Are there also analytics than can let teams know, in advance, that a project is likely to fall behind or fail?

This question gets to the heart of the recent ideas around predictive team analytics and the notion of a ‘Physics of People‘. It also follows on from another piece from Steven where he wrote:

Emotions matter and teams need to have some form of empathy. Not something software is generally good at, so we need to find ways to compensate for this.

In addition to the points raised by Steven is research from Harvard, MIT and others, pointing to the fact that 10 – 40% of team performance is determined by psychological factors such as empathy, relational cohesion and the nature of interpersonal communication.

Predicting Team Performance

Predicting team performance is important and psychological factors are one approach that show promise. Using 4G and the Visual Team Builder (VTB), it’s possible to predict how specific Social Relationships between two people will unfold and in turn, aggregate this data to look at team relationships, complex group dynamics and to see their impact on team performance.

Background and Context

Before examining the diagrams below, it’s worth adding some context and background. The data collection process in order to create the diagrams is quick, taking around an hour per person and is explained in more depth here.

In addition, the diagrams from the VTB can be used to both predict the nature of specific Social Relationships amongst team members who have never met before and also used to analyse team dynamics amongst existing groups who are already working together.

In essence, the VTB lends itself as a tool to predict team performance, aid team creation, and enhance decision making and organisational design issues, along with providing coaching and developmental tips to enhance performance amongst existing team members.

Team Performance Challenges

In the first diagram, it is possible to see how the VTB highlights the nature of the different Social Relationships within teams 1, 2 and 3.

Based on a quick assessment of the diagram¹, team 1 presents the greatest challenges given the red relationship lines between Fraser and Trevor and Kate and Trevor. Likewise, team 2 has 1 red and 3 yellow lines, meaning that 4 relationships from 6 are going to require high levels of time and energy in order for these particular relationships to function productively. Of the 3 teams, team 3 has the most productive relationships and all things being equal, this would be the team that would be expected to display the highest level of performance.

Team Performance Successes

By way of comparison, teams 4, 5 and 6 tell a different story. Firstly, team 4 is likely to be the best performing team amongst all 6 teams. This is due to the fact that this team comprises of 6 green relationships between all 4 team members.

Secondly, the three teams below all comprise the same people as the three teams above. In other words, by using the predictions available from 4G, it is possible to optimise the team creation process such that the best possible relationships are experienced by all team members. In turn, this illustrates how 4G can be used to predict team dynamics, even before team members have actually met one another.

In Conclusion

By using 4G as a guide to group dynamics, along with incorporating it’s relationship predictions into team creation, organisational design and related processes, 4G offers a unique approach to both understanding and enhancing engagement levels, business outcomes and team performance.

Footnotes

1. The visual information from the Visual Team Builder diagrams presents a very high level summary of the team dynamics in question. In order to gain a richer picture, an analysis of the Social Profiles, Social Relationships and Social Groups in each team would need to be undertaken. This information is also available from the VTB and associated reports but is not captured in the diagram. It is also important to state that the diagrams above don’t take skills or context into account e.g. tasks, experience, responsibilities or the organisational hierarchy into account.  This information is available from other sources and is easily combined with the data from the VTB in order to create a full and comprehensive understanding of the scenario in question.

Image credit: evobrained

The notion of the superstar is a beguiling one but unfortunately for corporate HR departments, it is an overly simplistic view. Surely, success has far much more to do with more complex variables such as; working environment, culture, relationships and other contextual factors than with the brilliance of a few key employees. As Boris Groysberg wrote (here) we really are fooling ourselves if we think that success can attributed to the abilities of talented individuals. In short, to transform any poorly performing group or organisation, requires far more than the parachuting in of someone with a great track record in a completely different environment.

