Book Excerpt: The Numerati by Stephen Baker

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Takriti headed the IBM team Aleksandra Mojsilovic

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It was wonderful for manufacturing. But now, as IBM has shifted its focus to services, the corporate supply chain is made up less of machine parts than of people—Takriti and some 300,000 of his colleagues. His job, quite simply, is to start optimizing his co-workers.

To put together these profiles, Takriti requires mountains of facts about each employee. He has unleashed some 40 PhDs, from data miners and statisticians to anthropologists, to comb through workers' data. Personnel files, which include annual evaluations, are off-limits at IBM. But practically every other bit of data is fair game. Sifting through résumés and project records, the team can assemble a profile of each worker's skills and experience. Online calendars show how employees use their time and who they meet with. By tracking the use of cell phones and handheld computers, Takriti's researchers may be able to map the workers' movements. Call records and e-mails define the social networks of each consultant. Whom do they copy on their e-mails? Do they send blind copies to certain people?

These hidden messages could point to the growth of informal networks within the company. They may show that a midlevel manager is quietly leading an important group of colleagues—and that his boss is out of the loop. Eventually, say experts, e-mail analysis may single out workers whose behavior places them outside the known networks. Are these outliers depressed, about to jump ship, consorting with the competition? In companies around the world, the Numerati will be hunting for statistical clues.

Even without reading all the e-mails, managers can automatically spot the most common words that circulate within each group of workers. This permits them to establish the nature of each relationship. They can also see how communications shift with time. Two workers may discuss software programming Tuesday through Friday but spend much of their time on Monday sending e-mails about the past weekend's football games. "The next big step," says Kathleen M. Carley, a lead researcher in social networks at Carnegie Mellon University, "is to take tools like this and tie them to scheduling and productivity programs."

Takriti's scheme is even more ambitious. He is not given to bold forecasts. But if his system is successful, here's how it will work: Picture an IBM manager who gets an assignment to send a team of five to set up a call center in Manila. She sits down at the computer and fills out a form. It's almost like booking a vacation online. She puts in the dates and clicks on menus to describe the job and the skills needed. Perhaps she stipulates the ideal budget range. The results come back, recommending a particular team. All the skills are represented. Maybe three of the five people have a history of working together smoothly. They all have passports and live near airports with direct flights to Manila. One of them even speaks Tagalog.

Everything looks fine, except for one line that's highlighted in red. The budget. It's $40,000 over! The manager sees that the computer architect on the team is a veritable luminary, a guy who gets written up in the trade press. Sure, he's a 98.7% fit for the job, but he costs $1,000 an hour. It's as if she shopped for a weekend getaway in Paris and wound up with a penthouse suite at the Ritz.

DO THE MATH

Hmmm. The manager asks the system for a cheaper architect. New options come back. One is a new 29-year-old consultant based in India who costs only $85 per hour. That would certainly patch the hole in the budget. Unfortunately, he's only a 69% fit for the job. Still, he can handle it, according to the computer, if he gets two weeks of training. Can the job be delayed?

This is management in a world run by Numerati. As IBM sees it, the company has little choice. The workforce is too big, the world too vast and complicated for managers to get a grip on their workers the old-fashioned way—by talking to people who know people who know people. Word of mouth is too foggy and slow for the global economy. Personal connections are too constricted.