by Kim S. Nash

You Can’t Use a Smartphone for Everything

Mar 25, 2011
Business IntelligenceIT StrategySmartphones

The types of devices you give your colleagues and the way you deliver data have an impact on how they understand information. Business-focused CIOs learn how people in their organizations think, so they can apply the right technology to spark better decisions.

Technology may enable the always-on worker, but Mother Nature doesn’t allow an always-on mind. That creates a dilemma for companies that want employees perpetually in touch but know that a distracted person makes subpar choices. The same problems arise when people sit at their desks, suffocating in data, but are asked to make strategic decisions.

“The challenge we face in our ability to concentrate on any one thing has become enormous—unless you put controls on people’s relationship with modern technology,” says Sheena Iyengar, a professor at Columbia Business School. Iyengar is the author of The Art of Choosing, about how people make decisions and how to choose better. She concludes that giving customers or colleagues too many options can impair their ability to make skillful choices.

This is the tightrope CIOs must now string for their companies. The ability to deploy systems that help colleagues make decisions—not simply close the books or place orders, but think—is emerging as a critical dimension of the CIO’s job. You must become a scientist of organizational and human behavior to really exploit IT. (For more on helping colleagues make better decisions, see “Teach Young Workers to Be Business Thinkers.”)

Ken Harris, CIO of Shaklee, says his 22 years in IT have taught him about the habits of the mind. Typically, Harris says, a person won’t make a decision until he identifies a familiar pattern in the facts, which makes him comfortable enough to act. This is often a slow, incremental process, he says, which partly explains why many companies plod rather than sprint.

Decisions are composed of fact and feel, says Tom Murphy, CIO of AmerisourceBergen, a $72 billion pharmaceutical distributor. Technology can collect and sort facts quickly, but no computer—not even IBM’s Jeopardy! winner, Watson—can simulate the gut feeling of an experienced decision maker, he says.

But here lies opportunity. Harris, Murphy and other CIOs say that if employees could be made comfortable more quickly and attain clarity sooner, companies could not only move forward faster but leap far ahead. If, as management gurus say, the meta job of a CEO is to tell the story of the corporate vision and each employee’s special role in fulfilling it, then that of today’s CIO is to arrange technology to both reflect and shape the way a company thinks.

“We talk about this all the time,” says Ramón Baez, VP of IT Services and CIO at Kimberly-Clark, a $19.7 billion consumer packaged-goods manufacturer. Selling diapers and tissues is a cutthroat business where financial results depend on precise supply-chain moves. Helping colleagues make good decisions matters, Baez says. “This is not a philosophical discussion. This is life for me right now.”

CIOs unprepared for this role, however, will continue to deliver IT projects without considering the tendencies and motivations of the humans who receive them, Murphy warns. Their companies may get left behind.

Conversation Incitement Officer

Smart CIOs already know to deflect requests for specific technology (“The entire sales team really needs iPads!”) and instead ask: What are you trying to do? Discovering the requester’s goals may lead to alternative technology solutions. But too many CIOs stop there, and they miss the chance to uncover not only more about how the requester thinks, but also more about what IT can do to enhance that thinking.

“Tactical people are providing a tool to answer a question,” Murphy says. But broader-thinking CIOs want to know what variety of questions employees have and the many ways to answer them. And then they consider how to provide technologies that promote different ways of thinking about the questions. How to think better, says Lev Gonick, CIO of Case Western Reserve University, “is truly one of the most profound questions in the life of an organization.”

Collaboration, for example, isn’t about just improving the pace of decision making; it’s also about improving the quality of the decisions, as one recent study from Carnegie Mellon University and MIT concludes. Business, computer science and psychology professors studied whether a group of people working together attained a collective IQ higher than that of its individual smart members. In a word, yes. Groups can perform certain tasks better than individuals, the study says, including solving visual puzzles and negotiating over limited resources. That’s most true when the group isn’t dominated by just a few of the members, the researchers conclude. They suggest that good electronic collaboration tools can raise a group’s collective intelligence, perhaps in part by equalizing the interaction so more people have input.

The implication, as Gonick sees it, is that CIOs who understand group dynamics are likely to produce IT that employees not only like to use but that also makes them work better.

The technology an employee uses, however, can hamper his thinking about better ways to interact with coworkers or customers, observes Chris Perretta, CIO of the $9 billion investment company State Street. Perretta tries to let employee creativity loose by asking colleagues to imagine what they would do with infinite computing power and data. “That’s a tough question to answer because people are locked into thinking in terms of the tools we give them today,” he says.

