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I picked up a new book the other day, The Profit Impact of Business Intelligence, by Steve Williams and Nancy Williams (Morgan Kaufmann Publishers), and I have to say I’m barely into it and I’m impressed. The authors are not saying anything I didn’t already know, but their presentation is compelling, and will provide much useful material for presentation in my own workshops and projects.
The book uses numerous case studies to illustrate its thesis that BI, process engineering, and change management are interdependent and inseparable. For example, applying BI to customer relationship management forces a business to segment its customer base by high- and low-value customers, accord the segments different degrees of preferential treatment, and reorganize itself to facilitate this segmentation. It makes perfect economic sense, which I’m sure is a great comfort to the vast majority of us who fly coach and are treated like dirt.
Then this morning (April 4, 2007) the New York Times Business section featured a headline: “3400 Layoffs Send a Message to Millions”. The article discusses the dismissal by Circuit City of 3400 senior staffers for the sole reason that they make too much money, illustrating the shrinking “safety net” of the American worker. Unlike the downsizings that have taken place in American manufacturing in the past twenty years, these workers got screwed without even getting kissed. There was no buyout; no termination settlement; no continuation of benefits; no effort at job placement. In fact, these people even have to wait ten weeks to apply for their old jobs at lower pay. The reason for the move was the assertion that employee pay had risen with employee longevity, but productivity had not. Thus, the information allegedly prompted a corrective action to get rid of expensive senior employees and replace them with inexpensive new employees.
Back in the 1950s, many companies hired “efficiency experts” to try to tune business processes and improve profitability. Most of them were incompetent and did tremendous damage to both business operations and company reputations. Business Intelligence, as discussed by the Williams’s in their book, is in danger of a similar perception. It’s not that the idea is bad, but that the execution is subject to abuse. Suppose Circuit City management had already made up its mind to cut costs by replacing senior employees. Could the information from its BI systems be used to “prove” the disconnect between seniority and productivity? You bet it could!
I have always believed, and I still believe, that any project I engage in should leave everyone involved better off than they were before I came along. Change is inevitable, and ultimately for the good, and everyone should share in the good, because everyone shares in the cost. It may be that Circuit City had no other options than a massive layoff. Given the competitiveness and labor-intensive nature of the business, that is a possibility. But it looks to me as though the change management function was not very well thought out, if at all. (I can’t say anything about the process engineering.) If employees have to get pink slips, the business should make an effort to ease the pain, and the options for doing that should be considered in the decision process. In creating a BI system, the kinds of information needed to support such efforts, and the data sources that would feed it, should be taken into consideration against the time when they will be needed.
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