There is an old joke about the difference between visibility and exposure. Visibility helps you see clearly, but you can die from exposure.
One of the major advantages that is promised by digital transformation is the near real-time access to relevant data and information. Through a combination of networked systems, IoT sensors, data analytics, and cloud applications, organizations have an unprecedented level of access to data streams. To be useful to individuals within the organization, this data must be converted into timely and relevant information. Digital transformation is rapidly increasing the amount and availability of this information. The question before us is whether this provides visibility or exposure?
In traditional business operations, the conversion of data into information was often done by subject matter experts and managers who interpreted what was happening in the organization and prepared issue and status reports for senior managers. These reports relied heavily on the experience and judgement of those preparing the reports to filter what was important. These individuals chose to emphasize some data and information while ignoring or suppressing other data and information. When data or information indicated problems or mistakes had been made, they would often wait to report it while they validated the data or determined the underlying causes of the problem. In most cases, this was done with good intentions. Those preparing the reports wanted to present what they believed to be of significance and to put it in a correct context. In a few cases, they would intentionally hide the points that illustrated mistakes, incompetence, or worse, hoping to correct the situation before it was exposed.
Real-time Relevant Information
Along comes digital transformation which disrupts this approach. There is now more data available, and the applications and analytics can immediately convert it into reports. These reports are often accessible in real-time to many individuals in the organization. This is lauded in the digital transformation world as a good thing because it can empower the people on the front line. It gives them visibility to make well-informed decisions. But that also means that it will immediately expose those individuals on the front line that make poor decisions. In the past the subject matter experts and managers had an opportunity to correct the problems and change the decisions before they were widely reported in the organization.
For an organization to gain significant benefit from the availability of this real-time relevant information, a behavior change is often needed. This behavior change involves a change in internal organizational dynamics and a change in the roles and responsibilities at all levels of the organization. Unless these changes happen, the organization is likely to descend into paranoid and dysfunctional behaviors and decision-making.
A lot has been written over the past few years about the empowerment of front-line associates. Most of it has focused on the sales associate or customer service center agent. Without diminishing the importance of these roles, I want to expand the discussion to all individual contributors who now have access to real-time relevant information to make day-to-day business decisions. This includes the purchasing agent who is deciding whether to place a second source purchase order for raw material or parts. It includes the warehouse and logistics personnel who are deciding whether to expedite a shipment or let it go by standard methods. It includes the manufacturing operator who decides whether to stop a machine for routine maintenance or keep it running to make parts. It includes all of these and more.
In the past, they would follow their standard procedure (assuming there was one), and if they had questions or concerns, they would bump it up to their manager or a subject matter expert. Meanwhile they continued with their work and waited to receive direction. Now they are being asked to make the decision in real-time because they have access to data, and in many cases the analytics or an AI app is suggesting what should be done. This is a huge change in behavior and responsibility. Telling these individuals that they will now be responsible for decisions may not be empowering, rather it may feel like they are being setup for failure. This is especially true if they have not received training and coaching on how to make the right decision.
Subject Matter Experts and Managers
It is often said that information is power, and these individuals were among those most powerful in the organization because they were gatekeepers of information. This group will also need to undergo a major shift in behavior. Many of these individuals are long-term employees who have worked their way up through the ranks. They are in their position because of the experience they bring to the table. Based upon their experience, they are able to take limited amounts of data and make decisions. Some of those decisions were good ones, but it is likely that some were not. The visibility provided by the newly available real-time relevant information turns into exposure as their decisions are second-guessed by others. Further, they often had the luxury of being able to seek out more data and wait for a time to make their decision before reporting those to senior management. That time is now gone.
Thanks to digital transformation, the information that previously only they controlled is now known to everyone. The expert systems being put in place using analytics and AI are able to make recommended decisions much faster. Often these individuals are threatened by digital transformation which they believe makes their positions obsolete. In many cases they are correct. Their old positions are not needed. But what is needed is someone to train and coach the front-line associates. This is a tremendous shift in the roles and responsibility for these individuals. Some of them have the motivation and skills to become excellent trainers and coaches. But, unfortunately, some do not.
The third group impacted by this new availability of real-time relevant information is senior management. In the past, the information and reports they received were lagging and stale. The business situation had already moved beyond the issue that was discussed in the reports. So, the role of senior management was to listen and, if necessary, take a big action because the situation had grown to be a major issue in the organization. Also, many issues and events never made it to senior management because the subject matter experts and managers resolved everything before it was necessary to report it.
Now the senior management, like everyone else, can see the real-time relevant information. They can see every problem and success in the data as it happens. Since they formerly only saw the “big” issues and took action on them, there is often a bias by senior management to take action on every issue they see in the data. This can be very unempowering for the front-line associates who find senior management coming into their day-to-day activities and micro-managing. In addition, it further reduces the authority and relevance of the subject matter experts and managers. Therefore, the senior management must discipline themselves to let the front-line associates do their job and to let the subject matter expert and managers do the coaching. So, what is the role for senior management? They should be using this real-time relevant data to assess the health of the organization and their competitiveness in the market. Their focus needs to be on strategic planning and positioning, not tactical actions.
Digital Transformation usually creates visibility for real-time relevant information. If the front-line staff receives the training and coaching to use that information, the subject matter experts and managers provide the coaching for front-line staff, and the senior management uses the information for strategic planning and decision-making, then this visibility is a good thing. If instead the front-line staff are ill-equipped to make decisions, the subject matter experts and managers attempt to control the information, and senior management overreacts to small issues, then that visibility has become exposure.
Raymond Sheen, PMP® LSS BB, is president and founder of Product & Process Innovation, Inc. He is a veteran business leader with over 30 years of executive, engineering management, and project management experience deploying new technology and improving business performance. He has consulted and trained companies in various industries and business functions including marketing, engineering, manufacturing, service, IT, and Finance. Ray is author of the book, Guide to Building Your Business Case, published by Harvard Business Review Press. Ray received his B.S. in Mechanical Engineering from the United States Air Force Academy and his M.S. in Astronautical Engineering from the Massachusetts Institute of Technology and has a graduate certificate in Digital Leadership and Strategy from Boston University.