From her piece:

Analytics — what types of actionable, embedded, and/or predictive analytics with what types of visualizations, e.g. network analyses is becoming quite prominent when organizations try to figure out what roles and individuals have the greatest business impact? And I should emphasize here that this is about getting real insight to decision-makers in a form they can use when they’re in the middle of making that decision rather than just having a wonderful report-writer or business intelligence solution with which they can figure out the questions and search for the answers. Please note that I haven’t treated so-called “big data” as a separate topic (although everyone’s calling anything big data at the moment) because the real goal is actionable, ideally predictive, analytics, for which the management of big data is a necessary but not sufficient capabilities.

The significance of actionable and predictive team analytics cannot be understated. Tools that offer decision makers simple, actionable, valuable and consistent advice is key. Additionally, these capabilities have arguably been missing from the practice of anyone wanting to improve the engagement, well-being and performance of their staff or team members.

Predictive Team Analytics and Decision Makers

Whilst predictive team analytics offer decision makers new capabilities and ways to improve performance, it’s also worth pausing to think about the decision makers themselves.

Often, the term decision maker is (understandably) associated with members of the executive team, heads of department or budget holders. In many businesses, these three roles often overlap and decisions are taken by a relatively small number of people.

While this makes sense for some decisions, when it comes to managing and working with teams, every manager and arguably every person in a team is a decision maker.

There are many examples that illustrate the role of decision making in teams. While team objectives and job roles are context specific, from a manager’s perspective, answering the following questions requires performance-impacting decisions to be made:

• If Person A joins my team, how can I integrate them and get them up to speed as quickly as possible?
• If Person B joins my team, how can I ensure they will work well with Person C and Person D?
• Which team member will work best with Person E and Person F on the new innovation project?
• Of the five people working on the innovation project, who is best suited to update me on progress?
• Person G and H are often in conflict, how can I minimise, resolve or prevent this from happening?
• Is there a reliable method I can use to raise the level of engagement and performance for all members of my team?

The above questions are probably asked hundreds of times each day by different managers in many different businesses. The fact that gut feeling and experience are probably used as much as any tools or techniques in terms of reaching decisions illustrates the widespread impact that any tool with predictive team analytics capabilities might have.

Similar conclusions might be drawn when considering the likely questions that individual team members might ask:

• How can I improve my relationship with my manager?
• How can I raise my performance when working with Person 1 and Person 2?
• How can I make communication more productive and avoid serious conflict when working with Person 3?
• Person 4 has just joined the team and I’ve never met them before, what is the best way to work with them?
• Should I tell Person 5, Person 6 or both of them about my idea?
• What is the best way to gain the support of Person 7 for my new proposal?

As before, these individual team member questions are also likely asked numerous times each day. Given the importance of each team member to team performance and productivity, access to a tool providing predictive team analytics may well enhance people’s own individual decision making when it comes to their chosen approach, attitude, engagement and performance.

The use of a predictive team analytics tool as a way of answering, or contributing towards the answers to the above questions opens up a realm of new possibilities for both managers and team members. Likewise, such a tool or approach is likely to be of interest to anyone interested in raising engagement and performance levels across all areas of an organisation.

Image credit: duchesssa

A Starting Assumption

Although there is no shortage of models, assessments, psychometrics and techniques that help raise self awareness and provide insights, none offer predictions about people that are either regular or reliable enough to be used on a widespread basis.

The large number of tests, models and approaches is evidence of this. If a particular tool did provide useful and reliable predictions that improved understanding and decision making, then it’s usage and popularity would increase over time. Given that the vast majority of techniques and approaches have been on the market for 20 or 30 years plus, this is ample time for a consensus or market leader to have emerged with these qualities.

The other example that illustrates this assumption is the perception that HR doesn’t add value to the business. There is no shortage of commentary around this and in many cases, this line of reasoning has persisted since the Personnel Department was renamed Human Resources. The fact that HR can’t call on any widely used method or approach that offers reliable and actionable predictions and insights about people is probably one of the reason’s for this current perception of HR.

In summary, if one looks at the market structure for tools, tests and techniques, or the perceptions of the HR department, there doesn’t seem to be anything that might come close to offering a ‘Physics of People’.

The 5 Criteria for Transformation

When thinking about business transformation and what qualifies as an example of genuine transformation, as opposed to rhetoric, there are five criteria that provide a good test.

