Henry Ford Management Style Doesn’t Work in Information Work

I had a chance to talk about managing collaboration on Thursday 30th May at Information Worker Productivity day. I presented a seven step model of successful collaboration management from information systems point of view (check the SlideShare presentation below). I want to highlight one of the themes discussed with the audience after the presentation. How to maximize the business benefits of enterprise social features and why Henry Ford management style doesn’t work when we are working with information?

Enterprise software, Microsoft Dynamics CRM and SharePoint for instance, include many social features but still the benefits of the features are not fully realized. Usually the root cause for inadequate business benefits is one of the following:

1) Platform capabilities are not connected to processes producing business value or
2) The management has not yet understood how to affect business results by managing interactions

Problem in point 1) is usually that the use of the technical capabilities software provides is not managed as a part of the business process. For example our CRM product, Virta (Flow), enables adding meeting notes as comments. If sales management decides that meeting notes must be added to the CRM after every business meeting and the new practice will be monitored in sales teams’ weekly meetings, customer knowledge will start to grow rapidly. This will increase exponentially the value the commenting feature generates.

Root cause in problem 2) is the change in the productive way of working. Many organizations still manage work according to the ideas of late Henry Ford. Management models which were effective in industrial work cannot be applied on “as is” basis on today’s information work. A car that moved on the production line connected workers’ efforts to each other and to the process generating value. It was easy to see by looking at the car if the previous guy had mounted the coachwork.

However, the information work era has multiplied the number of tasks, the “production lines” are scattered and the value chains of work differ from task to task. The sight of the information workers sitting in their cubes is not informative anymore because the manager cannot answer to the following questions just by looking at information workers at the office:

− what tasks are in the making?
− who is doing what?
− what is concretely being made?

When it comes to information work, the problem with Ford’s ideas is that neither the actions required nor the quality differences of the actions are understood. Thus it is impossible to understand how different actions generate results. KPIs are typically on tactical or strategic level and highlight only the results achieved last week, month or year. They do not help management to take corrective actions or encourage desired actions. The most advanced organizations measure the number of key actions but the quality aspects are not monitored on task level.

Quantitative analysis of actions can be applied to both number of actions required and the quality of them. This will help management to organize work and give feedback. The trick is that the significance of the interactions between information workers and interactions across company borders must be understood. The results of this kind of analysis give us insight into what interactions should be managed and how. For example, we found out in one of our customer projects that the amount of times an offer was modified in CRM explained largely the number of sales closed. Based on this observation a sales model was deployed which ensured enough sales activities during the sales project. This allowed the management to monitor the quality of sales communication by adjusting the forecasting model and studying how the coefficient of determination develops.

The role of the information system in information work is to make it as easy as possible to input and utilize data. Results can only be achieved if it has been made sure that enough activities are being carried out and that these activities are of sufficient quality.