The Benefits of Combining Data With Empathy
Knowing how to optimize business processes and technology only takes companies so far. Success in volatile environments requires learning how to apply data compassionately in response to new opportunities and risks.
Just about everyone has encountered automated telephone response systems and experienced the frustration of having to repeat voice commands multiple times before finally asking to speak to a service representative. It seems that many large companies have become so focused on optimizing their business processes and systems that they have become all too willing to forget about cultivating emotional connections with customers. But as global business environments become less predictable, there are serious risks in putting too much emphasis on process and systems. In order to detect and respond to shifting customer needs, companies need to show more, not less, empathy with their customers. Some companies have found an approach that achieves that — one that joins three important capabilities: the ability to optimize business processes and technology, the ability to foster emotional connections and the ability to use data empathically. We call this approach softscaling.
The empathic use of data enables companies to be, in effect, left-brained and right-brained simultaneously. The data provides the bridge that allows the rational (left side) to communicate with the emotional (right side). Consider what it does for Hero MotoCorp, a manufacturer of motorcycles and scooters, based in New Delhi, India, that until 2010 was partly owned by Honda Motor Company. Like other companies, Hero MotoCorp had a customer relationship management (CRM) system designed to track critical activities such as sales, service visits, spare part needs and other aspects of the customer experience. However, as effective as it was at monitoring the basic data, it didn’t show that the broad demographics of the market were shifting dramatically. Young women, who were entering India’s workforce in droves, were uncomfortable, even intimidated, about shopping for motor scooters. Some were concerned about how they would look astride a scooter. In response, the company designed a new product and a new program called “Just 4 Her,” with its own showrooms staffed by women. Female customers can view how they look on the scooter behind the privacy of a curtain. Hero MotoCorp uses technology to scale local decision rights, allowing it to optimize its business processes more effectively.
1. For an interesting discussion of the positive role of emotion in business, see D. Hill, “Emotionomics: Leveraging Emotions for Business Success,“ rev. ed. (London: Kogan Page, 2008).
2. In August 2011, India had 865 million mobile phone subscribers, making it second in the world after China. See Telephone Regulatory Authority of India, “Highlights of Telecom Subscription Data as on 31st August, 2011” (press release), August 16, 2011.
3. See P. Cappelli, H. Singh, J. Singh and M. Useem, “The India Way: How India’s Top Business Leaders Are Revolutionizing Management” (Boston: Harvard Business School Publishing, 2010). Cappelli et al. allude to the importance of holistic engagement with employees as a key leadership practice in Indian companies. Their research suggests that successful companies view people as assets to be invested in, not costs that need to be minimized.
4. See A. Sen, “The Argumentative Indian: Writings on Indian History, Culture and Identity” (New York: Farrar, Straus, and Giroux, 2005) for a compelling account of the Indian love for debate.
5. Many authors have written about business process optimization. For pioneering work, see T.H. Davenport and J.E. Short, “The New Industrial Engineering: Information Technology and Business Process Redesign,” MIT Sloan Management Review 31, no. 4 (summer 1990): 11-25. More recently, these approaches have been applied to knowledge work. For example, see T.H. Davenport, “Process Management for Knowledge Work,” in “Handbook on Business Process Management 1: Introduction, Methods and Information Systems,” ed. J. vom Brocke and M. Rosemann (Heidelberg, Germany: Springer-Verlag Berlin Heidelberg, 2010): 17-35; for a discussion of shortcomings, see K. Vergidis, C.J. Turner and A. Tiwari, “Business Process Perspectives: Theoretical Developments vs. Real-World Practice,” International Journal of Production Economics 114, no. 1 (July 2008): 91-104.
6. Interviews with HDFC chairman and senior executive team, July 2008 and April 2011.
7. Our research has consistently shown how effective use of digital technology helps create business value. See, for example, P. Weill and J. Ross, “IT Savvy: What Top Executives Must Know to Go from Pain to Gain” (Boston: Harvard Business School Press, 2009); and P. Weill and S. Aral, “Generating Premium Returns on Your IT Investment,” MIT Sloan Management Review 47, no. 2 (winter 2006): 39-48.
8. Gartner Executive Programs, “2009 CIO Survey” (Stamford, Connecticut: Gartner, 2010).
9. Many U.S. companies are actively seeking to become more proficient at using the data captured in their information systems. A 2011 survey argues persuasively that organizations and managers need to develop better skills at exploiting their data resources; see McKinsey Global Institute, “Big Data: The Next Frontier for Innovation, Competition, and Productivity,” May 2011.
10. L. Coleman-Lochner, “Wal-Mart, Retailers Stumble Overseas as U.S. Formulas Falter,” Bloomberg, August 1, 2006, www.bloomberg.com.