Order From Disorder

Entropy as commonly understood is a measure of disorder.  As the phase changes the entropy reduces. For example, ice has less entropy compared to water. The newer definition of Entropy is now changing from a measure of disorder to “Energy Dispersal”. This definition is very apt in the current Information Age. As we drive in the “Information highway”,we occasionally tend to get lost in its many byelanes. Our focus, ideas, goals tend to get dispersed in this journey. As individuals or individuals in corporates we generate brilliant ideas but many times it dies along the way. Let me explain it a bit more. Have you ever felt that you have a great idea and you “tweet” or share with your friends on “facebook” or you send an email to a colleague in office? In the vast clutter of web information, your idea gets sucked in bits and bytes and gets lost in the labyrinth of servers and storage….never to be heard of again. Ofcourse, not all the ideas generated may be brilliant but imagine if these ideas goes through an ideation process, gets nourished and delivered in its magnificent form? The individual gets his or her credit and humanity is much better for it.

 

 

Is Order from  Disorder possible? Is there a way  to channelize ideas to execution? Is there a way to churn these vast clutter of data in to meaningful information? This is precisely what some new age aspirants are attempting. Deriving Simplicity from Complexity is their goal. A company called Aikonlabs(www.aikonlabs.com) in India has developed an Idea Management application that channelizes the idea generated in the social media fabric and within the corporate network, pushes it through process gates, gets the idea validated through different stakeholders and gets the idea navigated through an execution cycle and collaborative space and voila! … you get a working model of the idea. The company is trying to prove that ideas can be weaved through the boundaries of Social Media, Academia and the high corporate walls without compromising intellectual property rights. At the same time they are also preventing ideas getting lost in the oblivion of bits and bytes.

 

Another interesting technology that is attempting to make meaning out of the disorder is enCapsa. When we sit within the four walls of a corporate, our only source of information is what comes from the corporate database. A database that is structured – of rows and columns. But in a large enterprise there can be numerous applications that stores the same data in their proprietary structure in different ways. For example “Customer Name” in one database could be “Account Name” in another database. It could be just “Name” in the email database. What about unstructured data flowing in from other sources aka social media? They do not even come under purview of the organizations today to know the business trend. As a matter of fact, many products are vilified or glorified in the lanes of twitter and facebook. If these information does not form the business intelligence input of the corporate analysis…ahem…they may not be even in tune with what the Gen ‘Y’ wants! In a nutshell, organization of today needs to integrate both structured and unstructured data to do a true analysis to arrive at Sales and Products strategies or to that matter even product design.  That’s what companies like enCapsa are trying to do – integrate the “boundary less” world to the four walls of the corporate.

Creating Order from Disorder is what these new trailblazers are up to…..

Distinction Bias

Imagine this. You are the CIO of a large bank and evaluating two leading CRM applications to implement in your bank. You have compared feature by feature of both the CRM applications and finally choose one as you believe it is more superior in quality, user interface etc. However, after implementing the CRM you are not so sure. You are not truly thrilled with your choice. Your satisfaction level is not what it is supposed to be. This happens with many of us, often. For example, when we compare the features of the car in the showroom with a similar model or the TV in the mall we see the superior features but when we use it standalone we are not able to see the features standout. Why does this happen?

Your decision to buy was influenced by comparing the dis-similar features with the other model. You may have taken a very different decision if you had seen each model separately! This is because evaluating the two models together brings out dissimilar features than when you are evaluating them separately.Behavioral scientists call this Distinction bias.

We make these kinds of decision all the time and often regret our decisions. For example, you may decide to change your job because it is not challenging enough. You get two job offers - one of N15 million and other of N18 million. You do a feature comparison and find that the N18 million is boring but better paying. The N15 million job will give you the challenge you were looking for.  Guess what?. You end up in the N18 million job! Few months down the line you regret your decision.

If you had just the N15 million job offer would you have taken it? Would you have been happy?

Imagine a different situation. You go to buy a shirt and see different shades. You finally pick two. You try each of them turn by turn – independently – and view yourself in front of the mirror in the changing room. You know exactly how you look in each of them and know precisely what to buy. What was the difference? Behavioral psychologists call them the “Single Evaluation” step. Experiments have shown that single evaluation steps are closer to your expectation and reality.

In case of the CIO, maybe if he had carried out the POC of the CRM on an individual basis, his choice could have been different and his satisfaction level much higher!

Fear of the Unknown

When I was working in India in the late 2008 the H1N1 Flu kept spreading. People were trying to get their hands on the N95 masks for their family. People used to store the phone numbers of various hospitals where they screen for H1N1 symptoms. Many were even contemplating to take Tamiflu tablets so that they are protected.

In January of 2012, when Nigeria went on strike as a protest against the petrol price hike, I observed that everyone was buying petrol as though there is no tomorrow! There were serpentine queues outside the filling stations including people with large jerry cans and buying petrol at outrageous prices.

Why do we do this?

Fear is a factor of risk and is predominantly driven by our perception of risk. As human beings, we tend to overreact when gripped by fear. That is, we consider something more risky than it actually is.

