That bad data in the C-suite? It's all Maslow's fault

Few would ever argue that data is a critical part of business.  "If you can't measure it, you can't manage it" is one of the most common refrains.

But if that is true, why is there such a high rate of failed and abandoned projects? Why do seemingly well-run businesses get caught unaware when the believed-to-be-good numbers fall away to reveal corporate crisis?

There was a time when I hoped to change the world by working in university student services.  The central idea of that profession is that students learn much more in college than what is taught in the classroom--that schools have a duty to maximize learning through the student's experience in housing, activities, recreation, campus health care, and career planning.  I came within a few course hours of completing a master's degree in Student Personnel, the formal name for the field. The academic study includes a lot of human development theory, especially the ideas of American psychologist Abraham Maslow.

Maslow's hierarchy of needs. (Source: Wikipedia)

Put simply, Maslow said that humans have a hierarchy of needs; if basic needs like food, shelter, and safety are not met, people are unlikely to seek out higher needs like achievement and self-actualization.  The ordered list looks like a pyramid.

We can also look at Maslow in other contexts.  In that sense, his theories quickly begin to reflect our worklives, and the dynamics of organizations.  Basic employment is a foundation need.  But one level from the top are self-esteem, sense of achievement, and respect--by and for others.  Those are critical elements of a high-achieving business, but much of what people experience at work is different.  The same dynamics that lead to all the internal corporate fiefdoms, to the proliferation of administrative levels, and the big change management issues are firmly rooted in Maslow.

The Maslow pyramid for many corporations looks more like this:

Back to the headline of this story: I contend that a good part of your inability to get good data is that your culture operates at the bottom levels of the business pyramid far more often than it does at the top.  Because reporting data with other than good news represents a risk--taking a chance--there is a built-in bias toward data giving you a false positive on good news.

In "American Icon," his excellent 2012 book on Alan Mulally and the turnaround of Ford Motor Company, Bryce Hoffman tells the story of one of Mulally's first breakthroughs, getting his executives to report bad news.

The entire exec team met weekly to look at company performance.  Mulally's system used a simple green-yellow-red color coding on each VP's report slides, but week after week, nothing but green appeared.

Hoffman continues: "By October 26 (of 2006,) Mulally had seen enough. He stopped the meeting halfway through.
'We're going to lose billions of dollars this year,' he said, eyeing each executive in turn. 'Is there anything that's not going well here?'
Nobody answered.
That was because nobody believed Mulally when he promised that honesty would not be penalized.  In the past, high-level meetings were arenas for mortal combat at Ford. Executives entered the room with keen eyes, searching for flaws in one another's plans. They examined their own presentations beforehand like generals surveying their lines for weak points. They were sure Mullaly was trying to set them up, and none of them was foolish enough to fall for such an obvious trap."

I'll skip to the conclusion, someone had to take a chance.  It turned out to be Mark Fields, the VP in charge of North America.  The new Ford Edge had experienced a potential problem, just days before it was supposed to ship to dealers as a brand new model.  Fields reluctantly decided to hold the new model launch. And he decided to honestly report a red dot on his report for the upcoming executive meeting.

Hoffman describes how that played out: "As his turn approached the next day, Fields figured he had a fifty-fifty chance of walking out of the room with his job. By now, he assumed there was a good chance he was going to lose it anyway.
Somebody has to figure out if this guy is for real, he thought as he studied Mulally, trying to divine his mood. If I go out, it might as well be in a blaze of glory.
Fields began his overview of the business environment in the Americas. He called for the slide showing the region's financials. Then there it was--the product program slide.  Fields tried to be nonchalant.
'And on the Edge launch, we're red. You can see it there,' he said, pointing at the screen. 'We're holding the launch.'
There was dead silence. Everyone turned toward Fields. So did Mulally, who was sitting next to him.
Dead man walking, thought one of his peers.
I wonder who will get the Americas, another mused.
Suddenly, someone started clapping.  It was Mulally"

Ford went on to survive the economic crash of 2008 without declaring bankruptcy, and without a government loan. They went from a $12.7B loss in 2006 to break even in 2009; in 2015, Ford reported a record $10.8B profit.  Mark Fields succeeded Mulally and is now the CEO of Ford.