1. Simple to Explain – Can the benefits be communicated and understood quickly and easily?
2. Scalable and Predictable – Can the approach and it’s recommended actions be repeated with reliable results?
3. Changes to People’s Jobs – Do people learn new processes or new methods of working?
4. A Return on Investment – Does the approach help make or save money?
5. External Validation – Are there endorsements from researchers, professional bodies or other companies?

Hopefully, the list above is simple and straightforward. Further information and detailed examples applied to 6 innovations can be found here. To summarise, of the 6 innovations, 3 met all 5 criteria and could be considered transformative, namely Containerisation, ERP and Six Sigma. Of the other 3, Knowledge Management and Competency Frameworks, despite having 20 or more years to do so, don’t meet all of the criteria and are not considered transformative. Finally, the jury is out on Social Business, partly because it is a new technology or series of technologies and partly because case studies and client side applications are still new, as illustrated in this review of Gartner’s Hype Cycle.

The 5 Criteria as Applied to a Physics of People

With the above examples in mind, it is proposed that the 5 criteria outlined are a useful way to analyse new technologies and innovations and their potential for transformation. The following sets out the attributes that a Physics of People would need to have in order to have the best chance at transforming business.

1. Simple to Explain

A ‘Physics of People’ should provide reliable predictions about people’s behaviour, relationships and group values that are simple and actionable.

2. Scalable & Predictable

Consistent predictions should be accurate and reliable in multiple scenarios and contexts. In other words, the predictions should be generalisable.

3. Changes to People’s Jobs

New processes, particularly around team creation, organisational design, paths of communication and hiring introduce new ways of working and changes to people’s jobs.

4. Return on Investment

The predictions and decisions taken as a result of a ‘Physics of People’ approach help raise people’s own levels of engagement and satisfaction, along with improving business and group performance and productivity.

5. External Validation

Any ‘Physics of People’ model or approach should have appropriate recognition from professional bodies, other companies or academic researchers.

What a Physics of People is Not

While the criteria arguably do a good job of defining what a ‘Physics of People’ is, it’s also worth noting what it isn’t. Firstly, a Physics of People doesn’t disregard the essential nature of people’s free will, neither does it limit people in any way. In addition, the idea doesn’t incorporate moral judgements about people, for example, that one person is better or worse than the other or that certain groups of people are favoured over other groups.

In Conclusion

As technology, research and innovation progress, it will be interesting to  see how the analysis above shapes up, both in terms of other examples of business transformation but also as a way to assess any likely approaches for a Physics of People.

Justin and I had previously collaborated on Collaborative Innovation on behalf of Nesta.

The interview runs to about 20 minutes and the main topics we covered were as follows:

• Four Groups’ 4G methodology and human capital management software platform
• The 5 factors required for business transformation, i.e.
  • Simple to explain
  • Scalable and predictable
  • Changes to people’s jobs
  • A return on investment (ROI)
  • External validation
• The use of these 5 factors of existing innovations versus Social Business
• Stowe Boyd’s ‘Physics of People’ and the holy grail of predicting behaviours

Listen to the interview below.

From Jamie’s piece:

Today’s environment requires speed, which, in turn, requires the people and departments in your organization to collaborate effectively. Friction there slows everything down. We put up with that in the past and did okay, but the same won’t be true moving forward for a real social business. So I think as leaders start paying attention to what “social business” means, they will start to employ tools that enable better collaboration, both inside and outside the organization.

As the use of social business tools increase the speed of change, interactions and collaboration, previously hidden inefficiencies and communication problems are going to be discovered. It doesn’t matter how these inefficiencies are discovered (social network analysis, project delays, employee feedback etc.), the point is what to do about them.

Jamie believes that organisations will turn to more software tools but that the software tools themselves won’t resolve these frictions.

But I have a prediction: [companies] will over-rely on technology to solve this problem. The tools are becoming increasingly sophisticated and easy to use. So by all means, jump into those tools, but also recognize this: online tools won’t solve your silo issue. Collaboration software alone is not going to resolve conflict.

