shoulder pads.

They challenge identity. An unignorable moment calls into question the identity of the entire organization and raises upsetting questions: Who are we? Why do we do the work we do? Will I have to change my behavior? Consider the soul-searching that must have gone on at Merck in 2004 when its management finally made the decision to remove Vioxx from the market. It was a moment that came too late, ignored in 2000 when early reports on Vioxx showed that use of the painkiller carried serious, sometimes fatal, health risks. The delay left the company facing billions in lawsuits and with a damaged reputation to repair.

All this brings us to the one aspect of the ignorable moment that is, for a strong leader, positive and priceless. It is so dramatic and disruptive that it demands the attention of the entire organization. Thus, good leaders recognize unignorable moments as opportunities to have unprecedented influence. The way they handle them can change the course of their organizations’ futures – as well as determine their own legacies.

By very publicly recalling over 39 million cars this year amid a scandal over a known safety defect, GM’s Mary Barra seized the chance to send a signal that would be heard not only by customers but throughout her own organization. As painful as it must have been on many levels, the recall scandal might pay vast long-term benefits by bringing a greater sense of accountability to the managerial ranks (although the fact that GM’s stock price didn’t suffer raises questions about whether the culture will really get the wake-up call).

A lot still depends on the leadership abilities of Barra and her top team. While she has said that she hates the word culture, she thinks a lot about “who we are and how we behave with each other at work.” Clearly, this moment is Barra’s best shot to instill a deeper commitment to quality and safety (one that encourages the very openness and criticism that have been discouraged for so long) – and if she chose not to take it, that choice would push the organization even further into its existing cultural ruts.

Having watched Goodell and the NFL in the past several weeks, Nike and some other companies are ending their endorsement deals with players accused of domestic violence. Some sponsors, like Radisson, are discontinuing their sponsorships of some professional teams. NFL sponsors, such as Anheuser-Busch and PepsiCo, have publicly criticized the league, raising the possibility some might defect.

But from where we sit, the moment is still in play, and it is not too late for Goodell to turn things around. He has begun to reach out to domestic violence organizations, saying that he wants to learn from others how to address the systemic, cultural problems he and the NFL face. It will take much more to show the world the NFL is shifting from defense to offense, and ending its relationship with domestic abusers. Goodell is more likely to make the right decisions if he recognizes that this is a defining moment, and it won’t be ignored.

Great Strategy Begins with a CEO on the Frontlines

Building a winning strategy begins with recognizing that strategy is too important to be delegated to a strategy department. It can certainly be valuable to have the help of strategy officers or teams on refining and implementing strategy, but the strategy itself needs to be conceived and owned by the CEO (or equivalent for a division). Otherwise, strategy often becomes a diffuse product of group thinking and compromises among multiple stakeholders in the organization.

It follows that the CEO must deeply understand customer needs and how to meet them. Yet it is dangerous to depend on this information flowing up through multiple layers in the organization. The transmission of customer knowledge through multiple layers often causes distortion and risks the addition of personal agendas, or ”managing upward,” with people telling the CEO what they think he wants to hear.

That’s why it is essential for the CEO to cut through the corporate clutter and reach out to the colleagues who are closest to the customers: the frontline sales people and their direct managers. By using these colleagues as a window into customer needs and expectations, asking their advice, and leveraging them to validate strategic choices, the CEO can get the insights he needs, from those who know best — an approach we learned from Fred Hassan, our mutual mentor and a serial CEO (see the HBR interview with him and his follow-up article on the topic.)

Here are two examples of how that dynamic worked and the lessons learned from our own experience:

At Schering-Plough, where Brent led the Consumer Healthcare division and Ken led strategic affairs, we needed to energize the somewhat sleepy realm of Dr. Scholl’s foot care. Brent’s team hypothesized that a line of customizable orthotics could help do the trick. We went straight to the frontline people to ask if it would grab consumers — and also if it would work with our B2B intermediary customers in stores where the custom orthotics stations would be placed. They said, “Yes.” With those votes from the frontline, we reversed or neutralized negative perceptions in the middle ranks that otherwise could have killed the strategy.

When we moved to implementation, we ran into a big obstacle. Some key decision makers at one of our biggest customers objected to putting such a large, high-profile display on the coveted end cap of the aisles. We turned to our frontline managers who knew the customer intimately and asked for their help and advice. This drove a strategic campaign to identify and convert the mid-level objectors through our frontline teams. The same teams guided Brent and other senior managers in making the case to top management on the customer side. As a result, the custom orthotics line became an important profit driver for Consumer Healthcare.

