In this paper, Eisenhart studies how organizations make fast strategic decisions and argues for why fast decisions are better for organizations. She establishes the following:

1)      Fast decision-makers use more, not less information

2)      Fast decision-makers develop more alternatives

3)      Centralized decision-making is not necessarily fast

4)      Layered advice emphasizing advice from experienced counselors is fast

5)      Conflict resolution is critical to decision speed moreso than conflicts themselves

6)      Integrations among strategic decisions and between strategy and tactics speeds the process.

 Overall, faster decisions lead to better performance. By helping to promoting good patterns of interaction and creating an environment in which it’s easier to overcome psychological and emotional barriers to effective decision making.

As for links to my project, the anecdotes in this paper about how strategic decisions are made are useful, particularly the areas discussing the importance of immersion in real time information and the emphasis on real time communication. To me, that suggests that decision makers should spend at least some time observing users and adding access to qualitative data to the quantitative data sources mentioned in the paper.

Eisenhart, Kathleen. “Making fast strategic decisions in high velocity environments.” Academy of Management Journal. 32.3 (1998): 543-576.

Hickson, butler, gray, Mallory & Wilson, 1986 – differentiating strategic decisions

Article addresses two main areas:

1)      How are fast decisions made?

2)      What is the relationship between decision speed and performance

Set of arguments/propositions (543):

1)      Fast decision-makers use more, not less information

2)      Fast decision-makers develop more alternatives

3)      Centralized decision-making is not necessarily fast

4)      Layered advice emphasizing advice from experienced counselors is fast

5)      Conflict resolution is critical to decision speed moreso than conflicts themselves

6)      Integrations among strategic decisions and between strategy and tactics speeds the process

Overall, faster decisions lead to better performance.

Current (incorrect) hypotheses (545):

1)      Comprehensiveness slows decision-making

2)      Centralized decision-making is faster

3)      Limiting conflict speeds decisions

Methods

Interviews in questionnaires with informants from CEO level down in eight organizations.

Findings

1)      Fast strategic decision-making is associated with using lots of real-time, quantitative information (554)

a.       For example: regular operations meetings, cash flow, inventory, competitors moves

b.      Preference for real-time communication via face to face or email

This is likely because real-time information makes issue identification quicker, helps develop pattern recognition skills/intuition and helps decision-making groups practice responding to information as a group.

2)      Orgs that evaluate many alternatives tend to evaluate many simultaneously, which is faster, while firms that evaluate few tend to do them sequentially, which is slower (556)

This is faster because comparing alternatives helps emphasize their strengths and weaknesses,  reduces the psychological stakes involved in each option and provides quick fallback options if any one plan fails.

3)      Centralized decision-making processes are not necessarily faster – two tiered advice process with wide range of inputs and reliance on experienced confidantes speed process.

The presence of wide range of advice and confidantes/counselors helps reduce the informational and psychological barriers to making a decision.

4)      The best process for dealing with conflicts is “consensus with qualification”: the decision-making team tries to reach a consensus but if none is quickly forthcoming, the leader makes an executive decision.

This is much faster and better than developing a consensus, which takes a long time and often only happens with opponents leave, letting external deadlines drive strategic decisions, or just not consulting with a team at all.

5)      Decisions are made faster when they are made in the context of other decisions – ie. an overall strategy with plans of action and fallback plans.

Concretely planning out a strategy makes it easier to analyze the pros and cons. Psychologically helps cope with the stress of uncertainty.

6)      Fast decisions is better

a.       Fast decisions promote learning

b.      You get left behind if you don’t make fast decisions

Implications

1)      Patterns of interaction are more important, such as:

a.       Being continually updated with real-time information

b.      Group decision-making

c.       Fast decision making helps overcome cognitive and emotional barriers

I finally finished reading this paper on strategy from HBR. I’m not quite sure how it ties into my project yet — it seems to me like user research could help inform any of the strategies for dealing with uncertainty listed.

In the paper, the authors basically classify the degrees of uncertainty in business situations and outline the appropriate strategic responses. They then address the impact of some of the strategic postures and actions on the different levels of uncertainty. Summary follows after the jump.

Courtney, Hugh; Kirkland, Jane; Viguerie, Patrick. “Strategy under uncertainty.” Harvard Business Review. (Nov.-Dec. 1997): 67-79.