He steers the talk beyond limited ideas about personal productivity. So what if you get your e-mail attachments on your smartphone in the airport lounge. Here’s the better question: What intractable business problem could you solve with no limits on time, money and data? Those are the industry-changing thoughts CIOs can facilitate, he says.

Low-latency stock trading, where transactions execute in nanoseconds, grew from such conversations, Perretta says. Riffing on big ideas, IT and product engineers at financial firms discussed whether it was truly possible for investors to optimize their portfolios in real time. Such conversations will produce change—but only if the technologists understand how their company’s products are made and, ultimately, what customers want, he says. Part of the CIO’s new mandate is to promote this kind of cross-functional discussion, he says.

Often, IT staffers are building systems for people who think very differently than they do, he adds. Technologists tend to be methodical, so Perretta prizes IT professionals who can fathom the varied thinking styles of colleagues from other areas of the company. He likes to hire “big brains” who understand not only the business but also organizational behavior, he says. “You don’t want to have a whole room filled with them because they sit around and contemplate things. But you need the big brain somewhere in the organization.”

Enough Data to the Right People

If a CIO truly understands how his organization thinks, he knows he must provide not just access to data but also access to people. Often when we feel inundated by information and other stimuli, we seek out advisors whose opinions we trust. It’s not a delaying tactic, but a productive way to come to a decision. A cabal of senior executives might convene behind a closed door. But just as often now, the trusted circle might include people across the globe whom you’ve never met face-to-face, says Shamim Mohammad, vice president of IT at BJ’s Wholesale Club, a $10.8 billion discount retailer.

Knowing that such interpersonal interaction is, for some managers, a natural part of dealing with the strategic decision-making process, CIOs should build systems that allow it to flow freely, Mohammad says. Encourage the use of social media, he urges. When he’s formulating project plans, Mohammad sometimes consults peers at comparable companies and other senior IT executives via LinkedIn and his professional network. Companies as diverse as 3M, IBM and McCann Worldgroup have set up internal social networks to allow Facebook-like sharing within the firewall.

IT decisions, of course, often hinge on such pesky practicalities as time, budget and internal politics. And everyone wants to see a hard return on investment. “I want to increase sales. I can track that,” says Harris. “I want to increase outreach to customers. I can track that. I want to help people make better decisions? Hard to track.”

Because of this emphasis on numbers, IT groups can get caught up in honing transaction systems, continually shaving seconds off processing time or storing data a hair more efficiently. But really, presenting relevant information to the people who will eventually decide to trigger transactions is more fruitful, says Baez from Kimberly-Clark. Enterprise IT, he says, should learn from Amazon.

As anyone who visits knows, the online retailer displays suggestions based on a person’s shopping history and the behavior of similar customers. “What we should focus on is getting the right information to key users and stakeholders, to make decisions faster. We have the transactions systems nailed already,” he says.

In a new project, Kimberly-Clark is combining old and new technologies to present information that leads users to simple, clear decisions. A homegrown analytics tool pulls inventory data from an SAP system and from the mobile devices of Kimberly-Clark employees in the field, which hold current inventory counts from individual stores that stock Kimberly-Clark products. The system then plots the data on a map similar to Google Maps to show regional managers which stores need which products or which may have product pricing issues.

“It’s so useful because it only takes a couple of hours to train a leader how to use it,” Baez says. The next step will be to put the mash-up on tablets, for nicer interactive visualizations.

Meanwhile, the soundest decision in the world isn’t so smart if it comes too late. For many people (you may even be one of them), the idea persists that if they could find just the right piece of information, they would make the right decision. They request ever-expanding access to databases and the newest analytics tools. They don’t realize that no “Aha” moment will materialize wherein data tables pivot, like a pod of water ballerinas, into the shape of the company’s next breakthrough product.

Waiting for that piece of magic information or spending endless hours searching for it can delay the decision until it becomes moot, says Fernando Gonzalez, CIO of Byer California, a privately held clothing manufacturer. While there may be situations in which precision is critical (dispensing medication or launching a rocket come to mind), most times it’s fine not to know everything.

Some years ago, before he arrived at Byer, Gonzalez learned to avoid the trap of thinking that data must be perfect. He had built a business-intelligence dashboard for his CEO, but he couldn’t get the sales information to mirror exactly what the company’s general ledger system said.

