Data for execution: Shared

Execution begins with a mental map to guide action, but these maps represent the underlying competitive terrain imperfectly.  Turbulence, moreover, renders once useful maps outdated as market conditions shift. Leaders must update their mental map as circumstances change. They require the right type of data to do so, which I refer to as RUSH data-i.e., real time, unfiltered, shared, and holistic. My recent posts have analyzed real time and unfiltered information, and this one discusses shared data.

Data is shared to the extent employees throughout the organization have access to the same data. In many organizations, information is fragmented rather than shared, with different functions, geographies, or individual managers holding pieces of the puzzle.  Some level of fragmentation is necessary–functional experts in R&D or finance should track specialized indicators, parcelling reduces data overload, and sensitive information must stay secret. But other factors fragment data beyond the optimal level, as when legacy IT systems communicate poorly with one another or managers horde information to protect their power base.

Fragmented data prevents people from updating their mental maps as circumstances change. Fragmentation breeds misunderstandings based on divergent data, an inability to see the big picture, and suspicions of hidden agendas. Broadly shared data, in contrast, can help employees achieve shared situation awareness, defined as a group’s ability to formulate a common mental map and update it as circumstances change. Different terms describe shared situation awareness–an improvisational comedy group can achieve “group mind,” a basketball team display “court sense,” or a jazz ensemble find itself “in the groove.” In every case, the term refers to a group’s capacity to update their shared map on an ongoing basis.

Mica Endsley pioneered the study of situation awareness and documented it’s importance for a group’s performance. Dr Endsley and her colleagues have analyzed, for example, how air traffic controllers and pilots maintain a fluid view of an unfolding situation. They studied commercial air disasters involving human errors, and found that nearly 90% arose from failures in situation awareness. Flight crews and air traffic controllers took the appropriate action based on the mental map they were using–unfortunately their map did not accurately represent the situation at hand. They took the right actions for the wrong map.

Providing everyone with the same information is an important first step in sharing data, but organizations can take further actions to help teams achieve shared situation awareness. Co-locating teams in the same place allows them to  interact on an ongoing basis, share information freely, talk through what the data mean, and update their mental map on an ongoing basis. Zara has broken with industry convention to co-locate marketing managers, designers, and production specialists together in the retailer’s La Coruna headquarters. The Gap, in contrast, disperses its designers in New York, marketing managers in San Francisco, and prototype production in Asia. Co-location promotes data sharing.

An open office design can also help employees translate common data into shared situation awareness.  Members of Zara’s cross-functional design teams work in one of three rectangular halls, one each for womens’, mens’, and childrens’ clothing. There are no enclosed offices anywhere.  Frequent discussions, overheard snippets of conversation, and visual observation of who is working on what help employees intuit the overall market situation and understand how their own work fits into the bigger picture. Segregating employees by silos, in contrast, promotes data fragmentation.

Sharing data is more complicated when groups are distributed. Zara has over 1,300 stores in 72 countries around the world. As Professor Andrew McAfee argues in a recent post, companies must decide what information is relevant to share. Organizations must also provide employees with incentives to share relevant information. Zara has tackled both of these problems using a market system.  Twice each week, the the design team in headquarters sends store managers an offer, including various items, colors and sizes. Store managers select the items that they think will sell the best in their own stores. By placing their orders, the store managers share only the most relevant data–their best guess as to which items will sell. They do not share all the observations, discussions, and analysis that informed their intuition. The internal market provides Zara store managers with strong incentives to share information. Their personal bonus is closely linked to year-on-year revenue growth in their store, and ordering items that sell help them to drive local sales.

My next post will complete the discussion of RUSH data by arguing the importance of holistic information.

Leading in turbulent times

This blog is no longer active but it remains open as an archive.

Don Sull is professor of management practice in strategic and international management, and faculty director of executive education at London Business School. This blog is dedicated to helping entrepreneurs, managers, and outside directors to lead more effectively in a turbulent world.

Over the past decade, Prof Sull has studied volatile industries including telecommunications, airlines, fast fashion, and information technology, as well as turbulent countries including Brazil and China, and found specific behaviours that consistently differentiate more, and less, successful firms. His conclusion is that actions, not an individual’s traits, increase the odds of success in turbulent markets, and these actions can be learned.