Data for execution: Holistic

People use mental maps to guide action. In turbulent markets, however, these maps quickly grow outdated. To update their maps as circumstances change, leaders need information that has four critical characteristics. My last three blogs have discussed the importance of real time, unfiltered, and shared data. This post argues that holistic data is critical to spot opportunities and threats in volatile markets.

Holistic data integrates information from multiple sources, functions, or perspectives to present a multifaceted picture of a situation.  At first glance, holistic and shared look like interchangeable attributes, but in fact they are distinct. Data can be shared without being holistic. A Korean automobile components maker, for example, posted manufacturing quality statistics throughout the company. Employees saw only part of the picture, however, because they lacked any financial, market, or competitive data. Conversely, data can be holistic without being shared, as when all information rises through functional silos and only the CEO sees the full picture.

Holistic data helps leaders grapple with complexity, defined as the number of variables that influence performance and potential interactions among these variables. By pulling together information from various perspectives, including different functions, geographies, and external data sources, leaders decrease the odds that they will be surprised by an events. Zara design team members collect sales statistics, financial data, marketing reports, and tidbits of information picked up in conversation with store managers. Designers keep a close eye on what is happening on the catwalks of Paris and New York, the music scene, movies, and television to glean hints about emerging fashions. They also look for patterns across different stores, regions, and countries that might signal a rising fad.

Integrating information from diverse sources can help people spot important interactions among variables that might not be obvious when viewing fragmented data. Consider Charles Joseph Minard’s famous flow map of Napoleon’s Russian campaign of 1812. Minard’s graph integrates cartography (the army’s advance towards and retreat from Moscow), troop strength (the width of the lines), and temperature at various stages of the campaign. The map provides a holistic picture of how the interaction between dwindling troop strength, stretched supply lines, and declining temperatures doomed Napoleon’s invasion.

Health care is a domain where narrow specialization can obstruct a holistic view. Patients often see a variety of health care professionals, including specialists, nurses, dietitians, physical therapists, and technicians. Viewing the patient through the narrow lens of their own discipline, specialists may prescribe drugs that interact in harmful ways with other drugs or dietary constraints a patient has. Such adverse drug events are common and often serious.

The Cleveland Clinic uses a single electronic medical record that integrates data from all health care professionals seeing a patient. The system flags potentially dangerous interactions among drugs, to alert specialists to possible adverse effects. The Cleveland Clinic also extends the system to the general practitioner who referred the patient to the hospital. The patient’s general practitioner can monitor his or her ongoing treatment online to resume follow-up care with an full understanding of the patient’s treatment history.

Prototypes can help teams achieve a holistic perspective on a situation. When discussing a potential opportunity, Zara design teams produce a paper blueprint, which the pattern department can convert into a fabric model the same day.  Teams will often ask a coworker to model the item, and convene an impromptu focus group of other colleagues to discuss how it looks. To help see the product from a customer’s perspective, the design team can go down to the basement, where Zara has a full-scale version of the store, matching actual stores right down to window displays, layout, and soundtrack. The team can talk through where to display the product and how it would interact with other items. These discussions allow the team to enrich the design, marketing and production data that they bring, with a sense of the customer’s perspective.

New technologies, such as virtual reality and three-dimensional graphics, create unprecedented opportunities to integrate disparate information into a holistic representation. In the late 1990′s, engineers at Norwegian oil and gas company Hydro (now StatoilHyrdro) began experimenting with virtual reality technology to integrate data from separate disciplines into a holistic representation of oil and gas fields. Within a few years, the team launched “the Cave,” a three dimensional model that could be explored simultaneoulsy by engineers and scientists working from different locations around the world.

The software integrates data from multiple sources and disciplines, including seismic surveys, well markers, ground samples, drilling data, and risk management models.  These data are combined into a single model, that is projected in a three-dimensional field measuring approximately 5 meters wide by 2 meters high by a few meters deep.  Engineers from various disciplines, geologists, and geophysicists don goggles before entering the well model.  As they move their head, the computer automatically updates their view, while they use a wand-like device to manipulate the graphic interface. Participants from other locations appear as avatars. The holistic representation serves as a meeting ground where employees from disparate disciplines converge to discuss a multi-faceted representation of the situation. The company also developed a scaled down version of the software for desktops, that could be used more widely within the organization.

Data that is real time, unfiltered, shared, and holistic can help managers update their mental map in turbulent markets.

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.