The lesson: Frontline people can not only help the top leader validate an innovative new strategy, they can also be a powerful means to convince customers and those in higher levels at your company to buy in. 

From Schering-Plough both of us moved to Bausch + Lomb — Brent as CEO and Ken as head of corporate strategic affairs. We found a deeply stressed business that was running essentially as disconnected units: contact lenses and solutions, eye pharmaceuticals, and eye surgery systems. Two big challenges were how to be more relevant to customers while also being more efficient than bigger competitors that were deploying more resources. Brent developed a decisive strategic insight from riding with sales reps on calls to customers. One day he observed a pharmaceuticals sales rep stop the car and run into a Costco for a few minutes. Brent figured she might be doing some quick shopping and asked politely about that. “No,” the rep responded. She was dropping off products to a customer of a friend who was in the division that sold lenses and solutions.

The moment crystallized the realization that our doctor and optometrist customers did not see their world through the lens of our three, disconnected business units; rather they saw their customers as patients with integrated eye health issues. The experience with the sales rep helped lead to our core strategy of “One Bausch + Lomb.” The center of this strategy involved creating connections among our business units, cross-selling products across  the three sales forces customers, and positioning Bausch + Lomb as a company that cared about total eye health. This greatly increased our efficiency, while differentiating us from bigger companies with a fragmented sales approach. The new strategy drove sales growth and customer loyalty.

The lesson: By spending a lot of time out with the sales force on calls, a CEO will gain strategic insights. And be on the lookout for the unexpected insights like the one Brent had with the rep visiting Costco; that is where true strategic gems may lie.

There is a wonderful additional payoff from listening to the frontlines to formulate strategy: It will give them ownership of the strategy and make them passionate about turning it into a reality. That’s pivotal. Great strategies are only as good as the execution.

What Matters Most to Positive Feelings? R-E-S-P-E-C-T

A vast study of people in 158 countries shows that among the nonmaterial personal needs of respect, autonomy, and social support, respect is the strongest predictor of positive feelings, say Weiting Ng of SIM University in Singapore and Ed Diener of the University of Illinois at Urbana-Champaign and the Gallup Organization. In the survey of 838,151 people, respect levels were gauged through respondents’ answers to the question of whether they had been “treated with respect” the previous day.

What Successful Work and Life Integration Looks Like

Too many people believe that to achieve great things we must make brutal sacrifices, that to succeed in work we must focus single-mindedly, at the expense of everything else in life. Even those who reject the idea of a zero-sum game fall prey to a kind of binary thinking revealed by the term we use to describe the ideal lifestyle: “work/life balance.” The idea that “work” competes with “life” ignores that “life” is actually the intersection and interaction of four major domains: work, home, community, and the private self.

From years of studying people in many different settings, I have found that the most successful people are those who can harness the passions and powers of the various parts of their lives, bringing them together to achieve what I call “four-way wins” — actions that result in life being better in all four domains. My research has shown that there are ways for everyone — from the managers of sales teams, to executives in government agencies, to computer engineers, to florists, to coaches — to achieve professional success without always having to sacrifice the things that matter in their personal lives.

And yet as someone known as “the work/life balance guy,” I get pushback just about everywhere I go, especially from high achievers. “Stew, it’s nice to try to balance it all,” they say to me, “but in the real world, c’mon: How can you have a substantial impact without making major sacrifices in your personal and family life?”

So in writing my new book, I set out to find well-known people who have practiced, wittingly or unwittingly, the skills for integrating work and the rest of life and who could not only show that it can be done, but help teach us all how to do it. In the end, I settled on six people. I’d argue that these six people are successful at their work not despite having full lives outside of it, but precisely because they do:

Tom Tierney is the cofounder of Bridgespan, the best-known advisory firm for nonprofits. Throughout his career, he has sought creative ways of fitting the different domains of his life together, including learning from his children about what really matters. He has built organizations that encourage personal growth by rewarding results — not “face time” — and by motivating people with a vision of contributing to a greater good.
As COO of Facebook, Sheryl Sandberg has been redefining what it means to be a leader. Her candor about the challenges she faces in resolving conflicts among different parts of her life — as an executive, a catalyst for social change, a friend, a wife, a sister, and a mother — and about the non-traditional means she employs for doing so, has made her a persuasive role model and an outspoken voice on women and leadership.
Eric Greitens, humanitarian, author, and non-profit founder, attended Oxford as a Rhodes Scholar and completed his doctorate before becoming a Navy SEAL. For his service in Iraq he was awarded a Purple Heart and went on — after a difficult search for a meaningful next step to take in his life — to found The Mission Continues, an organization that helps heal wounded war veterans by guiding them to be of service in their communities.
Michelle Obama, the 44th First Lady of the United States, explains that she considers her daughters to be her first priority, even if this stance rankles those who would have her do more in seeking broader political and cultural change. In making sure her own children were receiving the most nutritious food possible, she began to advocate for better nutrition through the national initiative Let’s Move!. Her policies have won national acclaim.
Julie Foudy is a soccer champion who, in 1991 as a member of the U.S. national team, won the first Women’s World Cup. She was also part of the iconic U.S. soccer team that garnered Olympic gold in 1996 and again in 2004. She has since led an array of organizations that promote athletics for young people, empower young women, and advocate for social causes. Foudy’s success is an outgrowth of her ability to fuse all the important parts of her life — her soccer teams, her family, and her advocacy for worthy causes.
While it may seem counterintuitive to think of a rock and roll hero as an exemplary leader, Bruce Springsteen has said that he creates music “to make people happy, feel less lonely, but also [to be] a conduit for a dialogue about the events of the day, the issues that impact people’s lives, personal and social and political and religious.” With his hard-won clarity of purpose, derived from years of painful self-scrutiny, it follows naturally that he makes clear what he expects from the people around him, whether they’re members of his band or members of his family — he’s called “The Boss” for a reason.

Lest you think that their success derives just from great luck, think again. Not one of them was born into a life of high privilege. They have strived to achieve their own kind of greatness and, one way or another, to make themselves into who they are now. Each has suffered disappointment (half of them are on second marriages), frustration, doubt, and loss.

But in each of their stories I found naturally occurring illustrations of people who did great things by discovering — usually through trial and error — ways to integrate the different parts of their lives to reinforce and enhance each other. They show how accomplishment in a career is achievable not at the expense of the rest of your life, but because of commitments at home, in the community, and to your interior life.

Each has identified a life’s work that is important to them, and each both draws on and gives back to their families and communities in order to make that life’s work succeed. They exemplify how one can cultivate a life in which values, actions, social contribution, and personal growth exist in harmony. It’s a life in which disparate pieces fall into place, not every single day — that’s the impossible myth of “work/life balance” — but over the course of a lifetime.

Yes, these six people are extraordinary – but they use skills that all of us can use to make ourselves a bit more extraordinary, too.

Start by considering three principles: be real, be whole, and be innovative. To be real is to act with authenticity by clarifying what’s important to you. To be whole is to act with integrity by recognizing how the different parts of your life (work, home, community, self) affect one another. All this examination allows you to be innovative. You act with creativity by experimenting with how things get done in ways that are good for you and for the people around you.

Doing this means thinking and talking about what truly inspires you, whatever that might be. It requires figuring out how to take incremental steps that are under your control and that move you in the direction you want to go, while bringing others along with you. It’s not easy (and I never said it was). But like these six people, you can attain significant achievement in a way that fits who you are. As these leaders show, your own way is the only way that will work for you.

Marketers Don’t Need to Be Data Scientists

Consider your average FDA food label. The nutrition information on these labels is comprehensive and accurate, but the label itself is not at all well-suited for the job of making intelligent food choices – especially when you are a busy parent racing down the super-market aisle with your screaming kids.

Marketers today are often working with data that is similarly hard to parse. There’s been a lot of hype has been about “Mad Men” becoming “Math Men.” But this is the opposite of how we should be thinking about it. We need to help marketers use data to do their job better, not ask them to change jobs. In fact, the more precise the targeting algorithm, the more a campaign requires brilliant creative. When marketers over-invest in algorithms without any increased investment in creative, the result is that the right people are being targeted at the right time, but with a pretty unimpressive message.

What marketers have today is the equivalent of a food label full of calorie counts and mystery ingredients – we have classifications for talking about who owns data (1st party, 2nd party, 3rd party), how data were collected (explicitly, implicitly), and what sort of insights data reveals (descriptive, predictive). But what we need is a more user-friendly solution that tells us in clear terms “this will make you fat” or “this is really healthy.” Otherwise, the expensive analytics platform you’ve invested in will just go unused, just as nutritional labels are often ignored. In a recent study, almost four of ten respondents said they didn’t use analytics tools that their company had adopted because they didn’t understand “how to use analytics to improve the business.”