Given businesses focus on scalability and repeatability, it makes perfect sense to default to software tools. After all, the majority of methodologies and processes used on a widespread basis are scalable and repeatable, within reason. That said, we all know that software alone can’t resolve conflict and neither can it help facilitate some of the cultural changes required for social business to realise it’s full potential.

Internal collaboration is critical for social businesses, and it’s typically more of a sore spot than a strength in organizations today. But tools alone can’t fix this… If you want to build trust, then you need a process-based “architecture” for transparency that ensures information flows more freely.

Peopleware and Social Business

The idea of a process-based “architecture” for trust and transparency sounds very valuable for two reasons. Firstly, creating an alternative approach to creating trust and solving organisational and relationship friction via peopleware, instead of software, offers a new way to solve previously intractable problems. Although the idea of peopleware has been around for about 30 years, not much has changed. As Jamie Notter implies though, perhaps it’s time to revisit the concept and how it relates to enabling the benefits of social business.

The second reason such an “architecture” for trust and transparency is valuable is because there is a realisation that such an approach needs to be scalable and repeatable. As above, approaches and methods that can be applied consistently in a variety of different situations and that offer actionable predictions are always going to be of interest to businesses.

A scalable methodology that helps achieve the objectives of peopleware, that in turn helps realise the full value of social business can only be a good thing.

Revisiting Peopleware

Given that better peopleware is needed in order to realise the full potential of social business and if peopleware itself hasn’t changed, perhaps the last word should go to Bruce Eckel who wrote the following in 2010:

To alter how peopleware is perceived and handled. Process-oriented, management-centric corporate ideologies need to be transformed into people-oriented, [or a] managementless way of organizing businesses. Without such a transition there is no way to establish autonomy, trust and transparency for employees. These traits are… a prerequisite for building environments where people love their work!

It’s going to be interesting to watch the changing role of peopleware in social business, not least the idea of what peopleware is and how it can help social business realise it’s full, transformative potential.

Image credit: sentienceconsulting.com.au

Starting Points for a ‘Physics of People’

Cynefin

The first idea that I’m aware of comes from an article in the IBM Systems Journal. Written in 2003 by Cynthia Kurtz and Dave Snowden, the following extract is an initial call for a ‘Physics of People’, along with the recognition of the challenge involved:

We would like (but do not expect) to see simulations of human behavior able to encompass multiple dynamic individual and collective identities acting simultaneously and representing all aspects of perception, decision-making, and action.

This quote really leaves nothing on the table, conjuring up the idea of an omnipotent, all-knowing reality. Whilst this has an unmistakable element of ‘Big Brother’ within it, it’s also reassuring to know that physics itself seeks an understanding of reality that is equally, if not more profound.

Critical Mass

Philip Ball wrote Critical Mass in 2004. He holds a doctorate in physics from Bristol University and was an editor for the science journal Nature for 10 years. Critical Mass examines some of history’s greatest thinkers and at it’s heart, the book seeks answers to the following question:

Are there any “laws of nature” that influence the ways in which humans behave and organize themselves?

Publishers Weekly wrote the following review:

Ball enthusiastically demonstrates how the application of the laws of modern physics to the social sciences can greatly enrich our understanding of the laws of human behavior: we can, he says, make predictions about society without negating the individual’s free will.

While Ball himself writes:

To develop a physics of society, we must take a bold step that some might regard as a leap of faith and others as preposterous idealization: particles become people.

The idea that particles become people tends to ignore fundamental elements of being human, not least free will, our emotions and consciousness. That said, Ball recognises the shift in thinking that needs to take place in order for a ‘Physics of People’ to take root.

Reactions to Critical Mass

Writing in 2009, James Governor wrote a review of Critical Mass which gathered further comment and reaction. James speaks very highly of the book when he writes:

I have been meaning to get a few ideas down about Philip Balls’ Critical Mass: How One Thing Leads To Another for a while. After all, it pretty much blew my head clean off. I totally loved the book – its changed my thinking more than any work of recent time.