Courtney, Hugh; Kirkland, Jane; Viguerie, Patrick. “Strategy under uncertainty.” Harvard Business Review. (Nov.-Dec. 1997): 67-79.

n      Traditional strategic decision-making processes that rely on financial models breakdown in periods of uncertainty, when the necessary precision isn’t possible (68)

n      Types of uncertainty:

o       Knowable unknowns, ie. performance attributes for new technology, elasticity of demand for certain products

o       Unknownable unknowns/“residual uncertainty,” ie. outcome of standards body

n      Four levels of residual uncertainty:

o       Clear enough future

§         Degree of uncertainty: There is residual uncertainty, but it’s irrelevant to strategic decision-making

§         Strategic toolkit: “Traditional” strategy toolkit

§         Example: Strategy against a low-cost airline

o       Alternate futures

§         Degree of uncertainty: Possible futures limited to two or few possibilities

§         Strategic toolkit: Decision analysis, Option valuation models, game theory

§         Example: Betamax vs. VHS

o       Range of futures

§         Degree of uncertainty: Possible futures constrained by few variables, but outcomes rest on a continuum between extremes

§         Strategic toolkit: Latent demand analysis, technology forecasting, scenario planning

§         Example: Working in an emerging market

o       True ambiguity

§         Degree of uncertainty: No basis to forecast the future

§         Analytic tools: Analogies, pattern recognition

§         Example: Emerging markets

User research can be used to inform the various types of analysis.

Different strategic postures companies can adopt(74)t:

n      Shaping the future

n      Adapting to the future

n      Reserving the right to play

Types of strategic actions (75):

n      No regrets moves

o       Ie. Google buying YouTube

n      Options

o       Ie. joint ventures, increasing capacity: Microsoft investing in Facebook

n      Big bets

o       Ie. large acquisition or capital investment: Sony on Blu-Ray

Different strategic postures have different impacts at different levels of uncertainty. Shapers increase uncertainty in level 1 situations (FedEx introducing overnight delivery) while trying to decrease it in levels 2-4 by imposing their order on the world.

I’ve spent the last couple weeks looking for good strategy papers to read, and have identified a couple that I will have up in the next couple days:

Strategy Under Uncertainty by Courtney, Kirkland and Viguerie and Making Fast Strategic Decisions by Eisenhart.

The MIT OpenCourseWare site for the Sloan School of Management  has been a great resource in finding readings.

Additionally, I had a good talk with Coye today, which helped flesh out a framework for my paper going forward:

• Based on the criteria established in Hargadon, classify the data generated by user research into tacit and explicit
• Based on further reading of the strategy literature, identify which pieces might be most useful to making strategic decisions
• Combining those two things should have interesting/useful implications for how to transfer user research insights to strategic decisionmakers.

I’m planning on interviewing practitioners to glean insight into the first, which should be the bulk of the field work. I’m less optimistic about getting enough meaningful access to strategic decision makers/have the time to meaingfully interview them in the time frame.

Also, I’m hoping to speak with Prof. Jenna Burrell, our qualitative research person here, about scoping my interviews tomorrow.

Having read that series of papers, I feel like a fruitful avenue of research would be applying the knowledge management framework to the question of how user research insights can better inform strategic decisions.

A study of the type of “knowledge” user research insights represents could help flesh out the shape of how to best share those insights. Are user research insights fully encoded in interviews and reports or do they exist more fully as tacit knowledge in the heads of user researchers. When working at Bolt Peters, one thing we found anecdotally was that clients who sat in and observed user testing sessions were better partners, seemed more receptive  to our recommendations and in general seemed to “get it.” On the other hand, the process, in my experience, definitely generates its share of documents.

If user research is tacit, then that would imply, based on the Hanson and Haas paper on knowledge management,  that such information would:

• Need to be shared through personal interaction
• Would impact the quality of work done — in this case the quality of strategic decisions made
• Barriers that would have to be overcome are:
  • Tacitness of knowledge: in this case leading to difficulty in transfer, since it must be transfered via personal interaction
  • Limited absorptive capability by receiver: manager jokes aside, there is probably a limit on the amount of tacit knowledge that can be passed. Might this be a theoretical justification for having decision-makers regularly rub shoulders with their customers or, more modernly, sit in on or directly view ethnographic-type interviews?
  • Lack of trust between receiver and provider

It will be interesting to try to do some research in a company with this perspective in mind.