If, for example, you’re running a social marketing campaign, your community manager probably doesn’t have time to schedule a meeting with the “analytics department” to see what’s trending and why. She is optimizing for viral traffic which moves very fast. She doesn’t need data, she needs answers: is this the right headline, what should I put at the top of the page right now, what article should I promote with my limited paid media budget? Those answers should be readily available in her natural process — not trapped in an analytics report.

A company that is putting data into the right context is UPS. The shipping giant crunches thousands of data points to optimize package delivery routes. The output they give to their 55,000 drivers and route supervisors — turn right, turn left — is far less complex, but much more useful, than what food manufacturers give the average consumer. Especially for a driver with a truck full of deliveries to make, winding his way through a city in high traffic conditions. These algorithms enable drivers to be productive while also minimizing emissions from their vehicles.

Remember that analyzing data isn’t the point. The point is better marketing. And marketing decisions are still made primarily by people, not machines (even if, increasingly, it’s people operating machines). It’s not that these people are innumerate and can’t understand math, but that they have a lot more on their plates than just analytics. The point of collecting massive troves of intelligence and having great data sciences is to help these people accomplish what they need to accomplish — just in a more effective and convenient way.

As much as Big Data holds great promise for marketing, churning out more and more analytics will not unto itself create better marketing and maybe worsen it. Let’s put math in the service of the job to be done.

Why Monopolistic Pension Funds Undermine Capitalism

Peter Drucker was right, as he repeatedly was, when he foresaw in 1976 the emergence of pension funds as the most powerful wielder of capital in the modern economy. In his unique way he gave the story a neat twist by arguing that pension funds would save capitalism. Workers, he predicted, would own the means of production — but not through the violent overthrow of capitalism in the way Marx had suggested. Rather they the ownership would come through the stocks held by their pension funds.

Drucker was right, especially if you lump traditional pension funds along with their sovereign wealth fund cousins. The top 350 pension and sovereign wealth funds control just under $20 trillion of assets. They are the largest holders of securities in for-profit organizations competing in democratic capitalist environments. Of course, the funds have holdings in securities in non-competitive vehicles too, such as government issued securities. But Drucker was principally concerned about their holdings of the means of capitalist production.

If one looks carefully at these holders of competitive, capitalist company securities, one thing jumps out distinctly: they are not themselves competitive, capitalist organizations. Virtually all of them share a single form: a monopoly enforced by government regulation. As a Canadian, I have no choice as to where the pension contributions that are legally deducted from my paycheck go. Whether I like it or not they are sent to the Canadian Pension Plan Investment Board. CPPIB is granted a monopoly right by the Government of Canada to serve me (except in Quebec, where the relevant and equivalent monopoly body is the Caisse de Dépôt et Placement du Québec).

The same rules hold in the home of the brave and the land of the free. California state employees, Texas teachers, and New York City workers have zero choice. They are served by government-regulated pension fund monopolies. In fact, 19 of the top 25 U.S. pension funds, with $2.1 trillion of assets under management, are government-regulated monopolies. The other six, with $500 billion of assets, are corporate-run monopolies in which employees have little or no ability to opt out.

Capitalism has broad support because of a general belief in the power of competition, free entry to industries, and customer choice to produce increasing productivity and high levels of innovation. However, the ownership of those actively competing companies is increasingly in the hands of organizations that face zero competition, no threat of entry, and have customers who are forced to use them.

Why is putting the economy in the hands of regulated monopolists is a good idea? Obviously, many of those monopolists are doing a good job. I don’t begrudge sending my pension deductions to CPPIB because it is well run and does a nice job for me with my pension savings, and I have to applaud California Public Employees’ Pension Fund (America’s second largest pension fund with about a quarter of a trillion dollars of assets under management) for making the bold and brilliant decision to eliminate hedge fund investments from its holdings.

But the broad history of regulated monopolies is not inspiring. Without the forcing mechanisms of competition, entry, and choice, monopolies slowly but surely gravitate to serving themselves, not their customers. That is why your cable TV provider probably won’t tell you specifically when between 9 am and 1 pm the repairman will arrive to fix your defective cable connection. Although the company caused the problem, you are responsible for accommodating a schedule that is convenient to them not you, or they won’t fix their error. Who is being served here?

