The characteristics of Dumb Organizations | How to improve?

A frustrating profile of dumb organizations

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Passionned Group is a leading analyst and consultancy firm specialized in Business Analytics and Business Intelligence. Our passionate advisors assist many organizations in selecting the best Business Analytics Software and applications. Every two years we organize the election of the smartest company.

Break through ignorance

This article looks at dumb organizations, what characterizes them, and how their business intelligence can be improved. A breakthrough is needed, but first let’s have a look at a brief profile of the smartest organizations in the Netherlands.

Profile of very smart organizations

How do the smartest organizations behave? Organizations in our study (266 organizations) that managed to achieve excellent results thanks to business intelligence – the brainiacs – know that they must use information consistently for analysis and action.

They also regularly evaluate the standards and targets and adjust these as necessary. Employees discuss positive and negative performance with each other. They align management information with target groups and organizational roles, so that users can instantly access, analyze, and discuss the information relevant to them.

Information is seen as a strategic asset

The top management of the brainiacs provides focused guidance for the business intelligence process. They purposefully use information for innovation: information is seen as a strategic asset. The management successfully encourages thoughtful innovation: the brainiacs regularly bring new and successful products and services to the market. Both managers and employees are rewarded for performance.

Organizations to be proud of!

Smart organizations know perfectly well that business intelligence has (had) a positive effect on the improvement of their (financial) performance and the organization’s development. They also obviously ‘measure’ the success of business intelligence. Organizations to be proud of!

Business intelligence software at the smartest organizations

Only 20 of the 266 organizations achieved excellent results with business intelligence and could be regarded as very smart. That is 7.5 percent of the total. The use of business intelligence software in this group totaled 75 percent.

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Outline of the dumbest organizations

A long way from the top 20 stand the dumbest organizations: 49 can be earmarked as such. They have not experienced any (financial) performance improvement through BI or otherwise, in any area.

They blame their problems on the market (“No, the entire market is experiencing the same problems as we do”) while they don’t really properly understand them (“We don’t need environmental information; it’s not really relevant for us”).

The culture lacks ambition

The foolish only focus the information supply on the key primary business functions; the heart of the company. That way, they neglect to care for the other organs including the brain (BI). They don’t monitor the relevance of management information, have mainly standard reports, and only refresh these when asked to do so by users. Individuals and teams that perform well are not rewarded for performance. There is ad hoc attention for innovation; the culture lacks ambition.

They have friendly phone operators but customers are ping-ponged

They don’t use a management model such as a balanced scorecard. They don’t share information with customers and suppliers, probably because they do not have good management information. They find standards and targets too restrictive; they just follow the development trend.

They mainly look at the numbers in order to understand what’s happening, but do little extra with that information. Their business processes are (very) difficult to adjust. They use friendly telephonists for customer service, but, in the meantime, they keep ping-ponging their customers.

A fool with a tool is still a fool

The public sector is slightly over-represented in this group, but it also includes financial institutions, industrial firms, business services, and telephone and utility companies. The use of business intelligence software is 72 percent in this group. Apparently, this fact, as is, does not make
the difference between being successful or not: “A fool with a tool is still a fool.”

Frustrating picture

The emerging picture of fools is staggering. They are reactive, indifferent, negligent, irresponsible, and very ineffective. A similar picture emerges from a study by the UK consumers group into ‘stupid businesses’: they mainly wanted to earn fast money (short-sighted), created too high expectations, broke promises (irresponsible), were unfair, impersonal, robotic (indifferent), and ineffective.

From fool to brainiac

What can we learn from the dumbest organizations: how not to do it? How it ‘must’ be done has already been explained. The question is how the foolish can be turned around. What forces are holding back the unfolding of effective business intelligence? A breakthrough is needed to make the transition from fool to brainiac. Download the complete article: “What dumb organizations can teach us” and test your organization’s intelligence now.

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