Hoffman, James; Hoelscher, Mark; Sheriff, Karma. “Social capital, knowledge management, and sustained superior performace.” Journal of Knowledge Management. 9.3 (2005): 93-100.

This paper was not as relevant to my research, and seemed to be more of an overview of social capital/network theory. At the risk of being snarky, it reminded me of a certain riff on business plans.

Phase 1: Gather social capital.

Phase 2: Knowledge management improves.

Phase 3: Economic rents!!!

Hargadon, Andrew. “Brokering knowledge: Linking learning and innovation.” Research in Organizational Behavior. 24 (2002): 41-85.

 This was a pretty interesting paper.

Central question: Why is it so hard for organizations to learn from their experience and then forget that knowledge when faced with a new environment. 

The punchline is that innovation is basically made possible by distinct domains of knowledge and is the process of applying knowledge from one domain in another, potentially rearranging said knowledge in the process.  If you’re lucky enough to be a “knowledge broker” who interacts with many different domains, you win!

Implications for my research: (Ethnographic) user research helps identify the other domains that are relevant and not necessarily obvious.

 More detailed notes after the jump.

n      Def: Innovation is the application of old knowledge in a new context. (44) Innovation is situated in our society, which is quite fragmented into small domains of knowledge, which enhances the ability of knowledge brokers between domains to innovate. (44)

n      Innovation alone is not enough – a community must emerge around the innovation, building redundant ties between the knowledge’s old context and new context.  (45)

o       Example: Design Continuum – Bringing together knowledge of splints and IVs for Reebok to create the Reebok Pump.

n      Model from innovation to learning: Access => Bridging => Learning => Linking => Building (49)

o       Accessing domain knowledge, bringing it into the organization, applying it in a different domain and then building more links to build a new knowledge community around the innovation.

n      Revolutionary innovations often come from evolutionary combinations (51)

o       Their “revolutionary” nature derives from their impact, not their origin

o       Example: Ford mass production – revolutionary innovation combining four existing technologies: interchangeable parts, assembly line, continuous-flow production and the electric motor

n      Lots more examples/anecdotes that relate the same idea, including but certainly not limited to:

o       Thomas Edison turning a rapid telegraphing device into the mimeograph pen which later because the basis for the design of tattoo pens (56)

o       Edison’s stock ticker design being applied to a fire alarm design (56)

o       Design Continuum combining electric pump and battery from toy squirt gun to emergency room pulsed lavage (63)

n      Many innovations are developed collectively/interactively rather than individually, and explicitly NOT through accessing codified knowledge and electronic databases. (67)

o       Specific supporting quotes from HP, Anderson and Design Continuum

n      Best practices (73):

o       diversity in organization, diversity in location = access to more knowledge domains

o       team orientation – bringing the solution together rather than coming up with it yourself

o       continuing to foster dense networks while growing larter

o       maintaining incentives for people to share knowledge – avoiding pressure for “efficiency”

So it’s been a month, but I finally finished reading this article.

The cite: Haas, Martin and Hansen, Morten. “Different knowledge, different benefits: toward a productivity perspective on knowledge sharing in organizations.” Strategic Management Journal. 28.11 (2007): 1133-1153.

The punchline

• Different kinds of knowledge have different impacts on knowledge worker productivity:
  • Electronic documents, generally providing codified knowledge, help save time but don’t improve work quality
    
  • Personal advice, generally providing tacit knowledge, help improve quality but don’t necessarily save time due to the time associated with getting and capturing it
• Cost of acquiring and processing knowledge means that more knowledge sharing isn’t always better

Implications for my thesis

• What types of knowledge is generated by user research, tacit or codified?
• What processes are used to share knowledge about user research from researchers to strategic decision-makers?

More after the jump.

Framework of evaluation

n Barriers to knowledge transfer (3) :

o Knowledge tacitness

o Limited absorptive capability by receivers

o Lack of trust between providers and receivers

n Knowledge sharing evaluated based on process and quality:

o Two processes for knowledge transfer/sharing evaluated(6):

§ Person to person. Can include email, telephone, etc. Good for tacit knowledge.