If we really believe in competition and choice, then a big question we should all be asking ourselves today is what should be done about our monopolistic pension system?

Create a Strategy That Anticipates and Learns

The buzz around using predictive tools to analyze big data in discrete areas of a business is loud and deserved. In health care, these tools are changing the way doctors identify people at risk of developing certain diseases; in fashion, they crunch purchasing data to anticipate trends; sales and marketing experts use them to tailor ad campaigns. The restaurant chain, Olive Garden, uses predictive analytics to guide its food buying and retail staffing plans.

But maybe the thrill of accomplishment in these pockets is diverting senior managers’ attention from another, even more critical opportunity: Digital technologies are also rapidly changing how managers can acquire and assess the information they use to develop and execute on enterprise-wide strategy. Strategy-making can now happen in real time.  Strategy can anticipate and learn.

Traditionally, the discipline of strategy has emphasized a deep understanding of market economics and potential disruptors, the evolution of demand and value expectations, the competencies of the organization, and the role of talent and performance management. Long-dominant frameworks like the Five Forces or SWOT analysis have been based, accordingly, on a fundamental, often static or relatively long-duration, set of market and firm characteristics.

Today, though, many of those characteristics are in flux much of the time. And so the power of incumbency, firm competencies, and market share is giving way to the ability to engage across companies and industries, innovate, individualize, and deliver. The definition of a market, customer, partner, or even competitor is now a moving target. Consider, for example, the work that Apple is doing with Epic (an electronic health record provider for hospitals and large medical groups). Together, these two companies are bridging the divide between personal health data that’s collected in a clinical setting, and data that’s collected by the patient. Not only can patients gather more comprehensive “home-based” data with Apple’s HealthKit platform, but also potentially stream that data (with permission) to their doctors via Epic’s systems. Is Apple suddenly a healthcare company? To what extent? Neither Apple, nor Epic, is a cog in a linear value chain (as is, say, a company that provides a variety of components with applications in different industries, like semiconductors for aircraft, appliances, or vehicles). Instead, together, they are sketching the outlines of a new market.

In this new environment, where markets can be created by ecosystems of partners, and innovations can originate anywhere in an ecosystem and grow at great speed, the ability of business leaders to predict and influence what’s around the corner—rather than act on what they see—becomes central to the ability to commit to a direction and allocate resources.

At the same time, powerful new tools are becoming increasingly available to enable real-time strategic decision making.  Now we have an opportunity to crunch the insights of key talent, data assets, and technologies from multiple internal and external sources, as they arise. We can connect insights and execution at a pace never before possible. That strategy in real-time, or even more aptly, strategy that anticipates and learns.  Using machine-learning tools, for example, data that currently exists in different enterprise systems and diverse external sources (production, supply chain, market, customer trend, financial and economic data) can be ingested and mashed together to reveal meaningful patterns and highlight gaps in markets. These analyses can identify opportunities for maverick business partnerships, and balance the biases of individual decision makers quickly and effectively.

This isn’t a retread of scientific management, nor is it an updated take on scenario planning. It’s an entirely different animal. To call it a new version of either, in fact, would be to overlook entirely the volume and scope of information that big data can provide and predictive analytics can crunch—in real time—for dynamic strategic purposes at the enterprise level. Scientific management and scenario planning, while forward-thinking, rely on information that’s in the rear view mirror.

No company is yet an exemplar of setting and activating strategy in the way we envision it. In many companies, setting and enabling strategy is still a regularly scheduled process or a defined annual deliverable. But a number of businesses have put more pieces of the practice than others into place. Amazon, for example, analyzes enormous pools of data to predict who their customers are and what their customers will buy next. The company uses these insights to drive—and adapt—strategic plans for new device and service offerings (e.g., Fire TV, Amazon Prime) and to stock its warehouses.

One can easily imagine Amazon and other like-minded companies building out more and more tech-enabled strategic and operating capability—linking the pieces. Financial services companies have made a promising start, and we are also seeing signs that other sectors—healthcare, life sciences, media, and entertainment—are waking up to the possibilities. The snag is that using predictive analytics in this way will be difficult for global companies with traditional compliance-centric and business intelligence reporting capabilities. Rigid, rules-based enterprise systems, installed in most companies 15 or 20 years ago, can’t easily be re-jiggered to integrate data and “mine” for patterns. Current enterprise technologies, and the business processes they support, are so hard-wired in most big companies that shifting to a more fluid, fast-paced, way of operating will be a major transformation.

