Are you delivering real medicine or just placebos to your business?

Daniel Senter

"A placebo (pl?-see-boh; Latin placebo) is a simulated or otherwise medically ineffectual treatment for a disease or other medical condition intended to deceive the recipient. Sometimes patients given a placebo treatment will have a perceived or actual improvement in a medical condition, a phenomenon commonly called the placebo effect."

The placebo effect has been proven to demonstrate both physical and physiological positive effects in medicine. But could there be a placebo effect in the world of business performance management? If so, we’d expect to see marked improvements in business performance beyond what would normally be expected from a given business "medicine".

Can you tell which one is the placebo?

I think there are two common business placebos to which we often turn when we’re looking for improvements in our performance. One I would term a performance reporting placebo and the other I’d call a technological placebo.

The first – performance reporting placebo – looks like this: a business comes up with new forecasts, revised targets, new key performance indicators (KPIs) definitions, new types of data analytics, and the list goes on.

It’s exciting times as it feels like we’re viewing our organization in a whole new way. People rally around comforting one another with the latest performance update or report.

But often, it’s the same data we were always looking at, just represented in a different way. We might feel like we’re improving – and indeed the resulting boost to motivation may lead to short term gains in performance – but have we improved the results or just the way in which the results are displayed…or manipulated? Is this real medicine or a placebo?

Dashboards, Mobile BI and Big Data

Another placebo that is common in the world of business improvement is one that I would term a technological placebo. We can pin our hopes to the latest buzz word or technology because it has the beautiful shine of something unvarnished by real world implementation.

Don’t get me wrong, I am 110% behind striving to advance the use of emerging technologies to drive improvements in the way we utilise the data around us. However, I am also aware of that people can believe in the latest buzz word or technology more than the technology might merit.

When a new technology is perceived as cutting edge people can feel like real improvements are taking place. That may be somewhat true – when applied correctly technology should improve performance. Equally, as with revised performance reports, there might be a productivity uplift as people get excited about what they’re doing because it is perceived as new. But what happens when the technology inevitably fails to live up to over-hyped expectations?

I must be clear at this point, that I am not against advances that help people and businesses improve. Placebo or not, the initiatives and endeavors mentioned above do appear to have a positive effect on performance, which surely is a good thing!

However, the trouble is that the placebo effect will only be short lived. After a few months the trends will start to show where performance is really heading. It’s at this stage that people can become disillusioned. Will the new performance reporting and technology will be revealed as either the equivalent of shuffling the deck chairs on the Titanic or having delivered true results?

Maximising the value

So let's assume we are dealing with an element of one of these placebos, how can they be used to maximise the effectiveness of a BI programme? I believe this lies in there being a balance between placebo and true performance improvement tools and frameworks. The placebo can be used as the catalyst to ignite the change or improvement endeavour.

This way an effective solution can be blended in to then support and visualise the improvements needed. In many cases the changes needed to deliver business improvement lie within the people that work in our organisations. This is where the human element of change and culture come in to play. If we can provide a placebo that nurtures this and/or creates a sense of improvement, this can be used to focus the energy and create momentum for true business improvement.

So the key to maximise value is to embrace placebos and look for more ways to harness and leverage benefits to help drive your improvement initiatives!!