Gain Competitive Advantage by Transcending the Front-Line Paradox

Front-line employees are often the first to sense change yet the last to be heard. But it doesn’t have to be that way.

Carsten Lund Pedersen Reading Time: 6 min 

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In a fast-moving world, organizations can sustain a competitive edge by developing actionable knowledge from streams of unstructured data. Front-line employees are among the first to observe emerging problems on the horizon, because they’re positioned at the point of contact between an organization and its customers and thus uniquely aware of the early symptoms of impending change.1 To paraphrase Stanford professor Robert Burgelman and Andy Grove, the late CEO of Intel, front-line employees can feel the winds of change because they spend time outdoors where the stormy clouds of disruption rage.2

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.

The Front-Line Paradox

The situation described above is something I refer to as the front-line paradox: Front-line employees are often the first to sense impending change but the last to be heard within an organization. Consequently, many organizations are unaware of the knowledge they already have access to. And each day, organizations are missing out on opportunities or experiencing unnecessary crises because of this paradox.

This paradox is best illustrated by the reality television show Undercover Boss. In each episode, an executive goes undercover as a front-line employee in their own organization. Typically, the executive discovers important problems and is amazed by how much they didn’t know about their own company.

But these undercover bosses aren’t alone in their ignorance of front-line insights. A simple thought experiment can illustrate just how much insight is lost at the front lines every day. Consider a call center with 500 employees, each of whom gets an average of 160 incoming calls per week (640 calls per month), with the average call lasting 380 seconds. This would mean that all 500 employees receive 320,000 customer calls per month, or approximately 33,778 hours of conversation! Typically, decision makers don’t tap into this rich repository of knowledge, which goes to waste on a daily basis.

The remedy is to listen to the front line.

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About the Author

Carsten Lund Pedersen is an assistant professor in the Department of Marketing at Copenhagen Business School in Denmark, where he researches B2B digitization strategies, employee autonomy, and market strategies in times of change.

References

1. C.L. Pedersen, “Using the Collective Wisdom of Frontline Employees in Strategic Issue Management” (Ph.D. thesis, Copenhagen Business School, 2016).

2. R.A. Burgelman and A.S. Grove, “Strategic Dissonance,” California Management Review 38, no. 2 (January 1996): 8-28.

3. J. Surowiecki, “The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies, and Nations” (New York: Anchor Books, 2004).

4. The typology of descriptive, diagnostic, predictive, and prescriptive approaches originates from data science, where it is very popular, as illustrated in publications by IBM such as “Descriptive, Predictive, Prescriptive: Transforming Asset and Facilities Management With Analytics,” PDF file (Somers, New York: IBM, 2013).

5. For relevant studies on using the front line to make performance forecasts, see Pedersen, “Using the Collective Wisdom”; C.A. Hallin, T.J. Andersen, and S. Tveterås, “Harnessing the Frontline Employee Sensing of Capabilities for Decision Support,” Decision Support Systems 97 (May 2017): 104-112; and T.J. Andersen and C.A. Hallin, “Global Strategic Responsiveness: Exploiting Frontline Information in the Adaptive Multinational Enterprise” (New York: Routledge, 2017).

6. D.N. Thompson, “Oracles: How Prediction Markets Turn Employees Into Visionaries” (Boston: Harvard Business Review Press, 2012).

7. D. Hernandez, “How Our Company Learned to Make Better Predictions About Everything,” Harvard Business Review, May 15, 2017, https://hbr.org.

8. E. Brynjolfsson and A. McAfee, “The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies” (New York: W.W. Norton, 2014).

9. J. Lavoie, “The Innovation Engine at Rite-Solutions: Lessons From the CEO,” The Journal of Prediction Markets 3, no. 1 (2009): 1-11.

10. Ibid.

11. D. Whitcomb, H. Battaly, J. Baehr, et al., “Intellectual Humility: Owning Our Limitations,” Philosophy and Phenomenological Research 94, no. 3 (May 2017): 509-539.

12. See, for example, B. Benjamin and E. Sopadjieva, “Engage Your Front Line to Increase Your Bottom Line,” Forbes, Oct. 9, 2017, www.forbes.com.

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Comments (2)
Stuart Roehrl
Read with interest - I agree.  The employees who have direct contact with customers can get so much understanding of where the company is succeeding or failing, where the business is vulnerable to competition and disruptive factors.
Stuart Roger
Saradhi Motamarri
Nice article and portrayal of the FLE Paradox. Thanks to the authors.

Incidentally, the core theme of my PhD Thesis is the same (recently approved by the University of Wollongong, Australia), titled: "Frontline Employee Empowerment: Dimensions and their Impact on Dynamic Capabilities and Firm Performance in the Services Sector".

Some insights have been shared in the following publications:

Motamarri, S, Akter, S & Yanamandram, V 2020, ‘Frontline employee empowerment: Scale development and validation using Confirmatory Composite Analysis’, International Journal of Information Management, vol. 54, p. 102177. [A*]
Akter, S, Motamarri, S, Hani, U, Shams, R, Fernando, M, Mohiuddin Babu, M & Ning Shen, K 2020, ‘Building dynamic service analytics capabilities for the digital marketplace’, Journal of Business Research, vol. 118, pp. 177-88. [A]
Motamarri et al. (under review), ‘Frontline Empowerment, Dynamic Capabilities and Firm Performance in Data-Driven Services Marketing’.
Motamarri S, et al. (2017), ‘Does Big Data Analytics Influence Frontline Employees in Services Marketing?’ Business Process Management Journal, Special issue on Big Data, (13:3).

Motamarri et al. (2020), ‘Big Data Analytics in Frontline Service Delivery’, ICTO2020, Paris.
Akter S, Motamarri S et al., (2018). “Dynamic Service Analytics Capabilities for Service Systems in the Global Big Data Economy – a Systematic Review and Agenda for Future Research.” Data, Organisation and Society Conference, 21-Nov-2019, British Academy of Management, Coventry University, UK.
Motamarri, S, Akter S. and Yanamandram, V. Wamba F Samuel., 2017. “Why Empowerment is Important in Big Data Analytics.” CENTERIS 2017, Barcelona, Spain.
Motamarri, S, Akter S. and Yanamandram, V., 2017. “Does Frontline Employees’ Empowerment Make A Difference In Data-Driven Services?” Frontiers in Service 2017, Fordham University, New York.