The onus is on the senior leaders at these firms to demand predictive insights at the executive table and within core management processes by:

Investing in enabling data infrastructure and advanced analytics just as they would top talent, a new product innovation, or a strategic relationship
Embedding predictive analytic approaches throughout the organization—from the front line to the C-suite
Advocating their use both formally (as performance requirements) and by example, to move the organization’s focus from planning and coordination to analytics-driven and anticipatory
Holding these analytics to the same standard of precision, performance and improvement as management and key processes.

Predictive analytics is bringing new levels of speed, relevance, and precision to decision making. Prediction as a mode of engagement and insight will increasingly be a requirement for setting strategy. The companies and executive teams advancing, mastering, and integrating prediction as core to how they evolve strategies and manage will be the distinctive performers and leaders of the future.

Put Yourself in Your Colleague’s Shoes

I start my mornings with a run around Central Park in New York City. Over the last 18 months, it’s become more like dodging the cyclists as I make my way around the loop than going for a relaxing jog.  Cursing, flipping the bird – even a near miss – are regular occurrences as these two groups of athletes try to get their daily workout. I’ve even seen a cyclist spit on a runner.

How could so many cyclists be so angry? Wanting to understand, last Saturday I borrowed a friend’s bicycle, strapped on his cycling shoes, and clipped into the pedals. I entered the park on West 77th Street, where a steep ramp descends into the 6-mile loop. I quickly accelerated down it and had to merge onto a roadway packed with runners and pedestrians who weren’t paying attention to me. As my bicycle picked up speed and I tried to enter the loop, I realized I was in danger — and so were the runners in my path. That’s when I shouted, “HEADS UP!”

I had been bicycling in the park for only a matter of seconds and I was already yelling at runners and pedestrians.

My perspective shift was immediate. But I didn’t feel angry – I felt scared. Any unexpected move by a runner could mean a serious collision, both for me and for them.

This got me thinking: how common is it to really put ourselves in someone else’s shoes? For instance, earlier this year, a friend introduced me to a senior vice president at a Fortune 50 Company. In our introductory phone call I expected to discuss different productivity and labor models available for his large, multinational corporation. But after I asked some high-level questions and offered the important principles for how I organize roles and systems, this executive raised his voice, shouting, “That won’t work here! You don’t understand us!” and “It’s more complicated than that!” I quickly excused myself from the call, thanked him for his time, and suggested that maybe my area of expertise wasn’t helpful for him at this time. Privately, though, I was thinking, Great, another arrogant executive that you can’t tell anything that he doesn’t already know. What a jerk.

But now, in light of my recent Central Park epiphany, I have been rethinking how I perceived that call.  During our 25-minute conversation, I’m almost certain I did not say something to anger this man. And he is probably not a jerk; after all, we did get introduced through a mutual friend. What manifested as a demanding, short tempered, take-no-prisoners posture may have just been an executive under extraordinary pressure, working to protect himself or his team from something he feared — inadequacy, failure, embarrassment, or even just change.  Maybe if I’d done a better job of putting myself in his shoes, I would have been able to help.

How many conflicts at work result from simply being unable to see the issue from your counterpart’s perspective? I began to brainstorm a list of how coworkers might be better able to understand one another’s point of view:

Asking your boss if you can be a fly on the wall at one of the meetings her supervisor runs, so that you come away with a better idea of the pressures she and her peers face, and how you can help mitigate them.
Rotating responsibilities within your department, so that you create a shared understanding of what it takes to get stuff done, and increase visibility into the teammates’ competing objectives.
Accepting a role on a cross-enterprise or cross-functional task force – roles that are usually avoided at all costs – to get more exposure to what is going on elsewhere in the organization.
Taking an “externship” with a customer, working with their company for a defined period of time to really understand what it’s like to be a customer being serviced by your organization.

This list is far from exhaustive — and it’s worth emphasizing that what actually worked best for me had nothing to do with work. Building your empathy muscles in any capacity can improve to your ability to see situations differently in unexpected ways, whether you’re in or out of the office. It doesn’t have to be some touchy feely training session. It can be as simple as changing some habits or reading a good novel. Or even taking a ride in the park.