Companies & Industries

Analyze This: Tech Companies Don't Use Their Own Products


Analyze This: Tech Companies Don't Use Their Own Products

Photograph by Tim Hetherington

The IT industry has created a variety of products and services that make possible better decision-making by the customers that employ them. There is only one problem: By and large, the industry doesn’t “eat its own dog food”—the term that applies when an IT vendor doesn’t use its own products.

Historically, this esoteric corner of the industry hasn’t powered a lot of revenue. But as the software improves, decision tools are becoming a formidable category of IT spending—it was the No. 1 priority in Gartner’s annual CIO survey.

This sector includes an impressive array of capabilities that are being adopted at many companies today:

• Business intelligence, analytics, and “big data” management
• Analyzing “the wisdom of the crowd,” including tools for collaboration, prediction markets, and social media sentiment analysis
• Tools to manage the decision processes including business process management and case management
• Search and knowledge management

Unfortunately, it’s rare to find an IT organization that makes extensive use of decision-making tools. Instead, we hear much more about the “Great Man” (or occasionally Great Woman) who makes important decisions in an all-powerful, all-knowing fashion.

Take Larry Ellison, founder and chief executive officer of Oracle (ORCL), which sells a variety of decision-making tools. Oracle doesn’t need them—it has Larry, who, if descriptions of his management style are accurate, makes all the decisions from advertising to product development.

Apple’s (AAPL) Steve Jobs, of course, was notorious for making “Great Man” decisions, and for purposely ignoring customer comments about what they needed in products. In his later years, Jobs became more open to persuasion by other executives, but no one would ever have mistaken him for an aggressive user of decision technologies.

Hewlett-Packard (HPQ) appears to have gone backward in the area of valuing employee participation in decisions. Current CEO Meg Whitman, and her predecessor Mark Hurd, have been hailed as potential saviors through their prescience and decisive actions. Contrast this to an earlier era when the company was known for its egalitarian, decentralized culture—”The HP Way.”

Even the younger generation doesn’t seem to be taking much advantage of contemporary offerings. When decision-making at Facebook is discussed, one hears about Mark Zuckerberg and perhaps COO Sheryl Sandberg—not about any use of Facebook, or any other social or analytical technology to help with the decision process. Facebook does have a “Data Team,” but they don’t appear to be highly influential in major decisions or product innovations.

Contrast the CEO idolatry of these firms with the few exceptions that have embraced new decision technology. LinkedIn (LNKD) co-founder Reid Hoffman is an advocate of data and analytics. Data science teams there have been involved in the creation of a number of new offerings, including People You May Know (which has, we think, a much better algorithm than Facebook’s, and came before it), Talent Match, and Groups You Might Like, to name a few.

Google (GOOG) is another strong exception. The company is analytical to its core. It was founded on the basis of a page rank algorithm, and makes its money primarily from advertising algorithms. In every major decision process for which data exists, it is used. Google is also one of the world’s biggest users of prediction markets, suggesting that it cares about the wisdom of its employee crowd.

EMC (EMC) is an IT vendor that used to be strongly hierarchical, but is quickly embracing new decision technologies. Employees can participate in key decisions through a social media platform called EMC One, which was used to gather suggestions for cost cutting in the 2008 recession. The company has established a data science team to work on internal projects (including helping to decide which innovation projects to move forward) and now has a course and certification program for employees and customers on “Data Science and Big Data Analytics.”

These exceptions suggest that IT companies can eat their own decision dog food—or, as some call it, “drink their own champagne.” If IT companies really want to sell capabilities for making better decisions, they need to set a good example. The vendors that can point with pride to their own good IT-enabled decisions will grow and prosper not only because of their good decisions, but because their customers will want to emulate them.

Thomas-davenport
Thomas H. Davenport is the President’s Distinguished Professor of IT & Management at Babson College and a co-author with Brook Manville of Judgment Calls: 12 Stories of Big Decisions and the Teams That Got Them Right (Harvard Business Review Press, 2012).

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    (Oracle Corp)
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