Monday, April 18, 2011

Is your Business Intelligent? The 4 modes of Intelligence.

Rightpoint's BI  practice aims to integrate several related notions of intelligence in business and other organizational contexts.  

Business Intelligence

Actively collecting, interpreting, and using vast quantities of complex data.

Organizational
Intelligence

Collaborative problem-solving between people and technical artifacts within and beyond complex enterprises.

Developmental
Intelligence

The capacity to acquire and use knowledge effectively for personal and organizational learning.

Existential
Intelligence

Authentic and flexible engagement with the demands of the environment - sometimes called Requisite Variety.

We have an intuitive idea of intelligence

In everyday life, we recognize people as intelligent by the way they speak and the way they act. Certainly not just by their facility in solving the simple puzzles set in IQ and Mensa tests.

An intelligent person has three things:

  • an exceptional ability to grasp complex information from the outside world,
  • an exceptional ability to respond appropriately to this information,
  • and an ability to learn quickly.

Organizations as well as people display degrees of intelligence

Some organizations are characterized by what can only be called crass stupidity. They fail to detect even the most obvious signals of change in their environment, and they fail to respond appropriately - or at all - to the most insistent demands from their stakeholders. They learn slowly, making the same mistakes repeatedly without any insight or understanding.

In contrast, some organizations display the same qualities that we can recognize in intelligent people:  

  • an eager and receptive curiosity,
  • a consistent but flexible set of responses (sometimes called 'requisite variety'),
  • and an ability to learn quickly.

Most organizations lie somewhere in between these two extremes.

Intelligence does not follow simple rules of arithmetic (2+2=4). So what are the rules governing intelligence?

Organizations contain many pieces of intelligence

An organization is a socio-technical system, and may be composed of many interoperating systems, each containing some intelligence. Thus the human intelligence of many employees is combined with the artificial intelligence of machines, contained in intelligent buildings, and distributed through intelligent cyberspace.

In a recent article in the New York Review, John Searle makes the point that when computers can beat grandmasters at chess, this does not prove that computers are now more intelligent than humans. "The real competition was not between Kasparov and the machine, but between Kasparov and a team of engineers and programmers."

As in Formula One racing, where the driver takes the credit for the work of a team, so Deep Blue took the credit for the work of a well-coordinated team of people and other machines. A Formula One driver does not need to be a creative thinker - that falls to other members of the team - but must have incredibly fast reactions. The same is true of a computer.

 

But lots of intelligent pieces doesn't add up to an intelligent organization

To make an intelligent organization, it isn't enough to recruit the brightest people, locate them in state-of-the-art office buildings, and provide them with the smartest computer tools and networks. Super-intelligent individuals are often poor at talking to one another and sharing knowledge, let alone coordinating their work effectively. Each individual may only make a given mistake once, but if the people don't talk to each other, the same mistake can be repeated hundreds of times without any organizational learning.

 And even if an organization is collectively oblivious to major threats and opportunities in its environment, that doesn't mean that the individual employees are unaware of these threats and opportunities. Intelligent people get very frustrated and demotivated in stupid organizations; they can see what is happening, and they can often see what needs to be done, but they don't have adequate channels of communication or action.

 Organizational intelligence is what systems thinkers call an emergent property - it is an attribute of the whole system, not of the individual parts. What matters most is how the parts of the organization are put together.

 

Perception
Monitoring

How well does the organization collect and process information about itself and its environment?

Appreciation
SenseMaking

How well does the organization interpret and understand itself and its environment?

Reasoning
Action

How effective are the (collective) processes of thinking, decisions, policy and action?

Knowledge
Memory

How does the organization retain experience in a useful and accessible form?

Learning

How does the organization develop and improve its knowledge, capabilities and processes?

Communication

How do people and groups exchange information and knowledge? How do they share

  Organizations can become more intelligent

We believe that improvements in organizational intelligence are generally both possible and desirable.

The benefits of such improvements are manifold. The organization is likely to become more successful in the short term, and have greater prospects for survival and growth in the longer term. Staff morale is likely to improve, and the individual employees will themselves have greater opportunities for personal growth and fulfilment. In the broader socio-economic system, intelligent organizations will create more wealth - not merely economic wealth but in human potential.

To increase intelligence: remove what stupefies an organization

As consultants concerned about organizational intelligence, we focus much of our attention on the opposite: organizational stupidity.

 Each organization has its own particular form of stupidity - it is up to the consultant (or the above-average manager) to recognize the ways that stupidity manifests itself and to find a way of doing something about it.

Stupidity is not making errors. Stupidity is repeating them.

Most people are born intelligent and creative. A lot of this intelligence and creativity gets lost by the time we leave school - but sometimes it can be rediscovered in later life. Thus the focus for personal development is not "How can I become more intelligent and creative?" but "How can I remove the blocks that get in the way of the intelligence and creativity that is buried within me?"

Psychoanalysts look at the hidden repetitions in a person's behavior and relationships.

Similarly, we can look at the barriers to intelligence and creativity in organizations. Here too, stupidity manifests itself in a repetition of some kind.

To improve organizational intelligence: different approaches, different styles, but the same underlying ideas

Organizational intelligence can be improved from several different angles, and you need to consider which the right starting point for your organization is. In some cases, an interdisciplinary approach will be appropriate, in which improvement action is taken on several fronts simultaneously. In other cases, a single discipline will be able to offer significant initial benefits - remaining open-minded about bringing in other disciplines later.
 

Communication
Strategies

Addresses the extent to which meanings and intentions are successfully shared across the organization, especially between multiple subcultures. Addresses the extent to which the organization is successful in speaking to its stakeholders, and in hearing what its stakeholders are saying to it.

Group
Dynamics

Addresses how people work together - the psychological structures and processes of the teams and groups making up the organization.

Knowledge
Management

Addresses how ideas, information and intellectual property are developed, disseminated and deployed within the organization.

Process
Improvement

Addresses the congruence (or lack of congruence) between business processes and the organization's goals and values. Addresses the extent to which business processes improvement is dependent upon external intervention, or whether learning is integrated into the system itself.

Risk
Management

Addresses the extent to which individuals and groups within the organization face up to (or retreat from) the challenges and uncertainties of the task.

Space
Management

Addresses the physical environment in which the organization lives. Addresses the congruence (or lack of congruence) between business processes and the physical space that contains them.

System Investment
and Evaluation

Addresses how the costs, benefits and risks of new and proposed technologies, systems and environments (including physical environments) are distributed within and outwit the organization. Addresses the congruence (or lack of congruence) between IT and property investment on the one hand, and the organization's goals and values on the other.

Technology
Management

Addresses how new technologies and systems are implemented and used by the organization. Addresses the congruence (or lack of congruence) between human systems and technical systems.