§ Electronic documents.

o Quality defined as: “rigor, soundness, and insight of the knowledge irrespective of the task at hand” (7)

n Impact of knowledge transfer measured along three axes (8)

o Time saved by using knowledge (important for service oriented businesses)

o Quality of work output. Def: “extent to which the output of a [knowledge] task meets or exceeds the expectations of those who receive or use it”

o Signal of competence: Make other people think you are competent

Hypotheses

n H1: “Electronic document quality reduces the amount of time a focal team spends on a task, while document rework increases it.” (12)

o Personal advice is potentially useful but takes time to process and requires investment in relationships, etc., making its time effectiveness questionable

o Hypothesis confirmed by data

n H2: “Advisors’ experience improves a focal team’s work quality, while their lack of effort decreases it.” (14)

o Personal advice from relevant sources is generally good only if the source is experienced, but takes time to process. The quality also depends on the source’s willingness to help you.

o Because it takes time to process, there is a cost associated with the benefit, and more doesn’t always equal better

o Hypothesis confirmed by data

n Electronic documents are likely to only impact time saved, while personal advice should only impact work quality. (!5)

o In the framework of a sales proposal, electronic documents are likely to provide background info and data which saves time, but only indirectly impacts quality.

o Hypothesis confirmed by data

n H3: “Advisors’ experience improves the signaling of competencies, while their lack of effort decreases it.” (17)

o It’s possible that too much effort by advisors will also make the team seem incompetent

§ This part not confirmed by data

o Electronic document usage unlikely to effect signally, as it is not visible to clients

o Hypothesis confirmed by data other than aforementioned part

Data and methods

n Studied ad hoc sales teams at a large management consulting company

o 30 interviews

o Surveyed team leaders of 259 recent bids

Cite:

Hargadon, Andrew and Fanelli, Angelo. “Action and Possibility: Reconciling Dual Perspectives of Knowledge in Organizations.” Organization Science 13.3 (2002): 290-302.

So this article turned out to be pretty interesting. The 50,000 ft. view is that this paper explores the dichotomy of two different models of knowledge management in organizations: organizational learning and innovation. Without getting too much into it, organizational learning deals with the idea that individual experiences and expertise become encoded into knowledge in the form of work practices, artifacts, etc. These then serve to constrain potential future behavior. Whereas in innovation, latent knowledge is combined or applied in novel ways that generate new possibilities.

The punch line is that the two modes complement each other: learning is necessary to develop the latent knowledge that precedes innovation. Luckily, the paper also explores ways that knowledge might be learned by organizations and then applied innovatively.

The obvious application to my project is that user research data is obviously present in many of the organizations I hope to study — but how to propagate those insights through organizations in such a way that they can impact decision-making? Or to put it in more concrete terms: If some people designing a web experience have important insights regarding their users with strategic implications, how does that actually translate into the decision-makers in a company making the right decision?

After exploring a couple short case studies about how IDEO and Design Continuum innovate, here are their some of their best practices:

1. Force people to work across different domains so they don’t become set in their ways.
   

   Repetitive cycles of interaction generate alignment between what people believe possible and confirmation of these beliefs in the actions (and sanctions) of others. Firms like IDEO and Design Continuum, by the variation in experiences faced by organizational members, avoid the cycle of action and experience that might rectify similar knowledge in other organizations.

2. Knowledge passes socially:
   

   The recursive processes of knowing become social when the knowledge manifested in one individual’s action, by becoming a social artifact, shapes another individual’s schema. Orr’s (1996) description of copier technicians provides a rich example of how this cycle of action and interaction create (relatively) shared understandings about possible actions (scripts), desired ends (goals), and identities. In particular, the storytelling that occurs between technicians while “, and the stories that the technicians tell circulate that knowledge” (Orr 1996, p. 5). It may appear semantic, but in this sense “shared knowledge” refers not to knowledge that is commonly held (meaning identical) across technicians but rather knowledge that has been shared between technicians—knowledge made empirical through the generation of social artifacts, in this case stories, and made latent again through each individual’s interpretation of those stories (300)

3. Isolate people from existing schemas so that they can forge their own.
   

   Other strategies for managing innovation, for example, focus less on providing a diverse set of experiences—shaping the empirical knowledge that is available—and more on directly changing the goals or identities of the participants to enable them to see new possibilities. Lockheed’s Skunkworks and Apple’s Macintosh team are famous examples of new product development teams that have been isolated from the past practices, values, and expectations of the old organization and given new and different goals and identities for acting. (300)