This is then followed up on his blog by a reader’s comment:

Besides physics, there’s queuing theory, systems dynamics, formal nonviolence theory, and large but probably finite sets of knowledge that would inform the social media expert. Predicting human behavior, individual and group, has been the focus of disciplines including politics science, ethics, religion, and more. Prediction is the root goal of all science.

Given the value of science and it’s goal of prediction, it would be reasonable to conclude that a ‘Physics of People’ would be of interest to businesses, economists, sociologists and psychologists, to name but a few.

Implications for Business

The extracts above serve as the foundations for the ‘Physics of People’ idea. Over the last ten years or so, a handful of people have been asking the questions and thinking about how a better understanding of people and their behaviour will advance business, society and humanity as a whole. Key to this is the notion of prediction and the accuracy of understanding that enables successful predictions to be made.

The following sections, in chronological order, highlight examples about what a new and different understanding of people’s behaviour might mean. for business. Some of these extracts weren’t speaking directly about a ‘Physics of People’ but with a little imagination, the links should be pretty straightforward.

Thomas Otter

In December 2007, Thomas Otter considered the impact of online social network analysis on HR and business as a whole. There’s a lot of points in his post and I’ve taken a slight liberty in condensing the extracts, but the points speak for themselves:

Strong online social network analytics within a corporation would enable HR to do some seriously deep study of the organisation’s strengths and weaknesses…. I got a glimpse into a toolset that would enable HR folks to really grasp the information flows within the organisation. If you could start to mash this stuff up with some formal organisation modeling tools…gosh… The HR professional that is able to actually analyse this, and the impacts on the business will be key.

Social Network Analysis is one possible route or component of a ‘Physics of People’ and as above, it’s impact has great potential.

Brian Sommer

Frustrated with the offerings of HR vendors, Brian Sommer wrote the following in June 2009:

Businesses need analytics with foresight not hindsight. Here’s what an analytic application should do. First, HR vendors must learn to use something else besides just transaction data. They need to ask questions of executives to learn how they detect a bad management situation. They would learn about ‘proxies’ or ‘clues’ that something is amiss. They would then build an analytic application that scans all employees, all managers and all departments to see: When a single department is leading many of these indicators, these are ‘early warning’ indicators that a bad, dysfunctional, ineffective, toxic or pathologically flawed manager is in charge.

While the above is more biological in tone than physical, the point remains, current offerings aren’t strong when it comes to predictions and providing meaningful early warning signs of behaviour, relationship or cultural friction.

Morris Panner

The next quote, written by Morris Panner in 2009 talks about a new system of managing people:

Finally, a new system of managing people is required. Communication across the enterprise means that collaboration will replace top-down, command and control directives. In one address, Cisco CEO John Chambers noted that he was awfully good at the command and control part of managing a business, but it was the collaboration and distributed management that required constant innovation and work.

Collaboration is often held up as a ‘new paradigm’ when it comes to new forms of work. While this is now arguably a cliché, the lack of a ‘Physics of People’ perhaps accounts for some of the hype and the challenges experienced by John Chambers. If something isn’t predictable, then it’s likely to require a lot of innovation and work in order to make any meaningful progress.

Stowe Boyd

The final and most recent sound bite comes from Stowe which takes us full circle. Not only is his Socialogy project funded by IBM, but I think he hits the nail on the head when he writes:

I agree that a more coherent understanding of the ‘physics of people’ is needed for businesses to take the great step forward implied by social business’ value proposition.

In Conclusion

The ‘Physics of People’ term feels fresh and somewhat embryonic. From the writing above, it’s still very much a new idea. That said, there are some initial signs of recognition and the implications for business are profound.

If the promise of social business or any related transformational innovation around the understanding of people is going to happen, then I’d argue strongly that something resembling a ‘Physics of People’ will be either be a core component, or a core facilitator of such a change.

Image credit: phono

From the piece:

I am going to be talking with a lot of researchers, visionaries, and practitioners who are working to push business into the 21st century, and to explore their ideas about moving onto a philosophy of business grounded in what we know about the human mind, social networks, and the emergent behaviors of connected groups.