“The CEO asked me where this system was. I told him I didn’t have it balanced yet,” Gonzalez recalls. “He said, ‘You don’t think I’m smart enough to put a margin of error in my decision making?’ I learned maybe you don’t need perfection.”

Since then, Gonzalez has embedded that idea into his talks with coworkers about IT, he says. As the financial crisis began in 2008, data on sales, inventory and other variables sometimes didn’t reflect clearly that the economy was sinking. Some indicators were up, others were down. Manufacturers, he says, decided to act on the information, however imperfect, by tamping down production so as not to get stuck with too many unsellable products.

The information was good enough. Decision makers recognized enough familiar indicators in the data to feel comfortable acting on it. To Gonzalez’s mind, the moves came just in time. “It was what was needed. It has kept us from going into a depression. We were on that verge,” he says.

Choose the Right Technology

To match tools and data to decision makers’ needs, CIOs must sort through a haze of sometimes confusing information about how people behave under the influence of technology. One example: A recent study from Harvard, Stanford and the London School of Economics shows that analytics, enterprise resource planning and other information-access software promote autonomy, pushing decisions down the organizational hierarchy.

On the other hand, the researchers conclude, widespread communications technologies push decisions up the chain—it’s too easy to call a manager for input.

Clearly, despite those findings, there will be no mass movement to rescind smartphones. But knowing how they affect behavior should lead CIOs to more finely tune which systems and data are made available to mobile users, says Barry Schwartz, a professor of psychology at Swarthmore College. The consumerization of IT may have employees demanding mobile access to all manner of enterprise systems. Again, CIOs must ask, “But why?”

Consumer behavior researchers find that when buying electronics, people will choose bells and whistles over usability, Schwartz says. “They think, ‘Give me everything under the sun because who knows what I may want to do tomorrow,’” he says. “You need grown-ups in IT to stop people from exercising this tendency.”

Plus, some technologies don’t work well for some kinds of decisions, says Twila Day, CIO of Sysco, a $37.2 billion hospitality and food-services company. Smartphones are best suited for yes-no, buy-sell, approve-decline decisions, to keep work flowing when key managers are out of the office, Day says. “You have to pick and choose what you’re pushing out to these devices.”

Making big decisions about strategy, for example, usually requires some combination of contemplation, reflection and playing with information, says Gonzalez at Byer California. Executives trying to distill information on a phone will find there’s not enough screen real estate to get good answers, he says. A laptop will serve better. “Normally, asking one question [of data] leads to another question and another,” he explains. “They seldom go into a system and get the answer with the first question. They drill down. They link and pivot the information. That’s how those decisions are made. Not by looking at one piece of data and thinking, ‘Oh, there it is. Perfect.’”

Consider of the mind-set of someone on a smartphone, suggests Columbia’s Iyengar. Dashing through an airport, participating in an off-site meeting, trying to squeeze in extra hours of work between other obligations. “Those circumstances are not conducive to contemplation, are they?”

Companies may get more out of employees by not tethering them quite so strictly, she says. “If a person sitting in an airport turned his iPhone off, is it possible that during that time, because they were away and interrupted their routine, that they were able to be more creative?”

Daydreaming, she says, can generate ideas. CIOs may want to encourage other senior leaders to build in pockets of time for employees to clear away technology and data. “Many problems we resolve in our mind this way.”

Lead the Way

All sorts of technology variables affect one’s ability to make decisions. Too much light makes it harder for the brain to store mental images. Devices and applications that ring, beep and flash for our attention increase our stress. A screen with too many options may paralyze the thought process. No one’s talking about substituting chaise lounges and trickling fountains for laptops and analytics systems. But CIOs can and should get fellow senior executives talking about organizational behavior, says Perretta at State Street.

From his perch, the CIO can trace business outcomes back to how employees used technology to interact with data and with their colleagues to get that result. CIOs are the only ones to have that view, Perretta says, and are responsible for using it.

Helping fellow executives arrive at a common understanding of what actually happens inside an organization—not just what they want to happen—will make the company more productive, he says. “You have to commit real-time and do real work to address this.”

Gonick, at Case Western, concurs. CIOs need to lead. “The biggest challenge we have is privileging strategic thinking amid a constant overwhelming demand for action.”

Follow Senior Editor Kim S. Nash on Twitter: @knash99.