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August 14, 2014
People follow people…not numbers
By: Mark McDonald

Numbers, data, and information form the lowest common denominator in the digital world. Information intensity is an essential element of 'being digital' but it is not the ‘be all or end all’ of digital innovation. People and their ability are the digital end game. That can be easy to lose when there is data, data everywhere but all the ideas stink.

Increasing the availability of information, numbers, metrics, etc. does not make for better management or a higher performing organization. Data alone is just that, data. But data in action requires adding people to the equation for the simple reason that people follow people…not numbers.

I became painfully aware of this situation when talking with a colleague who described a company that is increasingly run 'by the numbers'. While there is nothing wrong with metrics and fact based management, it is all too easy for executives to put numbers ahead of people. When that happens, executives divorce themselves from the field by putting metrics and reports between the two. As I think about it, management exclusively by the numbers leads to the following:

•   Management retreats into logical data towers measuring processes and people based on the subset of information they believe reflect causality between action and results. No abstract model can fully account for human behavior unless it reduces such behavior to a commoditized set of decisions between product, price and performance. This is hardly an approach to create differentiated or distinctive outcomes that generate a premium.

•   Customers and trading partners are people, not just processes or capabilities. Management by numbers is mimicry assuming that success rests in following proven high performers without understanding why they do it. If it takes ten sales calls to close an account, then the assumption is to contact the client 10 times and then you are guaranteed a sale. Customers do not play by those rules. If they did, then all you need is an auto dialer.

•   Management sees solutions as getting a better, more predictive model in the belief that once we get the model right and measure/reward the right behavior, everything will be good. Such inside-out thinking is hubris at best and blinds the organization to external disruption.

•   Power, influence and rewards flow to the management hierarchy not the front line producing results as managers aggregate the contribution of their organization. They then make the mistaken association of wanting to be rewarded for that aggregate contribution as if they alone are responsible.

•   Good people leave when they see their individual contribution as counting for nothing other than the numbers. Engaged, creative, impassioned and innovative people are the type of people every organization needs to succeed. These people are difficult to reduce to numbers, but they are the same people you desperately need for the future.

Management by the numbers works best for simple problems and repeatable processes where brute force of the elimination of variance is the answer. It supports managers administering rather than leading the business. The problem is that too many of our current issues are more complex and subtle even when their impact is brutal disruption.

The widespread availability of process and performance information can easily lead executives to think of a digital worker as another 'resource' in the business. Management by metrics facilitates this view, establishes regulatory and compliance reporting regimes, and keeps HR an administrative back office function.

While management by the numbers makes textbook sense, it can be disastrous as numbers represent the lowest of comparison methods. We are all equal in the face of the 'facts' but who wants to be equal? Who values that they are undifferentiated from their peers, that their needs are exactly the same and should be filled in the same way as everyone else. That is a recipe for conformity rather than agility or innovation.

Data is too convenient a tool for management to continue to retreat from its aspiration as the 'technology of human achievement' and devolve back into new waves of administration. We already have too many administrators masquerading as managers.

Analytics professionals recognize this when they talk about the need to turn insights into action. People act on insights, even in a world of the industrial internet when everything is connected to everything else. Connectivity is the other essential element of digital. Without connectivity, islands of information intensity optimize the individual without innovating the overall system.

Taken together, information-connectivity and human ability define the world of work in the digital world. That work is not driven just by the numbers but by authentic and appropriate combinations of human, physical and digital elements. Those three elements define an outline for the digital worker and are the focus of the next post.

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