4. Cross-functional teams
   

   Conversely, Leonard-Barton (1995) describes a strategy of “creative abrasion,” which exploits the inherent differences based on the schemas, goals, and identities of different functional groups within an organization. This strategy generates novel actions by forcing interactions between diverse organizational members to elicit confrontation (and creative resolution) of their otherwise different perspectives on the world. Both of these strategies assume that the answers, in the form of latent knowledge, already reside to a large extent within the organization. (300)

One and three seem to be ways in which individuals within an organization can learn new things/innovate, while two and four seem more geared toward spreading those insights through an organization (not to be too simplistic or anything…). None of this is particularly earth shattering, but it’s good to have some documented cites.

I did a Google Scholar and Harvard Business School search for Roger Martin’s work, and most of it doesn’t seem directly relevant to my work. His most cited stuff seems to be about the ROI on corporate responsibility, which is interesting but not too helpful. There are a couple other articles on things like how leaders think and conflicts of interest for board members.

Yesterday I met with Coye and chatted with him about my project, then drove down to San Mateo to meet with Conrad Wai of Jump Associates.

My Coye meeting was productive, though I did not quite get the list of readings I was (perhaps unreasonably) hoping to walk away from the meeting from. He pointed out that since I’m writing a paper on limited time, considering the entire strategic decision-making process(es) of an organization might be too broad, and encouraged me to focus on perhaps strategic decision-making around the creation of web experiences. That sounds like a pretty good idea and I think I’m going to run with that for now. He did recommend Andy Powell (I think), which I will try to track down. And recommended that I schedule a time with Anno.

My meeting with Conrad was also very productive. He seems interested in my project. One of the things he did that was helpful was break up my work into three general areas (which I may have to narrow down in the future):

1) Organizational theory – Why orgs are the way they are, how are they, how do they manage networks of innovation, etc.

2) User research – This is basically the CHI community perspective on things.

3) Design – How to design good experiences.

Actually, now I’m not sure if design is the third one, but it was useful to break it up. He also seems visual, and a doodle he made in his notebook strikes me as a good touchstone for my project:

(drawing of a web site): “Why do I suck?”

I think if I stay grounded in trying to explore the larger reasons websites suck, that will lead to interesting findings that go beyond the typical HCI griping about not having enough say in the org.

He also left me with a more well fleshed out set of stuff to read, which is helpful:
Andy Hargadon, UC Davis
ACM Interactions for the HCI “insider’s” perspective
Harvard Business Review, in particular Roger Martin from UToronto bschool
Stuff from AP for the webby stuff
The “anthropology design list” which I should attempt to track down for useful modules of information
AIGA – American Institute (?) of Graphic Artists

Just downloaded a bunch of papers by Andrew Hargadon, UC Davis business professor that Conrad from Jump recommended I read. The last paper, titled “Action and Possibility: Reconciling Dual Perspectives of Knowledge in Organizations,” looks the most promising. The abstract:

At times knowledge can be seen as the source of organizational innovation and change—at other times, however, it can be the very constraint on that change. This conflicted role offers insights into why the phenomenon of organizational knowledge has been interpreted by researchers in multiple and possibly conflicting ways. Some theories depict knowledge as an empirical phenomenon, residing in action and becoming “organizational” in the acquisition, diffusion, and replication of those actions throughout the organization. Others consider it a latent phenomenon, residing in the possibility for constructing novel organizational actions. This paper argues that while each of these qualities—empirical and latent—are intrinsic to knowledge in organizations, our understanding of organizational phenomena is essentially incomplete until the relationship between them is considered. Building on structuration theory, we propose a complementary perspective that views organizational knowledge as the product of an ongoing and recursive interaction between empirical and latent knowledge, between knowledge as action and knowledge as possibility. We ground this complementary model of knowledge in evidence from the field study of two firms whose innovation practices provide unique insights into how knowledge simultaneously enables and constrains behavior in organizations. We then discuss how a complementary perspective avoids the reification of knowledge by depicting it instead as an ongoing and social process and offers an alternative distinction between individual and collective knowledge.

To do’s:
Schedule time with Anno
Read papers
Download Eric’s suggested papers