I think there are several good lessons here.  First, even if you are measuring the right things, there is a chance that the Maslow effect is giving you incomplete or inaccurate data.  Second, your enterprise success may depend on Maslow and others in areas not usually thought of as business drivers .

It's difficult to overstate the importance of executive leadership in creating a safe place for bad news, because the issues you don't see are the issues you can't address.  Whether you lead a department, a division, or an entire company, that culture flourishes top-down.  "Garbage in, garbage out" is a metrics maxim.  And it applies to leadership as well.

Change that culture, and Maslow will know you have risen to the top of the pyramid.

The value of subjective data, and how Google used it to build successful teams: NYT story and comment

I've argued before that subjective information is among the most important measurements of the success of emerging technology research, and that you can add subjective data into a metrics stream by assigning number values to subjective ideas.  It's a great concept, one that is not often given much weight in enterprise metrics.

I recently hurt my back at the gym, and got a referral to see an orthopedist.  Among the very first things in our discussion was the question, "how much does it hurt on a scale from one to ten?"  "Well, it's an 8 when I have a back spasm, but just sitting here right now talking with you, I'd say it's a 2 or 3," was my answer. That discussion is a practical demonstration of applying hard numbers to subjective feelings as a way to benchmark them.  It's not touchy-feely at all, and it's surprisingly practical.

image from the NYT article

And in that conversation, we have an important lesson about the way we measure performance within our enterprises, and how Google applied numeric values to subjective data to find out why some teams succeed and others don't.

After exhaustive number crunching about teams that worked really well, one of the main findings was that all team members need to have a sense of what they call "psychological safety" within the team.  In successful, high-performing teams, all members feel safe to offer any contribution without fear of ridicule or reprisal.

Here is the article:

NYT: Google research on subjective metrics and successful teams

Here is a brief excerpt:  ‘‘ By adopting the data-driven approach of Silicon Valley, Project Aristotle has encouraged emotional conversations and discussions of norms among people who might otherwise be uncomfortable talking about how they feel.  "Googlers love data,’’  (Google manager, Matt) Sakaguchi told me. But it’s not only Google that loves numbers, or Silicon Valley that shies away from emotional conversations. Most work­places do. ‘‘By putting things like empathy and sensitivity into charts and data reports, it makes them easier to talk about,’’ Sakaguchi told me. ‘‘It’s easier to talk about our feelings when we can point to a number.’

"The data helped me feel safe enough to do what I thought was right,’’  is the concluding quote in the NYT story.

Let's take this away from the idea of just talking about feelings.  As Google's research bears out, feelings turn out to have measurable value for enterprise success.  But the goal to get value-add from subjective data goes much farther.  When it comes to perceiving nuance and big picture--as opposed to big data--there is still no more powerful computer on earth than the human brain, and you have them in your organization in abundance.  Unfortunately, because it's tougher to report nuance as a hard number, it's relegated to the "subjective, hence unimportant" bin.

We already have historical evidence of subjective input outperforming choices based upon pure datasets: crowdsourced stock predictions.

Here is a practical example of measuring subjective data in business.  At each stagegate of your projects, ask participants to report their sense of the project: "on a scale of one to ten, how do you feel about this project's likelihood of success?"  A caveat, though: unless you have made giving an opinion openly a safe thing to do*, the data you receive is likely to be highly biased.  Anonymity through a third-party survey site might be in order.  Average the results, chart it over time against your other KPIs for the project, and I don't think it will take very long to get a very useful Project Health Index that you can benchmark against variables within the project management, and against other projects.  That is an early warning system, a business metric you can take to the bank.

By the way, my back is doing better.  Occasional incidents of a 5 or so, but the trend is good.



*The whole topic of "safety in reporting" is profoundly important to business metrics. I'm at work on a subsequent article on the idea, and will report steps former Ford CEO Alan Mulally took to change the fear culture that used to permeate Ford.