In the series, I pose one question to my guests consistently: ‘How do you think a scientifically-grounded understanding of people as social beings will change business in the future and how?’

Incidently, Socialogy isn’t the first term that Stowe’s coined – he’s the originator of the term ‘hashtag‘ and also coined ‘social tools‘ back in 1999 so it will be interesting to see how this new term does.

Socialogy and the Potential to Transform Business

Given Stowe’s question, I thought I’d have a go at answering this from the perspective of Four Groups.

A scientifically-grounded understanding of people, such as 4G, has the potential to change business in hugely profound ways, perhaps on a scale comparable to the industrial revolution, the introduction of the PC or the rise of the internet.

Such a statement is naturally loaded with many assumptions and implications, so it’s worth exploring both in further detail.

A Historical Context

A scientifically-grounded understanding of people is an extremely broad term. One could argue that a scientifically-grounded understanding has been with us for the past 20, 50, even 100 years when one considers high performance work systems, early psychometric work or Taylorism. Incidentally, the following extract sounds remarkably similar to what proponents of social business talk about today, even though this was written by Chris Argyris in 1964!

The emphasis on organizational change in the corporate life of recent years – including job redesign, autonomous groups, high performance work systems and the redesign of control systems – owes a great deal to the pioneering work of Chris Argyris.

Further to the Argyris quote, I’m assuming that Stowe is looking for new sources of scientific understanding and by extension, he doesn’t consider the majority of ‘classic’ tools and tests to be worth investing much time in, otherwise why bother “talking with a lot of researchers, visionaries, and practitioners who are working to push business into the 21st century.”

Assumptions Required for Business Transformation

Looking at things from a contemporary perspective, in order to transform business, or put another way, to have a sustainable and valuable impact, 5 criteria need to be met in order for any ‘scientifically-grounded understanding’ to realise it’s full potential.

1. Simple to Explain
2. Scalable and Predictable
3. Changes to People’s Jobs
4. A Return on Investment (ROI)
5. External Validation

1. Simple to Explain

In order to succeed, the benefits of any new approach, theory or idea must be easily explained. Back of a napkin, 140 characters, a single diagram, a 1 minute elevator pitch. It doesn’t matter how it’s explained, as long as enough of the benefits can be communicated quickly and easily. Equally, it isn’t essential that everything is simply explained, just the headline benefits, as more in-depth explanations and technical details naturally require more time.

Consider the Java computer language . This was simply explained with the phrase “write once, run anywhere” which in the world of computer programming in the 1990′s meant a great deal. Further to the initial idea however, Java had a number of other innovations, particularly how the language itself worked that needed more time to explain fully. The point however is that the idea could be quickly and easily explained to others.

2. A Scalable and Predictable Methodology

The second key to realising substantial benefits comes from a scalable and predictable methodology. Core to scientific understanding is the notion that scientific discoveries make predictions that can be reproduced and this is true whether we’re talking about the temperature that water boils at or the discovery of the Higgs Boson.

In terms of the implications for business, it is important that any innovation offers cause and effect predictions that can be applied in a repeatable and consistent manner. This isn’t to say that something needs to run at Six Sigma levels, but that it is consistent enough to be reliable and useful.

Context is key here and given that we’re talking about understanding people, I’d suggest that anything that is predictably consistent 80 – 90% of the time or better is going to be sufficient. Dave Snowden sums this second point up well when he writes:

Scaling and sustainability have always been the issue with methods that depend on changing the people rather than the process. You might achieve the change in an individual or a group of people for a period, but until you imbed the new way of thinking into the heart and soul of an organisation such change is only temporary.

3. Changes to People’s Jobs

The third factor is really a test of the second. By incorporating a scalable and predictable innovation into a business, this typically impacts existing processes, or requires the creation of new processes. Along with the creation of new processes comes new activities in people’s jobs and ultimately new job titles.

