Topics of Interest Archives: Human Resources

Are Technology Predictions Any More Accurate than Tossing a Coin?

Implementation Fundamentals Coin FlipBlue Hill is conducting research on technology Implementation Fundamentals to better understand the factors that cause technology projects to fail or succeed. If you haven’t taken it, your answer to five questions will help us to identify the challenges that most often cause organizations to misunderstand the value of their investments.

This research is still ongoing, but a peek into the early results provides an observation about how well organizations are able to predict the impact of their technology investments (Figure 1). Fifty-four percent (54%) of study participants indicated that their most recent technology implementation met project goals. In other words, organizations are able to correctly forecast how an implementation will affect business a little more than half the time. That’s not much better than a “coin flip.”

 

Figure 1: Performance Impact of Most Recent Technology Implementation

Implementation Fundamentals Midpoint Review

Source: Blue Hill Research, November 2013

Encouragingly, in 71% of the cases, projects met or exceeded project goals. While these situations are generally better for the organization, they still constitute problems in investment planning. Even when results are better than expected, it indicates that the organization still misunderstood how the investment would affect performance. Of course, few will complain when an implementation provides more value than expected. Nonetheless, these sorts of misjudgments cause organizations to fail to properly allocate resources and priorities. Underestimating the impact of a solution also can result in decisions to forgo investment, causing organizations to miss opportunities.

The more concerning takeaway from Figure 1 is that when companies misjudge the impact of an implementation, the ultimate impact falls below the mark more often than above. Seventeen percent (17%) of implementations exceeded project goals. Just as often, the improvement falls below expectations. In another 12% of cases, the investment caused performance to worsen or made no change at all.

Blue Hill will return to these findings as it completes its Technology Fundamentals research. If these results remain consistent, they will paint a story about organizations’ ability to successfully predict the impact of technology. Any given investment has a roughly fifty-fifty chance of providing the value forecasted. This failure to predict accurately will mean one project in ten is a wholly wasted investment, with no impact or negative impact.

In part, this is not a problem of technology assessment, but project execution. The challenges that emerge in the course of an implementation can play a major role in eroding the impact of a deployment. As we complete our research, Blue Hill will isolate the most common challenges organizations encounter as well as the challenges that most often correlate to project failure.

 

 

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An HR Policy Couldn't Be Microsoft's Problem, Could It?

Microsoft Stack Ranking Vitality CurveEditors Note: On November 12th, 2013 Mary Jo Foley of ZDNet reported that Microsoft would be abandoning its internal stack ranking policy. The go forward policy will be one that focuses more on teamwork and collaboration in determining how employees are evaluated.

Since the year 2000 Microsoft has been characterized by product launch failures and a seeming inability to produce meaningful innovation. The stagnation is surprising considering Microsoft is a collection of some of the most talented individuals in technology.

This raises the possibility that the core of the issue is not unforeseeable external factors, but rather an internal structural problem. Could it be that a single HR policy is at the heart of Microsoft’s malaise? Is it possible that “stack ranking” is the culprit?

Microsoft’s stack ranking system is a derivation of the “vitality curve” popularized by Jack Welch during his time as CEO of General Electric. In practice, all employees are internally ranked in comparison to one another and broken into three buckets: the top 20%, the middle 70% and the bottom 10%. At the end of the year, employees in the bottom 10% are encouraged to improve their performance or take a severance package to leave. The theory behind the practice is that it promotes a culture of high-performers and helps a company to shed those who may be weighing it down.

An influential Vanity Fair article written in July 2012 presented the story of Microsoft’s internal stack ranking. It was portrayed as a system that turned employees on each other and fostered an environment where collaboration was discouraged and creativity was penalized. The interviews revealed a culture in which you walk into a room with 10 co-workers knowing that one would be evaluated as an “underachiever” no matter how good they were at their job. This implies that career progression is inordinately dependent on playing internal politics and broadcasting your accomplishments to your manager. Inevitably, incremental innovation that produces immediate results is encouraged at the expense of visionary creativity that may yield long-term gains.

Today’s Microsoft is radically different than the Microsoft of a decade ago. Windows and Office are no longer the sole focal point of the company. Today’s Microsoft has made bold leaps in its enterprise offerings for cloud and analytics solutions such as offerings of Office 365, Yammer, and Skype on the cloud side and the recent release of Power BI for Office 365. But more importantly, it has staked its claim in gaining consumer consciousness and mindshare.

Microsoft is filled with “A level talent,” but may not keep the right type of talent. The practice’s strength is to promote a specific skill set valued by the company. But the new Microsoft needs a variety of skill sets to be successful in its current ventures.

Microsoft’s historical key to success was in identifying ace programmers to develop Windows and Office. Inevitably, this laser focus brought certain skill to the top but let others such as product development and user experience be let go.  In other words, Microsoft and it’s stack ranking policy has inadvertently molded a workforce that is mismatched to handle its current challenges.

If you enjoyed this piece be sure to check out our full research report or accompanying slide show as  well

 

 

Posted in Blog, General Function, General Industry, Human Resources, Research | Tagged | Leave a comment

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