The Decline of the HPPO (Highest Paid Person’s Opinion)

The next wave of Enterprise 2.0, says MIT Sloan’s Andrew McAfee, will center around the concept of harvesting expertise, solutions and knowledge — not just from within the organization, but from anywhere that expertise can be identified and gathered.

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Image courtesy of Flickr user TalentEgg.

Many established companies still practice “decision making by HPPO” (Highest Paid Person’s Opinion), according to Andrew McAfee of the MIT Center for Digital Business. But McAfee says that the next wave of Enterprise 2.0, a term he coined, will see companies managing decision making and knowledge in decidedly new ways.

During a recent interview, McAfee spoke with MIT Sloan Management Review editorial director Martha E. Mangelsdorf. He was asked about the changing thinking around Enterprise 2.0, six years after he first started writing about it:

“The central change with Enterprise 2.0 and ideas of managing knowledge [is] not managing knowledge anymore — get out of the way, let people do what they want to do, and harvest the stuff that emerges from it because good stuff will emerge. So, it’s been a fairly deep shift in thinking about how to capture and organize and manage knowledge in an organization.”

The idea that the best minds and the best solutions are often outside our organizations is central to this new mindset, McAfee says. Companies must be willing to seek out those experts wherever they may be:

“Allstate took some of its data, made it available for one of these data science competitions, and said, ‘Hey, can you beat our current best prediction for which of these cars is going to get into an accident somewhere down the road?’ Sure enough, the data scientist could beat the baseline prediction by a lot.

“. . . What I’m learning over and over from data science competitions and Wikipedia and Enterprise 2.0 is the power of [saying]. . . We’re going to watch where the expertise, the good answer, the creativity, the tenacity, we’re going to watch where the manifest themselves and we’re going to go harvest that out there. . .

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Comments (9)
Critical Thinking in Organisations – Martin Chesbrough's Blog
[…] https://sloanreview.mit.edu/article/the-decline-of-the-hppo-highest-paid-persons-opinion/) but it remains a dominant mode of thinking within organisations. Given the imprecise nature of decision-making within organisations (usually a choice between multiple options with no clear data to support any one option) then one of the toughest jobs for any team is to even be able to “spot the HIPPO” in the first place! […]
Mashing “Best Practices” | Context Driven Performance Testing
[…] there is no debate. A consensus builds (or the HiPPO makes the call), and perceived risk is reduced; whether that is project or political risk is rarely […]
jheuristic
Hi - This is old hat. Innovative companies have been doing this for years and years. They use well-established techniques like prediction markets and collective intelligence. Meanwhile, subsidiarity and distributed phronesis have been the foundation of innovative knowledge management (KM) for decades. Thing is, it's uneven. Sadly, HPPO is still pervasive. Maybe this helps with the real barrier to greater innovation and productivity: culture. -j
The learning organization: an often-described, but seldom-observed phenomenon | Harold Jarche
[...] 4) When we remove artificial boundaries, we enable innovation. “The central change with Enterprise 2.0 and ideas of managing knowledge [is] not managing knowledge anymore — get out of the way, let people do what they want to do, and harvest the stuff that emerges from it because good stuff will emerge. So, it’s been a fairly deep shift in thinking about how to capture and organize and manage knowledge in an organization.” ~ Andy McAfee [...]
Investing well in IT with emphasis on KPIs separates business leaders from laggards, survey results show | Outsource Portfolio
[...] a data-driven and analysis-driven decision process. Perhaps the older way might be summed up by the highest paid person’s opinion (HPPO) being the way that ultimately decisions were [...]
When we remove artificial boundaries | Harold Jarche
[...] When we remove artificial boundaries  Posted on Saturday, 12 May 2012  by  Harold Jarche    “The central change with Enterprise 2.0 and ideas of managing knowledge [is] not managing knowledge anymore — get out of the way, let people do what they want to do, and harvest the stuff that emerges from it because good stuff will emerge. So, it’s been a fairly deep shift in thinking about how to capture and organize and manage knowledge in an organization.” ~ Andy McAfee [...]
Why ad agencies should embrace A/B testing, too | Creativity_Unbound
[...] read the Wired piece. Consider not only the dramatic improvements that A/B testing can yield – as well as the frequency with which the HiPPO’s are wrong – and you certainly [...]
Deb Gallagher
Startups are off and running with this concept, helping managers and companies find the expertise they're looking for, wherever it may be.

http://techcrunch.com/2012/04/19/new-crowdsourcing-launch-askyourusers-com-uses-linkedin-to-help-you-find-people-for-microconsulting-projects/
dalesroberts
I couldn't agree more. Interestingly the origin of the hierarchy in 19th century England was in replacing the unfair process of patronage, a system which saw important roles given to those favoured by the influential. It was intended to be meritocratic. It was though, just a step in the evolution of the organisation. Social organisations will take input into organisational decisions from many places helped by automated social tools. I have just completed authoring a chapter in an upcoming book, Decision Sourcing, on this very subject. More here on the Decision Hacker blog http://decisionhacker.com.