Consider the evolution of personal computers in businesses. As more and more people began to use their own computer, typing pools began to shrink and eventually disappear. Alternatively, given the rise of social tools, jobs such as internet community management and social media marketing have appeared in more recent times alongside the new software tools that make them possible.

New job titles don’t always equate with genuine changes to people’s jobs though. The rise of the HR Business Partner title has been met with some criticism, so testing this third principle typically demands some patience and the chance to review multiple case studies.

4. A Return on Investment (ROI)

The fourth factor evolves around the value generated from any new understanding or innovation. On one level, any new approach, tool or technique needs to be able to deliver value within a meaningful time period. Given that we’re talking about understanding people, I’d suggest that this time frame would ideally be within a 12 month period and is likely to be no greater than 3 years. With today’s pace of change being what it is, a 5 year horizon is almost certainly going to be too long, at least when it comes to people-related innovation in business.

Looking at ROI in more detail, this needs to be realised in a practical manner and returns either have to be measurable or at a minimum, there needs to be a consensus amongst stakeholders that the activity in question creates meaningful value, even if it’s hard or impossible to demonstrate empirically.

Whilst reduced delivery times, higher sales or greater profit margins can all be easily quantified, showing the ROI from people-related activities is often easier said than done. That said, although proven results go a very long way in demonstrating a business case, it might be sufficient that enough stakeholders believe that the new activity adds appropriate value, even if measuring it isn’t possible.

Looking at ROI more generally, a number of innovations have succeeded based on the impression of value, rather than an explicit measure. Mobile phones, smart phones, tablets and email have all experienced rapid adoption rates despite the lack of a formal ROI or business case. Instead, their success has been based on people’s own perceptions and experiences. By way of contrast, merger and acquisition activity continues in spite of research suggesting that it erodes, rather than creates company value.

5. External Validation

The fifth and final criteria is external validation. External validation may come through professional bodies, external (typically academic) research or company announcements endorsing the innovation in question. Given the external focus of this last factor, it typically takes several years before appropriate examples can be collected.

Motorola’s endorsement of Six Sigma, the creation of a Social Business Council or announcements from Warner Bros. and Wal-mart in determining the Blu-ray/HD DVD format battle all illustrate the significance of external validation when considering innovation and it’s likely success.

The Assumptions in Practice

In order to assess the criteria above, the following table compares six innovations to the criteria defined. To create a balance, some examples clearly fit the criteria well and are arguably now part of the business mainstream whilst others fit less well.

While the table above is by no means exhaustive, it hopefully illustrates the role that the five assumptions for business transformation play. When considering the assumptions against a range of different tools and techniques, one could argue that if an innovation manages to fulfil all five, then the likelihood of achieving business, departmental or procedural transformation is good.

To illustrate the point further, the following methods and technologies have transformed business and business departments, as shown in brackets, whilst also meeting all five of the assumptions.

1. Call Centres (Sales, Customer Service)
2. Containerisation (Transportation and Supply Chain)
3. Customer Relationship Management (Sales and Marketing)
4. ERP Software (Manufacturing, Planning, Reporting)
5. Email (Communications)
6. Financial Derivatives (Finance and Treasury Departments)
7. Mobile Phones (Communications and Sales)
8. Personal Computers (Administration, All Round Impact)
9. Six Sigma (Manufacturing)
10. The Web (IT, Information Retrieval, An All Round Impact)

By extension, the 10 innovations above have transformed the 9 functions/departments below.

1. Administration
2. Customer Service
3. Finance
4. Internal Communications
5. IT and Information Systems
6. Marketing
7. Manufacturing
8. Sales
9. Supply Chain

Clearly what’s missing from these two lists is anything that helps with ‘understanding people as social beings’.

Implications for Socialogy

Whilst the five assumptions above illustrate the requirements for business transformation, the lack of an example related to a ‘scientifically-grounded understanding of people’ is conspicuous by it’s absence.