The recession which is a totally new experience for many of us has created a similar fear. The perceived risk here being - we may lose our job. Every economic news (be it national, international or organization) is analysed for its impact on our job at every possible opportunity. Our daily routine gets paralysed and we become a victim of the “Fear of the Unknown”.

Your Action

Resist your temptation to actively search for negative news or draw unwanted inferences from routine information.  Avoid those coffee table discussions in your office that invariably steers towards dip in sales in your organization, attrition, policy changes and how your job is on the chopping block etc. that would impact you negatively.

Hyperopia Effect

SHOULD YOU CONSUME TODAY OR CONSUME IN THE FUTURE?

Most of us would have had this feeling one time or the other.

We come across a “Sale” in a shop and see a nice shirt but restrain ourselves from spending because we feel that others would think we are “cheap”. We assure ourselves that it is money well saved for some future needs. After a few days we end up buying a similar by paying 20% more and regret our actions for not buying at the sale!

Think of another situation. You are planning for a vacation with your family 3 months in the future. With the oil prices increasing by the day you believe that the flight tickets would rocket in the next 3 months. You make a smart decision to book them now. Two months down the line you find that the price of air tickets have fallen more than 30% because of some OPEC agreement! You are kicking yourself for your decision to buy ahead of time!

The case is no different with managers.

Consider this. You are a well intending Project Manager and have been entrusted with a new project. You want to ensure project success and get more repeat orders from the customer. You are managing a Six months fixed priced project and want to maximize the project margin. Three months in to the project you realize that you need a specialist to manage the testing but you defer and induct a low cost resource, to maximize the margin. Very soon you realize that project timeline is going to overshoot as the new resource is incapable of handling the complexities. Result – The customer is unhappy and more resources are needed to correct the situation giving rise to more cost and much reduced margin!

Think of the other situation – Another project manager with a similar project wants to ensure that his project is successful and his customer his happy. He staffs top quality resources in his team. 3 Months down the line – though his project is cruising nicely he does not have any budget to continue!

Why does this happen?

Many of us tend to adopt strict measures today in anticipation of having a better tomorrow. In other cases we tend to overeat today because we plan to diet from tomorrow!

Behaviour scientists call this the hyperopia effect. This is opposite of myopia. It is so called because it comes when people look too far into the future while sacrificing the present. Behavior scientists also call this Saver’s remorse.

This of course does not mean that you should not save today but you should also not postpone your current consumption.

It simply means that one needs to strike the right balance between consuming today and consuming in the future.

Pygmalion Effect

A friend of mine who is a delivery unit head of a reputed IT organization was relating an interesting experience from his workplace. As a delivery unit head he mandated that each of his project team absorbs at least 4 campus recruits. He observed that the freshers allocated to one project manager always excelled and became quickly productive and billable compared to other projects. This happened repeatedly for couple of years.

My friend who is always in the lookout for such signals soon found out that the Project Manager in question always expected enhanced performance from the new college recruits rather than brand them as ‘Freshers’ who will take their time to learn. So why did this make them perform better?

According to Behavioral psychologists, greater the expectation placed upon people, better they perform. The effect is named after Pygmalion. Pygmalion is a self fulfilling prophecy. In this case, the Project Manager’s expectation was internalized by the new recruits and it reflected in their performance. In many cases, the new recruits are labeled as “non-billable resources” or “buffer resources” and leads to poor expectations and thereby poorer performance.

Not Invented Here

I recently met a client who had a telling observation. He remarked that in IT organizations, most supervisor works “one rung” lower. When asked to explain, he stated that most supervisors tend to hang on to their earlier roles, far too long. They believe that if they do not provide continuous oversight, the reporting person would not deliver to the desired outcome.

Why is it so difficult for supervisors to “let go” of their earlier responsibilities? Behavioral scientists link it to “Not Invented Here” syndrome. In other words, it is the unwillingness to adopt an idea or product because it originates from another person or culture. This practice of working down one rung lower continues until it reaches the lowest rung of the organization. 


The end result – inefficiency, dip in productivity and loss of accountability. 

Bandwagon Effect

Consider this. When the market was doing well in 2007, there was lot of attrition and IT professionals frequently jumped from one IT company to the other. If you had been a Project Manager during this time, you would have probably spent many hours trying to arrest the attrition or trying to figure out why your team members were quitting despite your best efforts. Similarly, around the same time engineering graduates from all streams were making a beeline for the IT industry. However, since the recession started the attrition had suddenly stopped and individuals are wary of taking up new jobs even if they are lucrative and so much so that fresh engineering graduates are not willing to touch the IT industry with a barge pole. Why does this happen?

Behavioral psychologists call this as “Bandwagon Effect”. This is the tendency to do or not do things because many other people believe or do the same. Psychologists attribute Bandwagon effect to our fear that we might otherwise do poorly relative to our peers.

Your Action

As a manager, you need to understand this Bandwagon Effect phenomenon and not suspect your management skills. During the “attrition season”, you can be selective in retaining your team members instead of trying to counsel and convince every member to stay put.