Don't Just Analyze Historical Data; Listen to the Front Lines Today

Source: PxFuel

Carsten Lund Pedersen has written a terrific article this month for MIT Sloan Management Review. The article is titled "Gain Competitive Advantage by Transcending the Front-Line Paradox."   Pedersen argues that too much reliance on historical data, and too little emphasis on what front-line employees are seeing and hearing, can be trouble for organizations.  He writes, "Leaders who turn to front-line workers for their input and predictions when making strategic decisions have an edge over those who rely on their own analysis of historical data that may not reflect the current reality."  

Pedersen recalls the wisdom of Andy Grove, former CEO of Intel, who once argued that people at the "periphery" of the organization often sense competitive threats long before they come to attention of senior leaders. Years ago, I quoted Grove on this very topic when writing about how leaders can uncover hidden risks and become better problem finders. The quote comes from Grove's excellent book, Only the Paranoid Survive.  Here's the Grove quote that I shared at that time:

“Think of it this way: when spring comes, snow melts first at the periphery, because that’s where it’s most exposed… In the ordinary course of business, I talk with the general manager, with the sales manager, with the manufacturing manager. I learn from them what goes on in the business. But they will give me a perspective from a position that is not terribly far from my own. When I absorb news and information coming from people are who are geographically distant or who are several levels below me in the organization, I will triangulate on business issues with their view, which comes from a completely different perspective. This will bring insights that I I would not likely get from my ordinary contacts.”   

Pedersen's article is definitely worth reading.  My favorite paragraph focuses on the need for leaders to exit their "echo chambers" in order to make better decisions:

Front-line employees, then, can offer a true treasure trove of insights to be used in strategic decision-making. Yet, top management teams rarely ask these employees about impending strategic issues they anticipate at the organizational front lines, or for their opinions on how a new product might fare. Many executives therefore deprive themselves of new information that could improve their analyses — and they risk making decisions in isolation within the C-suite echo chamber.