Looking more broadly at ‘understanding people’, while Competency Frameworks were analysed in the table above, similar conclusions are likely to be drawn when looking at other tools and techniques in the psychological and Human Resources fields. Examples include:

• 360 Degree Feedback and Performance Appraisals
• Employee Engagement Activities
• Staff Surveys
• Coaching and Staff Development
• Social Network Analysis

Socialogy and Identifying the Conditions for Transformation

Returning to the original answer to Stowe’s question:

A scientifically-grounded understanding of people, such as 4G, has the potential to change business in hugely profound ways, perhaps on a scale comparable to the industrial revolution.

Based on the 5 assumptions and the numerous innovations and methods already explored, a number of conclusions and predictions present themselves.

Firstly, finding a scientifically-grounded understanding of people that does fulfil all five criteria and is focussed around people is easier said than done. Clearly, there are no shortage of HR tools, methodologies and psychometrics as outlined above, although it doesn’t look like any of the ‘traditional’ tools hit the mark. Likewise, the growth in social business over the past 5 years has brought this into much sharper focus. This is a good thing but it also exposes the current shortcomings in this area.

Secondly, should any innovation or understanding emerge that does fulfil the five criteria, then the potential to change business in a hugely profound way becomes a reality.

Thirdly, one possible candidate for fulfilling these criteria and realising the transformative potential of socialogy is 4G. Although there are a variety of questions still to be answered by 4G, the 4G approach is one that is worth further consideration.

Finally, the 5 assumptions can be used to test any new approaches or methodologies for their transformational potential. Although the research underpinning this post is far from exhaustive, the assumptions may help provide a framework against which any new model or theory can be tested. Given the historic context and examples of transformation that stretch back 30 or 40 years, further examination of these 5 assumptions may prove to be useful and fruitful.

Image credit: iwanbeijes

From the research:

Failure post-mortems often lamented that “I wish we had a CTO from the start, or wished that the startup had “a founder that loved the business aspect of things”.  In some cases, the founding team wished they had more checks and balances.  As Nouncers founder stated, “This brings me back to the underlying problem I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made.”  Wesabe founder also stated that he was the sole and quite stubborn decision maker for much of the enterprises life, and therefore he can blame no one but himself for the failures of Wesabe. Team deficiencies were given as a reason for startup failure almost 1/3 of the time.

Clearly these team deficiencies stem from both skill sets and perhaps more subtly, personality differences. While the research mentions relationship disharmony in another section, it wouldn’t be unreasonable to assume this also contributes to failures in this category too.

Startup Failure, Team Deficiency and Google

Whilst writing this post, it was striking that when googling “team deficiency” none of the top results, at the time of writing, deal directly with the topic. Given the time and money put into team related issues by businesses, founders, investors, consultants and researchers, this came as something of a surprise.

Whilst is it commonplace to speak in terms of mechanical, manufacturing, medical or construction related deficiency, there are precious few online articles dealing with team deficiency.  If teams are said to be deficient in something, then this raises a whole series of other interesting questions, not least of which is ‘what is a team’?

The Mindset Behind Startup Failure and Team Deficiency

When thinking about what a team is, rather than reeling off a list of the usual suspects like goals, visions or skill sets, it’s perhaps worth spending a moment to think about the mindset that comes up with the term ‘team deficiency’ in the first place.

As the research above comes from startups, it wouldn’t be outlandish to assume that such a mindset is focussed on cause and effect outcomes, dealing with complexity, probabilities, high risks and high rewards and minimising failure.

Given that these factors are likely to play a meaningful role in the minds of startup founders, key employees and investors then this might not be a bad place to start from. This is perhaps even more important when considering the risks and rewards associated with startups and other high profile projects.

Combining a Startup Mindset and Team Deficiency

With the lack of articles on team deficiency on the one hand and the assumed mindset of those involved in startups on the other, the overlap between the two areas feels very embryonic. Perhaps what’s missing is a working definition of a team that explicitly focusses on elements that are measurable and predictable when it comes to assessing team performance.

If such a definition were available, then determining exactly what a team is deficient in would then become a much simpler exercise. Until then, the search for a better understanding of what contributes to startup failure continues.

Image credit: guitargoa